Have you lost your trust in the stock market? Do you often worry that you'll lose your retirement assets before you can even start taking distributions? A self-directed IRA might be a good solution.
Self-directed IRAs are exactly what they sound like. Rather than being managed by a third party, you manage the investments. You get to choose exactly what you invest, what percentage of your account is allocated to different assets, and when to shift your assets around.
There are a lot of companies that sell assets for self-directed IRAs. Many help with setting up and funding your account, which is ideal for those without a financial background. A more streamlined process means you don't have to play phone tag or struggle with confusing paperwork.
Self-directed IRAs must hold IRS-approved assets. The IRS has strict rules regarding the assets you can use. Precious metals must adhere to certain purity standards. There are also rules for real estate and cryptocurrency.
Accuplan is a company that helps investors set up a self-directed IRA. They mostly serve local clientele in their home state of Utah, but have recently expanded to other areas. Are they a decent choice?
Unfortunately, Accuplan's company reviews are universally negative. We'd recommend working with an IRA provider that has a better track record. In addition, the Accuplan website contains a lot of misinformation about self-directed IRAs that seems maliciously intended to confuse people.
But let's take a more in-depth look at their offerings. What services do they provide, and why are those services useful?
About the Company
According to the website, the company is staffed by financial experts who have significant expertise with retirement planning and tax law. They know everything there is to know about self-directed IRAs. In addition, the company offers real estate investments through their IRA services.
The offer of real estate is unusual. Most self-directed IRA providers focus on a single niche, like precious metals or cryptocurrency. Real estate IRAs are complex enough that many precious metals companies don't touch them. If only Accuplan's services had a better reputation, we'd recommend them based on this.
Accuplan also says that they charge lower fees than the competition. But their account fees are actually higher than the more reputable companies we've looked at.
Benefits of Self-Directed IRAs
Accuplan states that they will not offer any investment advice to people opening a new account. Since the account is self-directed, the person is expected to choose their own investments. That can be intimidating for someone without a strong financial background.
It's also not industry standard. Plenty of dealers will offer their expertise when asked. They may not be able to make a detailed plan for you, but they can explain the benefits and drawbacks of different investments. They can give you enough information for you to make an informed decision.
Accuplan doesn't do this. So if you want a company that will help you feel confident about your choices, this one isn't it.
Saving on Fees
You do save on commission fees when you choose your own investments with a self-directed IRA. When you have a financial planner control your portfolio, they usually charge a percentage of your overall wealth. As the years go by and your wealth grows, that percentage can seriously eat into your savings.
Now, you don't generally lose money with a financial planner. Instead of taking their cut from your existing investments, they take a percentage of your gains over time.
This does motivate them to make investments that will have the highest short-term and long-term gains. The better they are at growing your assets, the better they get paid themselves.
But many people don't want to pay an advisor to manage their assets forever, especially if they already have expertise.
Who Should Make Their Own Investments?
There are benefits to a self-directed IRA with no guidance if you know what you want. You'll be happy with the offering if you meet these criteria:
If you don't have a financial background, we recommend working with a company that streamlines the IRA account process. Accuplan doesn't do this.
Difference Between Self-Directed 401(k)s and IRAs
There are self-directed 401(k) and IRA options available. Accuplan helps you purchase assets for both of these. Each account is built to help you save for retirement, but only the 401(k) comes through your employer.
Self-directed 401(k)s are therefore more restrictive than IRAs. You do still have the ability to build your portfolio by choosing your own investments and asset allocation. However, you will need to choose from the types of assets that your provider offers. With an IRA, you can do whatever you want.
The freedom of an IRA does have some trade offs, though. When you use a 401(k) instead, your employer can match your contributions, which lets you save twice as much. In addition, you often get lower overall fees because you have the advantage of your company's backing.
An IRA is right for you if you want complete and total control. A 401(k) is best if you're okay with surrendering some freedom in order to have your contributions matched.
About a Real Estate IRA
Self-directed IRA companies often use real estate as their main venture. Real estate is a popular choice because it is an asset that always has value. But predicting the market can be tricky. Many of the top industry brokers on the market don't have any real estate offers for sale, instead focusing on crypto and precious metals.
Accuplan aims to be a broker that offers self-directed IRA options in real estate. The company allows you to purchase real property for your retirement. With other competitors, it's most common for investments to be relegated to stocks in real estate companies.
