If you’ve only used a traditional or Roth IRA before, your investment choices were likely limited to publicly traded assets like stocks, bonds, mutual funds, and ETFs. But with a self-directed IRA (SDIRA), you may be able to invest in a much wider range of asset types, including private real estate, early-stage businesses, and more.
This expanded flexibility can potentially help you diversify your retirement portfolio. However, it also comes with added complexity, compliance rules, and higher risks. In this article, we’ll walk through 50 examples of investments commonly held in self-directed IRAs, along with important reminders about what’s allowed, what’s restricted, and how these accounts typically work.
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What Alternative Assets Can You Invest in With a Self-Directed IRA?
The IRS doesn’t provide a definitive list of what you can invest in with a self-directed IRA. Instead, it outlines a short list of what’s not allowed. That means if an asset doesn’t fall into one of the restricted categories, it’s generally permitted—though it still must comply with IRS rules on custody, valuation, and prohibited transactions.
Here are the four types of investments that are not allowed in a self-directed IRA:
❌ S corporation stock
❌ Collectibles (such as art, antiques, or certain coins)
❌ Life insurance policies
❌ Any investment that triggers a prohibited transaction under IRS rules
If an asset doesn’t fall into one of these categories, it’s generally permitted—provided it meets structural and operational compliance.
Let’s go through the four types of investments an SDIRA is not allowed to make.
📌 Also read: Best Self-Directed IRAs of 2025
1. Life Insurance Contracts
Self-directed IRAs are not permitted to hold life insurance contracts. This restriction exists because life insurance is primarily classified as a protection product, not an investment vehicle intended for long-term retirement savings. The IRS prohibits both traditional and Roth IRAs from holding these contracts, regardless of their structure or terms.
2. Collectibles
Collectibles are explicitly prohibited as IRA investments. This includes:
❌ Artwork, rugs, and antiques
❌ Gems and certain types of coins or stamps
❌ Most metals (except for specific bullion that meets IRS standards)
❌ Alcoholic beverages and other personal-use items
These items are considered speculative and difficult to value consistently, which is why they’re generally not allowed in retirement accounts. However, there are limited exceptions. For example, certain U.S.-minted gold and silver coins and IRS-approved bullion may be permitted. It’s important to verify eligibility before making any purchase through your IRA.
3. S Corporation Stock
IRAs are generally not allowed to own shares in an S corporation stock. This is because S corporations face strict shareholder rules. They can only have certain types of individual shareholders, and IRAs are not considered eligible. If an IRA tries to hold S corp stock, the company could risk losing its S corporation status, which creates tax and compliance issues.
4. Prohibited Transactions and Self-Dealing
Even if an investment is technically allowed, the way it’s handled matters. The IRS prohibits any transaction that involves self-dealing or interaction with a disqualified person—typically the account holder, certain family members, or business entities they control.
Some examples of prohibited transactions include:
❌ Lending money to or from your IRA
❌ Selling property you own to your IRA
❌ Using IRA-owned real estate for personal benefit
❌ Paying yourself to manage or operate an IRA-owned business
📝 Note: Violating these rules can result in penalties and cause your IRA to lose its tax-advantaged status. If you’re unsure whether a transaction qualifies, it’s generally recommended to consult a qualified tax or legal professional.
50 Different Types of Alternative Assets You Can Invest in With an SDIRA
Below is a categorized list of 50 alternative assets that are commonly held in self-directed IRAs. While each investment type comes with its own risks, liquidity constraints, and due diligence requirements, many investors use SDIRAs to gain exposure to assets that align with their specific knowledge, interests, or long-term strategies.
📝 Reminder: Not all custodians allow every asset type. Always confirm whether an investment is allowed by your IRA custodian and complies with IRS rules before moving forward.
Real Estate and Physical Assets
1. Real Estate
2. Timber Investment Trusts (TIMTs)
3. Farmland and Agriculture
4. Mobile Homes and RV Parks
5. Raw Land
6. Timber and Timberland
7. Oil and Gas Leases
8. Water Rights and Infrastructure
9. Precious Metals (must meet IRS §408(m)(3) requirements and be held by a custodian)
10. Shipping Containers
Private Equity and Business Interests
11. Private Equity Funds
12. Private Placements
13. Franchise Ownership
14. Venture Capital
15. Business Partnerships (LLCs, LLPs — excluding S corp stock)
16. Royalty Trusts
17. Life Science Investments
Debt-Based Investments
18. Promissory Notes
19. Private Loans
20. Distressed Debt
21. Distressed Mortgage Notes
22. Tax Liens and Tax Deeds
23. Convertible Notes
24. Venture Debt
25. Structured Settlements and Annuities
Alternative Funds and Pooled Investments
26. Hedge Funds
27. Managed Futures
28. Specialty Funds
29. Equity Crowdfunding
30. Socially Responsible Investments (SRI)
Royalties, Rights, and Intellectual Property
32. Music Royalties
33. Film Production Rights
34. Intellectual Property (e.g., patents, trademarks)
35. Carbon Credits
36. Mineral Rights and Royalties
37. Renewable Energy Credits (RECs)
38. Carbon Capture and Storage (CCS)
Miscellaneous Alternatives
39. Equipment Leasing
40. Social Impact Investments
41. Litigation Finance
42. Employee Stock Ownership Plans (ESOPs)
43. Futures and Commodities
44. Foreign Investments
45. Secondary Market Purchases
46. Livestock and Agriculture
47. Livestock Breeding
48. Digital Real Estate (e.g., domain portfolios, monetized websites)
49. Sports Contracts
50. Structured Products
How Alternative Investments Are Made Through an SDIRA
Investing in alternative assets through a self-directed IRA involves a few additional steps compared to traditional IRAs. These accounts must follow IRS rules closely, and each transaction generally needs to be reviewed and processed by a qualified custodian.
