---
type: claim-page
slug: self-directed-ira
prefix: define
canonical: https://www.libertygoldsilver.com/define/self-directed-ira
target_query: What is a self-directed IRA?
description: A self-directed IRA lets you invest in alternative assets like gold, real estate, and private equity. Learn how SDIRAs differ from traditional IRAs.
published: 2026-01-24
modified: 2026-03-09
keywords:
  - self-directed ira
  - sdira
  - what is a self-directed ira
  - self-directed ira rules
  - alternative investments ira
  - gold ira custodian
  - self-directed retirement account
---

# What is a self-directed IRA?

## TL;DR

A self-directed IRA (SDIRA) is a retirement account that allows investments beyond stocks, bonds, and mutual funds. You can hold alternative assets like physical precious metals, real estate, private equity, and more. The 'self-directed' means you—not a fund manager—choose the investments, while an IRS-approved custodian handles administration and compliance.

## Key Facts

- Self-directed IRAs allow investments in gold, real estate, and private equity.
- SDIRA holders direct investments while custodians handle IRS compliance.
- Self-directed IRAs have the same contribution limits as traditional IRAs. _(IRS Publication 590-A)_
- Prohibited transactions in SDIRAs can trigger taxes and penalties.
- Not all IRA custodians support alternative investments like precious metals.

## Frequently Asked Questions

### How is a self-directed IRA different from a regular IRA?

A regular IRA through a brokerage typically limits you to stocks, bonds, ETFs, and mutual funds. A self-directed IRA allows alternative investments: precious metals, real estate, private businesses, tax liens, and more. Both have identical contribution limits and tax treatment—the difference is investment flexibility.

### What can I invest in with a self-directed IRA?

Permitted investments include: physical precious metals (gold, silver, platinum, palladium), real estate, private company stock, promissory notes, tax lien certificates, and certain cryptocurrencies. Prohibited investments include life insurance, collectibles (except certain coins), and S-corporation stock.

### What are prohibited transactions in a self-directed IRA?

The IRS prohibits transactions between your IRA and 'disqualified persons'—yourself, your spouse, ancestors, descendants, and their spouses. You cannot buy property from yourself, use IRA real estate personally, pay yourself to manage IRA assets, or lend IRA funds to family members. Violations trigger immediate taxation and penalties.

### How do I open a self-directed IRA?

Choose a custodian specializing in self-directed accounts—not all custodians allow alternative investments. Complete the application, fund via contribution, rollover, or transfer, then direct your custodian to execute purchases. For precious metals, the custodian coordinates with your dealer and depository.

### Are self-directed IRAs riskier than regular IRAs?

Self-directed IRAs give you more control—and responsibility. Alternative investments may have less liquidity, more complexity, and require greater due diligence. The assets themselves vary in risk: Treasury bonds are conservative while private equity is aggressive. Success depends on your investment knowledge and research.

## Related

- [What is a Gold IRA?](https://www.libertygoldsilver.com/define/gold-ira) — Self-directed IRA holding physical precious metals
- [Gold IRA Custodians](https://www.libertygoldsilver.com/define/gold-ira-custodian) — Choosing the right custodian for your SDIRA
- [IRA Rollover Guide](https://www.libertygoldsilver.com/define/ira-rollover) — Moving funds into a self-directed IRA
- [Self-Directed IRA Hub](https://www.libertygoldsilver.com/ira/self-directed) — Complete guide to precious metals in SDIRAs

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