By: Roger Wohlner
What You Need to Know
- The Democratic proposals would limit the ability of investors to hold many private and alternative investments in retirement accounts.
- Self-directed retirement accounts are a popular way, and sometimes the only way, for the merely affluent to have access to these investments.
- Holding private investments in self-directed retirement accounts offers additional opportunities for investors beyond traditional stocks, bonds and mutual funds.
Apart of the wide-ranging tax package proposed by the House Ways and Means Committee would limit the ability of IRA and retirement account holders to invest in certain alternative assets that are often associated with wealthy and sophisticated investors.
This is an outgrowth of the furor over billionaire Peter Thiel’s $5 billion holding in his Roth IRA. However, in their efforts to curtail some of the strategies used by the ultra-rich, the Democratic proposal would limit the ability of smaller investors, including some of your clients, to fully diversify their retirement accounts with alternatives and private investments.
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