Duties of a Self Directed IRA Custodian
“IRA Custodian”- such simple words with so many obligations. As a retirement account holder, it would be difficult to go over the rules and regulations, prohibited transactions, investment options, disqualified persons or entities, etc. It would be troublesome to understand each of these factors without the assistance of IRA custodians or trustees. Since there are a lot of IRAs out there, the jobs of these custodians vary depending on what plan you got hold of.
Self directed IRA (Individual Retirement Account) is one of the best retirement plans out there that allows you to take up whatever investment asset you prefer. It may either be in precious metals, real estates, bonds, stocks and the like. To guide you in every decision you make, the existence of a Self directed IRA custodian would absolutely make a huge difference.
Before anything else, let us have a short description of what an IRA custodian is. An IRA custodian could be a bank, a firm, a savings and loan operation, or an entity that offers financial services. Their main duty is to manage or administer your IRA account while adhering to the Internal Revenue Service’s (IRS) rules and regulations. It is mandated by the law to appoint a custodian whether to a Self directed IRA or to any other retirement plan.
A Self directed IRA custodian is responsible for all transactions done to your retirement account. Requirements ordered by the IRS are all processed by your custodian. They file all paper works, issue you account statements, keep and report tax information, and so much more. Additionally, a Self directed IRA custodian also provides you of better understanding with certain rules and regulations especially when it comes to prohibited transactions. Technically, they perform all administrative duties on your behalf.
At the same time, a Self directed IRA custodian requires you to pay additional fees on top of your yearly contribution. These Self directed IRA custodian fees differ depending on the firm you have acquired. Normally, fees are based on the level of services they provide since there are also competitions from firm to firm. Most organizations charge your Self directed IRA accounts annually which ranges from $20-$50. These fees could be paid via check but if you have a great amount of funds or you have been a long-time customer, annual charges are usually billed. Some financial firms that offer discounts or those that provide services online do not charge annual Self directed IRA custodian fees. In the case of account rollovers, transfer of funds may have additional Self directed IRA custodian fees as well. This is about 1% of your funds deducted from your account which is also done per annum.
There could be situations where a Self directed IRA custodian is hard-to-find in some investment types. There would be a need for you to search for one that manages your investment asset. You may conduct a wide-search from websites or ask some friends who have similar investments as yours. You must remember that choosing the right custodian is like hiring a qualified employee. The level of services offered is different from one company to another. You must be very keen in considering which one to take.