We only endorse products that we truly believe in. Some of the links below may earn us some extra guac at no additional cost to you. Please pass the chips & thank you for feeding our habit.
Choosing the right retirement savings account can feel overwhelming. I first started investing for my retirement when I was in my early twenties, and it felt like there weren’t many options for me to choose from. The prospect of investing in real estate interested me, but I didn’t have the funds available to purchase a specific property. Not to mention, I didn’t really want to deal with the headache of property management.
Fundrise allows investors to choose a self-directed IRA where they can invest in eREITs for a low annual fee through Millennium Trust Company. The annual fee of $125 can be waived with a $3,000 annual investment or a $25,000 total investment. It is best for those in need of long-term investments.
Do you think that Fundrise could be the solution you have been searching for? Learn more about whether the Fundrise IRA review could be right for you!
How Does The Fundrise IRA Work?
Fundrise offers a unique option that allows individuals who may be non-accredited to invest in real estate without having to actually purchase a property on their own. Investors are not going to be held responsible for repairs or damage to the property as you would if you were a landlord. You get many of the benefits of investing in real estate without having to deal with tenants or rental issues.
Investors who are looking toward the horizon for their retirement days may want to consider investing in a self-directed IRA account with Fundrise. They offer both traditional and Roth IRA accounts, so you can be certain that you are using the right type of account.
Keep in mind that Fundrise does not facilitate IRAs themselves. Instead, they use a custodian known as the Millennium Trust Company. When you set up an IRA, you will create an account with Fundrise, connect and fund the account through Millennium Trust Company IRA, and then select your investments on Fundrise.
For investors who are unsure whether Fundrise is right for them, the good news is that opening an account is free. There are fees associated with an IRA through Millennium Trust Company, but you can log into Fundrise and research their investment options. This can help uncertain investors to get their questions answered before they have actual money on the line.
Investors are free to choose what they want to invest in with a self-directed IRA through Fundrise and Millennium Trust Company. The Fundrise IRA allows you to invest in their eREITs and not their eFunds. This allows you to select investments that are right for you based on geographical location and more.
Pros Of The Fundrise IRA
There are many reasons savvy investors are considering IRA investment through Fundrise. There are a lot of benefits to investing in real estate this way without the headache of having to manage properties on your own. Take a closer look at how you can benefit from a Fundrise self-directed IRA.
One of the reasons their retirement savings accounts are so popular is due to the low fees. Compared to other platforms, Fundrise is relatively inexpensive. Their IRA custodian charges just $125 per year to manage your investments.
Investors may even be able to get a waiver for their IRA fees under certain circumstances, making it even less expensive for certain individuals. These waivers are relatively easy to obtain if you are serious about investing in your IRA. For example, investors can get a one-year waiver with a $3,000 or more investment. Recurring waivers are granted when an account is maintained with more than $25,000.
You will also be charged the typical annual fees associated with Fundrise investments. They have a 1 percent annual fee for account management (0.85 percent annual asset management and 0.15 percent annual investment advisory fee).
Another benefit to investing in a Fundrise IRA is that it gives access to a diversified portfolio of real estate that investors may not have been able to achieve otherwise. It allows you to select an REIT that presents a diversified portfolio of real estate. In exchange for your investment in the platform, you earn dividends that can then be reinvested in the IRA.
Many investors love using Fundrise because everything can be handled digitally. In just a few minutes you can open and fund your account from the comfort of your couch. If you already have an existing retirement account in one of the following forms, you can also roll over your funds to a new investment strategy with Fundrise:
- Employer-sponsored plan
Of course, you can also easily fund a new IRA with Millennium Trust Company in a few minutes if you have your bank account information handy.
Fundrise IRA Cons
Unfortunately, investing in a Fundrise IRA may not be as lucrative as it sounds. There are a few disadvantages to using a self-directed IRA through Fundrise. Most notably, there is only a limited history of success with this investment vehicle.
Fundrise itself was founded in 2012, so there is no real long-term data on their returns. Investing in an IRA requires investors to keep their eyes on the long-term to ensure that their funds will be there when they eventually retire. While Fundrise has had great success over the past ten years, it remains to be seen whether they will be able to replicate that success in the upcoming decades.
Another con of investing in real estate through Fundrise is that you do not get to choose a specific property. Many people like investing in real estate because it is a tangible asset that they can touch. However, the passive investing method found in Fundrise’s IRA accounts presents you with a diversified portfolio that doesn’t grant access to individual properties.
Last but not least, it is worth noting that investing in Fundrise for your IRA means that your money may be tied up for some time. Unlike other more liquid assets, investing in REITs through the platform may keep your funds hostage for years before you can cash out.
It is recommended that you plan on keeping your money with Fundrise for a minimum of five years, though you will have an opportunity quarterly to cash out with just a few limitations. If you intend to retire sooner than this, then you may want to consider other IRA investments with brokerages that allow you to cash out sooner.
Should You Invest in a Fundrise IRA?
If the prospect of investing in real estate appeals to you but you lack the funds to purchase a few properties on your own, you might want to try the self-directed IRA available through Fundrise. It comes with low fees, some of which can be waived with the right investments. You can also take care of everything digitally from the comfort of your own home.
Keep in mind that investing in an eREIT is a long-term game. If you know that you will want to take distributions from your retirement savings account in the next five years, then investing in real estate may not be the best fit for you.
If you are still interested in investing through Fundrise, it can be a great opportunity for the right individual. Be sure to sign up for your Fundrise account today to start taking advantage of these benefits!