Here’s an overview of how the process typically works:
1. Open a Self-Directed IRA With a Qualified Custodian
Per IRS requirements, all IRA assets must be held by a qualified custodian. While most major brokerages only offer traditional investment options like stocks and mutual funds, a self-directed IRA needs to be opened with a custodian that supports alternative assets.
Custodians vary in the types of assets they support. Some focus solely on specific categories, such as real estate or digital assets. Others may allow a broader range of alternative investments within your IRA.
2. Fund Your Self-Directed IRA
After opening the account, the next step is to fund it. You can do this in two ways:
- Make a new contribution. For 2025, the annual contribution limit is $7,000 (or $8,000 if you’re age 50 or older).
- Roll over funds from another retirement account. There is no dollar limit on rollovers, and these transactions typically don’t count toward your annual contribution cap.
📝 Note: The amount you’re eligible to contribute depends on your income and tax filing status. It’s important to understand how IRS contribution rules apply to your situation.
3. Make Your Investments
Once your account is funded, the investment process depends on your custodian’s procedures and the type of asset you’re purchasing. In most cases, you’ll need to:
- Submit an investment request or subscription agreement
- Provide documentation related to the asset
- Have the transaction reviewed for compliance
- Authorize the custodian to release funds
✏️ Hypothetical Example: With Carry’s Self-Directed IRA, cryptocurrency investments can be made directly through the platform. For other asset types (such as private equity, real estate, or notes), you’ll complete a short form providing details about the deal. After review and approval, funds are sent from your IRA to complete the investment.
📝 Remember: The asset must be titled in the name of your IRA, not your personal name. It must meet all IRS requirements to remain compliant.
Roth or Traditional
Like regular IRAs, there are two types of self-directed IRAs: Self-directed Traditional IRAs and self-directed Roth IRAs. Both can hold the same kinds of alternative investments. The main difference is the tax advantages offered.
Self-Directed Traditional IRA
- Funded with pre-tax income
- Contributions may be tax-deductible, depending on your income and eligibility
- Investments grow tax-deferred
- Withdrawals in retirement are taxed as ordinary income
Self-Directed Roth IRA
- Funded with after-tax income
- No upfront tax deduction on contributions
- Investments grow tax-free
- Qualified withdrawals in retirement are entirely tax-free
📝 Tip: The better option depends on factors like your current tax bracket, expected retirement income, and how long you plan to keep the investments in your account.
📌 Also read: Roth IRA Vs Traditional IRA: Key Differences & Similarities
Withdrawal Rules
Self-directed IRAs follow the same withdrawal rules as regular IRAs. The key differences depend on whether your account is structured as a Traditional or Roth IRA.
- Traditional Self-Directed IRAs: You can start taking withdrawals once you reach the age of 59½. Early withdrawals are hit with a 10% early distribution penalty plus income taxes.
- Roth Self-Directed IRAs: You can withdraw your contributions only at any age without taxes or penalties. However, to withdraw earnings from your account, your Roth IRA must be at least 5 years old in addition to you being at least 59½ years of age.
📝 Note: A Traditional IRA has required minimum distributions (RMD). You must start taking withdrawals once you reach the age of 73. Roth IRAs have no RMD rules and can be kept compounding for as long as you’re alive.
📌 Interested in investing in alternative assets? Learn how you could do it through an IRA with Carry.
Key Takeaways
Self-directed IRAs offer flexibility for retirement savers who want exposure to alternative assets beyond the stock market. While these accounts open up access to many investment types, they also come with added responsibilities.
As with any retirement strategy, it’s important to evaluate whether these investments align with your goals, risk tolerance, and long-term plans. If you’re considering a self-directed IRA, be sure to work with a custodian that supports the types of assets you’re interested in and consult with professionals when needed.
📌 Looking to learn more about retirement strategies and account options? Check out these articles:
Disclaimer:
The Carry Learning Center is operated by The Vibes Company Inc. (“Vibes”) and contains generalized educational content about personal finance topics. While Vibes provides educational content and technology services, all investment advisory services discussed on this website are provided exclusively through its wholly-owned subsidiary, Carry Advisors LLC (“Carry Advisors”), an SEC registered investment adviser. The information contained on the Carry Learning Center should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or engage in a particular investment, accounting, tax or legal strategy. Vibes is not providing tax, legal, accounting, or investment advice. You should consult with qualified tax, legal, accounting, and investment professionals regarding your specific situation.
The accounts, strategies and/or investments discussed in this material may not be suitable for all investors. All investments involve the risk of loss, and past performance does not guarantee future results. Investment growth or profit is never a guarantee. All statements and opinions included on the Carry Learning Center are intended to be current as of the date of publication but are subject to change without notice.
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