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# 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 structure**that 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.