When most of us think of
But that's not all you can keep in your .
If you want to boost your returns over time, sheltering some potentially exciting from , you need to really diversify your .
For those with the interest and the risk tolerance, here are four you can hold in an .
Consider adding precious metals to your retirement plan, with the help of certain gold and silver coins.
You can keep one-ounce, half-ounce, quarter-ounce, and one-tenth-ounce gold coins minted by the U.S. Treasury in your IRA. It's also possible to keep one-ounce silver coins minted by the Treasury. These gold and silver coins are known as "Eagles."
It's also possible to hold bullion in your IRA, as well as certain coins from other countries, including Canadian Gold Maple Leafs, Australian Nuggets and Austrian Philharmonikers.
But you have to pay for its storage, and many custodians won't arrange storage for you. Additionally, if you have a traditional IRA, figuring the minimum distribution can be quite the process, since the value of your precious metals have to be evaluated.
You can also add real estate to your IRA. There are some restrictions:
- Your immediate family members can't be involved. This means you can't buy property for your IRA from an immediate family member, nor can you rent out the property to an immediate family member.
- If you have rental property in the IRA, you can't stay in the property even one night.
- Someone other than you needs to manage the rental property.
- You can't lend money to the IRA to cover costs associated with your property.
- If you hold real estate in your IRA, you can't take depreciation deductions on it.
Also, you won't receive the long-term capital gains rate when you withdraw money from a traditional IRA. Instead, you are taxed at your regular income rate when you withdraw the money.
Another way to add real estate to your IRA is through a real estate trust, or REIT.
3. Private Loans
You can use your IRA to invest in private loans. P2P (peer-to-peer) lending sites such as Lending Club sometimes IRA options.
You can also hold private mortgages in your IRA. Basically, you lend the money from your IRA to a private party. In many cases, the custodian arranges to match you with an appropriate borrower.
Understand, though, that you don't share the profits if the property appreciates in value. You only receive the interest you earn from the loan. However, many mortgages offer the potential for better returns than you might get with a CD. But you have greater risk, since the borrower could default.
Wish you could invest in a business, but you don't have the ready cash? You can use money from your IRA to invest in a business and then "hold" the business in your account.
There are restrictions: You can't benefit from the business prior to retirement. So you can't work to grow the business or manage it. Close relatives aren't able to use your IRA money for the business transactions, either. You have to remain a passive investor.
The Answer: IRAs are very flexible in terms of the investments you can keep in them; most limits come from custodians. Many traditional custodians (banks, online brokerages) won't help you set up an IRA with these "exotic" investments. You need to set up a self-directed IRA with the help of a specialty broker in order to take full advantage of these possibilities.