what is a self directed ira sdira 
a self directed individual retirement account sdira is a type of individual retirement account ira that can hold various alternative investments normally prohibited from regular iras although a custodian or trustee administers the account it s directly managed by the account holder which is why it s called self directed available as either a traditional ira to which you make tax deductible contributions or a roth ira from which you take tax free distributions self directed iras are best suited for savvy investors who already understand alternative investments and want to diversify in a tax advantaged account understanding a self directed ira sdira the main difference between an sdira and other iras is the types of investments that you can hold in the account in general regular iras are limited to common securities like stocks bonds certificates of deposit cds and mutual or exchange traded funds etfs but sdiras allow the owner to invest in a much broader array of assets with an sdira you can hold precious metals commodities private placements limited partnerships tax lien certificates real estate and other alternative investments 1as such an sdira requires greater initiative and due diligence by the account owner taxes withdrawals and contributionscontributions to a self directed ira are limited to annual amounts in 2023 this is 6 500 for those under age 50 with a 1 000 catch up contribution for those over 50 in 2024 the amount increases to 7 000 with the catch up contribution remaining the same 2