Saving for retirement is something that many people are actively participating in. Some people are quite aggressive, especially those people who are just starting to save and are later along in life. However, there are young people that are being proactive about retirement savings, and these people have the ability to be a bit more reserved and take the slow and steady approach.

In any situation, there are many ways in which a person can save for their retirement, and one particular investment that is all the rage today is a self-directed IRA. These IRAs vary somewhat from the traditional type of individual retirement account. There are certain things that will be required from self-directed IRAs, that aren’t required with traditional IRAs. One of those is a self directed ira custodian.

The first thing to remember is that all self-directed IRAs will be required, by law, to be managed by a custodian. This custodian is the person that receives the initial funds that are used open up the self-directed IRA account, and they also receive any contributions the owner of the IRA makes throughout the life of the account.

In addition, the custodian is the one that facilitates the purchasing of each investment the owner wishes through the self-directed IRA. These types of IRAs allow owners to invest in real estate, precious metals, currency, certificates and debt, just to mention a few. However, pursuant to IRS laws, the owner of the account isn’t permitted to make these purchases, this responsibility falls to the custodian.

Some people get self directed ira custodians and self-directed IRA administrators confused. This is an easy thing to do, but the roles of an administrator and a custodian are quite different.

Administrators act more as a go between. An administrator will accept contributions from the IRA owner and pass those contributions onto the custodian. The administrator will also handle any reporting or documentation required by law to be given to the owner of the account, as well as to any tax reporting agencies. Having an administrator for the account may increase the fees for self-directed IRAs, but it can be extremely helpful when making sure that the account is in full and complete compliance with all regulatory requirements.

In the past, traditional IRAs have offered respectable returns on investment, as well as offering investors a tax haven for contributions and returns on investment. The downside was that the holder of a traditional IRA account didn’t get a great deal of input on the investments themselves. For people who want more freedom, but still want to enjoy the tax free benefits of IRAs, it’s no mystery that a self directed ira account is the account of choice for people looking to save for retirement. Even with legal restrictions that require a self managed ira, self-directed IRAs still give people the investment freedom to choose the way in which they invest their money.