Quick answer
A self-directed IRA is an individual retirement account administered by a custodian that permits a broader selection of investments than many conventional brokerage IRAs. The account remains subject to IRA tax rules. “Self-directed” does not mean the investor can ignore custody, prohibited-transaction or distribution requirements.
What matters in practice
A self-directed IRA can hold certain alternative assets if its custodian permits them. Availability varies by provider, and some assets create valuation, liquidity and custody complications.
Questions to ask before proceeding
Ask prospective custodians which assets are supported, who holds legal custody, what each transaction costs, how valuations are obtained and how prohibited transactions are prevented.
Risks and limitations
Self-directed IRAs are not automatically better or more diversified. Alternative investments may be illiquid, difficult to value or exposed to fraud. The custodian’s administrative role is not an endorsement of an investment.
Next steps
Use the retirement scenario calculator to explore illustrative outcomes, read the IRA custodian checklist, and compare provider costs before requesting information from any provider.
Editorial note
This is general education, not individualized tax, legal or investment advice. Verify current rules with the IRS and consult qualified professionals where appropriate. Financial claims and links require review before publication.