What is a Self-Directed IRA (SDIRA)?

A Self-Directed IRA (SDIRA) is the foundation of any precious metals IRA — including the ones SoundMoney helps you set up. Here's what you need to know:

The Simple Definition

A Self-Directed IRA is an Individual Retirement Account that gives you control over what you invest in — going far beyond the stocks, bonds, and mutual funds offered by traditional IRAs. With an SDIRA, you can invest in a much broader range of assets, including physical precious metals like gold and silver.

How Is It Different From a Regular IRA?

With a traditional IRA through a bank or brokerage, the custodian typically limits your investment choices to their own lineup of financial products. A Self-Directed IRA, by contrast:

• Allows investment in alternative assets like physical precious metals, real estate, and more
• Puts you in the driver's seat — you direct the custodian on what to buy
• Still carries the same tax advantages as a traditional or Roth IRA
• Still requires a qualified custodian to administer the account — you direct the investments, but you don't hold the assets yourself

What Are the Tax Benefits?

SDIRAs come in two main flavors, just like regular IRAs:

Traditional SDIRA

• Contributions may be tax-deductible depending on your income and circumstances
• Your metals grow tax-deferred — no taxes until you take distributions
• Distributions in retirement are taxed as ordinary income

Roth SDIRA

• Contributions are made with after-tax dollars — no upfront deduction
• Your metals grow completely tax-free
• Qualified distributions in retirement are 100% tax-free

Who Controls a Self-Directed IRA?

Three parties work together in your SDIRA:

• You — you make all investment decisions and direct your custodian on what to purchase
• The Custodian — an IRS-approved administrator (SoundMoney uses New Direction Trust Company / NDTCO) who holds the assets, handles paperwork, and ensures IRS compliance. Importantly, the custodian does not provide investment advice
• The Depository — a secure, approved facility where your physical metals are stored (SoundMoney's preferred depository is Money Metals Depository in Eagle, Idaho)

What Are the Rules?

An SDIRA follows the same IRS rules as any other IRA:

• Contribution limits of $7,000/year (or $8,000 if age 50+)
• Required Minimum Distributions (RMDs) beginning at age 73 for traditional SDIRAs
• No early withdrawal without a 10% penalty before age 59½
• No prohibited transactions — you cannot personally use or benefit from the assets held in your SDIRA before taking a proper distribution
• No home storage — physical metals must be held at an approved depository, not at your home or in a personal safe

Why Does SoundMoney Use an SDIRA?

A standard IRA custodian simply won't allow physical precious metals. An SDIRA is the only IRS-compliant structurethat allows you to hold real, physical gold and silver inside a retirement account. It combines the wealth-preserving power of precious metals with the tax advantages of a retirement account — the best of both worlds.

Updated on: 09/04/2026