What is Self-Directed Investing?
February 22, 2010
The Employment Retirement Income Security Act (ERISA) enacted in 1974, passed the responsibility of retirement savings from the employer to the employee. In 1975 Individual Retirement Accounts (IRA) were created, providing individuals with expanded opportunities to take control of their investments. An IRA is a personal savings account that allows you to contribute annually for your retirement with a tax-free Roth IRA and/or tax deferred Traditional IRA savings plans.
ERISA also allows the following types of retirement.
- SEP IRAs
- Defined Benefit Plans
- Profit Sharing Plans
- Coverdell Education Savings Accounts (ESA)
- Health Savings Accounts (HSA)
Now, more than ever, investors are taking advantage of the self-directed model as they watch their traditional investment portfolios dwindle.
When you self-direct you take control of your portfolio and you choose the investments that best fit your personal needs. Although, industry professionals can still assist you in making appropriate choices, you expand your options from the traditional investment typically offered by investment bankers and brokers, to non-traditional and alternative investments when you self-direct.