@Misspag wrote:
Hi Franklin,
Thank you for your reply. How can I find out what the "strict rules" are? Is a self-directed IRA different from the Rollover IRA that I opened when I left my last job?
Thanks,
Suzanne
I think the answer was over-complicated.
Unfortunately, if your employer chooses plan X, there is nothing you can as far as investing pre-tax salary outside of plan X. Your options (to get any tax advantage over a regular broker account) are to open a traditional IRA and make tax-deductible contributions, open a Roth IRA and make non-deductible contributions, or open a traditional IRA and make non-deductible contributions and then do a back-door conversion.
The main problem with IRAs is your contribution limits are much lower than a 401k, if you can afford to invest that much, so once you max out your IRA, you may want to go back to Voya since you may not be including the value of the tax savings in your investment return comparison. Voya appears to offer a lot of fund choices, although they are captive funds. What are you invested in with them?
https://individuals.voya.com/defined-contribution/defined-contribution-investment-options
Since you are covered by a retirement plan at work, your ability to deduct an IRA contribution is limited by your income.
https://www.irs.gov/retirement-plans/ira-deduction-limits
Your ability to contribute to a Roth IRA is also limited by income, but the limits are higher.
https://www.irs.gov/retirement-plans/roth-iras
You can open an IRA or Roth IRA at any bank or broker that offers them (including Fidelity, where you already have an account). They should allow you to invest in almost anything that is traded on a public market. Usually you will find a suite of "standard" options that the bank or broker prefers, but you can almost always find a self-directed option, where you tell Fidelity or whoever, that you want to invest in something from the stock market that is not part of their "standard" list of options. This is not what @FranklinF meant.
What Franklin is talking about is a true self-directed IRA, where you can invest in anything you want and call it an IRA. You can buy gold and hide it under your bed and call it your IRA. You can invest in the corner bodega, or your best friend's bowling alley, or you can buy vacant land hoping to sell it to a developer, and call it part of your IRA. This is much more complicated, and dangerous, than going through a "normal" bank or broker firm.
If you are mainly just unhappy that Voya doesn't offer the investments you want, and you just want to invest in a broader selection of publicly traded securities (but nothing weird), then all you need to do is shop around for a bank or broker that offers more flexibility in their IRA plans. As long as your income allows you to make contributions.