When you invest in real estate with Accuplan, you have to follow the regulations set out by the IRS. Accuplan's experts are familiar with these regulations, so they can help you through the process and ensure you stay compliant. Again, if they didn't have such poor feedback, we'd recommend them based on this.
IRA Account Options
You can open three different IRAs with Accuplan:
Each account has a slightly different setup that comes with its own advantages and drawbacks.
With this type of IRA, you can invest using an LLC. When you use an LLC for your investment, you can connect a checkbook to the IRA. The goal is to remove the third party from the situation so that you can directly control the flow of your assets.
You can't use an LLC to store retirement assets in your home. If you want to invest in precious metals, you have to abide by IRS regulations. In addition, you can't submit precious metals you already have as part of an IRA. You have to buy new metals from an approved dealer.
But it is possible to register an LLC for the sole purpose of connecting your checkbook to the retirement account. Most brokerages aren't familiar enough with tax law to offer this service, but Accuplan does.
In addition to having a checkbook, this type of account lets you invest in alternative assets like real estate and precious metals. You can defer taxes on your capital gains until you start taking contributions. And if you face any legal problems over the account, you have the protection of limited liability.
SEP IRAs are a fairly common type of IRA. With these, your employer can make contributions to your account, but you still retain full control over the assets you choose.
This is a good choice if you have an employer that's amenable to IRA contributions.
Precious Metals IRAs
You'll get access to a variety of precious metals that you can purchase with your IRA funds. You can choose from bullion and coins in palladium, platinum, silver, and gold. You'll need to pick assets that meet the IRS regulations for the type of precious metal and the purity.
Assets like collectible coins can't be admitted into an IRA. Cryptocurrency can, but Accuplan's market doesn't offer cryptocurrency right now. If you want to invest in crypto, you're better off looking for a dealer that does both crypto and precious metals.
You'll pay an initial fee for the company to get your account set up. You'll also need to pay a monthly fee of 12 dollars and a yearly fee of 195 dollars. These costs cover the price of storage, maintenance, and insurance in an IRS-approved facility.
This may not take into account the additional fees you'll pay a third party custodian. If that's the case, then these prices are much higher than the ones you'll find with a lot of the top industry competition.
Accuplan's fees tend to be steeper than the leading competition. However, they also have lower minimum thresholds for investment. If you don't have a lot of money to put toward your retirement right now, that might appeal.
Retirement accounts have a fee of 275 dollars per year. The setup fee is usually 50 dollars, but it's been waived for now. You must have at least 395 dollars to invest in the retirement account to get set up.
You can also open personal investment accounts, which allow you to purchase assets for your current portfolio. Setup costs for these are also waived. You must have at least 100 dollars to invest, and you'll pay a fee of 8 dollars per month. That adds up to 96 dollars per year.
If you set up a retirement account, you might also need to pay your custodian for ongoing maintenance. Accuplan is not transparent about what third party fees you might face, which is a red flag. The company also offers conflicting, somewhat confusing information about the exact assets available through their marketplace.
Accuplan has a very concerning customer reputation. Despite being a smaller firm that serves a niche area, they've managed to garner quite a few complaints. It's difficult to find any good reviews whatsoever -- in fact, there isn't a single rating higher than 1 star on their Yelp page.
Their Better Business Bureau page raises some special concerns. Not only are they not accredited with the bureau, but they have indicated that they will not participate in the BBB's programs. There is no way to have your complaint resolved through the BBB, and the agency recommends people talk to their attorneys about complaints instead.
The Yelp reviews confirm the suspicion we had from looking at their website. The business purposefully confuses and misleads people into investing more than they should, and then it makes it horrible to try to manage your account.
They seem to be preying on people who don't know much about retirement investing. Anyone with investment experience would notice the red flags and stay away. And by refusing to offer investment guidance, they're leaving their customers out in the cold.
We like the services that the company offers. But they simply operate too badly for us to recommend them.
Accuplan is a company offering a variety of different assets for use in self-directed retirement accounts. They will help with your account setup, but they won't provide financial advice or help you choose your investments.
The company's offerings are intriguing, particularly the real estate IRAs. But they have garnered exclusively negative reviews online. In addition, they've burned their bridges with the BBB, and their website is full of confusing misinformation.
They can't be considered scammers because they offer legitimate services. However, their business practices are predatory in nature. We'd avoid them. Instead, you might consider investing with a well-reviewed and transparent company that offers the educational materials you need.
This isn't the worst self-directed IRA company in the industry. But it is one with enough detractors and major red flags to give us pause.