IRA Custodians, What Do They Do?


If you have an Individual Retirement Account you must have a custodian. What does a custodian actually do?

An IRA is a wonderful way to invest for your retirement. For all sorts of reasons an IRA is an exceptional vehicle to invest retirement funds, not least of which is the tax advantages that our generous government has afforded IRAs.

Of course the tax advantages that they give to IRAs are all for the benefit of the governement so that they don’t have to pay out so much in retirement benefits in the future, however the end result is that we benefit.

But we didn’t want to discuss the benefits of IRAs today, but to look at IRA custodians, and what they do.

Anyone who has an IRA has to have a custodian by law. The job of the custodian is to both hold the assets of the IRA, to officially manage the assets and to keep up the bookwork, or keep track of the assets. And to report to the government when necessary.

Generally a custodian for an IRA charges a fee for this service, and this may be a fee per transaction, or perhaps an annual fee.

We have talked about self directed IRAs before. In the case of a self directed IRA there is still a custodian, however generally the custodian acts at the direction of the holder of the IRA.

The whole reason for having a self managed IRA is so that the owner of the IRA can direct their own investments, so any tasks done by the custodian are usually done so at the direction of the account holder.

And if an individual has a self directed IRA they are able, if it is set up properly, to invest their retirement funds in real estate, and it is the custodian that holds the real estate.

If you have an IRA you must have a custodian. It’s your choice of both the type of IRA you have, and the custodian is also chosen by you.

The choice of both IRA type, as well as custodian, is an extremely important one, so do your homework and choose wisely.

And remember, the best type of IRA is one that allows you to invest in real estate. Set up a self managed IRA that allows you to do that, and choose a competent custodian, and invest in the best IRA real estate investments, and you’ll be way in front of 96% of investors when it comes to retirement.