Investing in startups through an IRA

IRAs (individual retirement accounts) offer Americans a valuable (and tax-advantaged) way to save money for retirement.

In a traditional IRA, taxes are only collected when the money is withdrawn (during retirement). This allows your investments to grow and compound for a much longer period of time before taxes are taken out, and can significantly boost after-tax returns.

To learn more about the basics of IRAs, and the differences between a Roth and Traditional IRA, head on over to Investopedia. 

Since they were introduced in 1975, IRAs have played a key role in retirement planning for millions of Americans. But until recently, the assets you could invest in through these vehicles was often limited to publicly-traded securities such as mutual funds, ETFs, individual stocks, and bonds.

Alternative (self-directed) IRAs

Over recent years it has finally become possible to invest in private startups through a “self-directed” IRA. Investing in startup companies through an IRA could have substantial long-term tax benefits if gains are realized.

If you already have a self-directed IRA, you can learn how to invest through it on Republic here. If you’re interested in opening an IRA that can invest in startups (and other alternative assets), today we’re going to look at three companies who offer self-directed IRA services which can invest in startups.

First up is AltoIRA. AltoIRA offers their customers the ability to invest in startups, cryptocurrency, precious metals, real estate, and other assets. The firm has its simple, transparent pricing listed on their website and next month you will be able to use your AltoIRA account as an investment entity and payment method directly on Republic.

RocketDollar is another provider of self-directed IRAs. Like AltoIRA, you can invest in a large range of alternative assets including startups, real estate, gold, and loans. RocketDollar offers a “solo” IRA for self-employed folks and even ran a successful campaign with Republic recently. 

New Direction Trust Company also offers self-directed IRAs (and 401ks) and their customers have used Republic since 2018. The investment options are similar to those offered by other providers, and include real estate, private loans, startups, and private equity. 

As we mentioned earlier, it is already possible to make investments on Republic through a self-directed IRA. However, we’re working to make it even easier in the near future, so stay tuned for announcements if this option piques your interest. And let us know about other providers you want us to integrate and collaborate with.

This educational article is provided by Republic to help its users understand this area of the market, it should not be construed as investment advice as it is impersonal, disinterested and was produced by Republic for Republic’s users, without remuneration received or expected.