Self-Directed IRA Investor’s Guide to Contributions, Transfers and Rollovers

Welcome to the world of self-directed IRAs! Guess what? These powerful investment tools are just like regular IRAs in so many ways (except for investing). Just as with a typical IRA, a self-directed IRA can be funded in three ways:

1. Contributions

2. Transfers (IRA to IRA)

3. Rollovers from previous employer plans


Always check with your tax adviser before making a contribution. Whether you have a typical or self-directed IRA, the contribution limits are the same:

Traditional IRAs – 2013-2016: $5,500 (If 50-plus, $6,500)

Roth IRAs – 2013-2016: $5,500 (If 50-plus, $6,500). You can contribute to a Roth IRA if your income falls below the Roth limits. You’re allowed a prorated contribution if your income falls within the “phase-out” range. If your income exceeds the income range, you won’t qualify for a Roth IRA contribution.

SEP IRAs – 2016: $53,000 (or 25 percent of your income, whichever is less)

SIMPLE IRAs – 2015-2016: $12,500 (If 50-plus, $15,500)


An IRA-to-IRA transfer is another way to fund a self-directed IRA. You start this process by filling out a Transfer Request Form.

• Make sure you provide the address of your current custodian’s transfer department on the transfer form. This will ensure that your transfer form is sent to the department that is designed to facilitate your request.

• Some, but not all, custodians require a Medallion Signature Guarantee. This “medallion stamp” can usually be obtained at your bank. Ask your current custodian if it requires this type of signature guarantee.

• It’s best to contact your present custodian to request your fund be liquidated to cash. In this way, delays can be avoided. Oftentimes custodians will not accept an attached written request to liquidate funds and instead require the customer or client to request this directly.

The latest news on transfers is that on Dec. 18, 2015, the Conservation Appropriations Act of 2016 was signed into law. As part of that law, you can now roll over from a qualified plan or traditional IRA to a SIMPLE IRA as long as the SIMPLE has met the two-year requirement. Previously, you could not roll over an employer plan or traditional IRA into a SIMPLE.


You can fund a self-directed IRA by “rolling over” a previous employer plan. Usually, the company you are working for will not allow a rollover while you are “in-service.” You can go to the plan administrator and ask if you qualify for an “in-service transfer” These in-service transfers are granted if the plan document allows for it.

To roll over an employer plan, contact your present custodian and request its rollover documentation. Complete the necessary forms and return them. Once your current custodian receives your request, it will respond. Sometimes these custodians require your new account number in order to process your request.

Your current custodian will need to make the check request. After your account is established, you can provide this new account number to your previous employer’s plan administrator.

Once your self-directed IRA is open and funded, you can invest! With a self-directed IRA, all investments are chosen by you. Be sure to do your due diligence on investments to minimize the risk to your hard-earned retirement savings!

  • Kaaren Hall

    President and CEO Kaaren Hall founded uDirect IRA Services as a single mom looking for a strategic way to put her 20-plus years in mortgage banking, real estate and property management to use. The solution was an untapped market for both her skills and for investors: self-directed IRAs. As a third-party administrator, uDirect IRA Services provides complete and accurate information on self-directed IRAs so its clients can make the most of their retirement funds. The company does not promote any investments, but instead provides the knowledge, tools and information to make self-direction easy. 866-447-6598

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