Year-End Planning Tips for Self-Directed IRA Investors

A new focus on alternatives while SDIRA investors stay ahead of the curve

Much has been made of the Democratizing Access to Alternative Assets for 401(k) Investors executive order, designed to encourage broader access to alternative investments. The order directs the Department of Labor and the Securities and Exchange Commission to “consider ways to facilitate access to investments in alternative assets” in certain participant-directed retirement savings plans.

For self-directed IRA (SDIRA) investors, however, alternative assets have been a cornerstone of investing for decades. Even as more 401(k) participants may soon gain access to new investment options, it’s worth remembering that SDIRA owners have long enjoyed the flexibility to diversify beyond traditional markets—and now is an ideal time to revisit those opportunities and consider end-of-year actions.

The benefits of a self-directed IRA

If you already have an SDIRA, you are familiar with the advantages of self-direction. STRATA's 2025 SDIRA Investor Survey Report underscores the experience and sophistication of SDIRA investors, who tend to take a long-term, strategic approach to alternative assets rather than make impulse decisions. Among its benefits, a self-directed IRA allows you to:

• Grow tax-deferred, or even tax-free (with Roth IRAs)
• Diversify across a wide range of assets, from real estate and private equity to precious metals
• May allow investors to hedge effectively against “traditional market” downturns

Of course, prudent self-direction may also require diligence to ensure that certain rules—such as those against “prohibited transactions”—are closely followed. Investment sponsors must also work hand-in-hand with SDIRA owners and IRA custodians to properly administer these accounts. For example, investment sponsors must provide an annual good faith estimate or fair market valuation so that the custodian can properly generate the required information returns.

Year-end opportunities to consider

As 2025 draws to a close, it’s a good time to take a fresh look at your SDIRA strategy. A few proactive steps now can help you make the most of your account and reduce year-end stress.

1. Make contributions before the deadline

You can make an IRA contribution for 2025 until your tax return due date, usually April 15, 2026. But why wait? Why not get your current-year contribution working for you before the last moment? Consider making your 2025 IRA contribution now instead of waiting. That said, there may be valid reasons to delay. Depending on your projected income, you might not know if you're eligible to make a Roth IRA contribution. However, if you're confident about your eligibility, contributing now could be a wise choice. And if your circumstances change, you can withdraw current-year contributions until your tax return due date (including extensions) without penalty.

Rollover contributions to your SDIRA might also be an option. If you've changed jobs, reached age 59½, or experienced other significant life events, you could potentially transfer employer-sponsored retirement plan assets to your SDIRA. Several factors determine if this is the right choice for you, so it's important to seek reliable advice before rolling over such assets.

2. Prepare for required minimum distributions (RMDs)

For those age 73 or older this year, required minimum distributions (RMDs) must be taken from your IRAs each year. These tactics may make this process easier—and may even reduce your taxes.

• Consider aggregating your RMDs – If you have multiple IRAs, you may prefer to take the total RMD amounts from any one (or more) of your IRAs, in any combination. The IRS does not care where the RMD comes from as long as the total amount is properly taken. But keep in mind that you cannot aggregate your IRA RMDs with RMDs that are required from a qualified plan (such as a 401(k) plan); those RMDs must be taken separately. You may wish to satisfy your SDIRA RMD from another, more liquid IRA. This may allow you to avoid liquidating your alternative investments unnecessarily.
   
• Know your SDIRA’s fair market value (FMV) – Many self-directed IRAs contain assets that are difficult to value. If you invest in assets that are not easily appraised, start the process of determining this FMV early. STRATA does not perform independent appraisals, so your investment sponsor should provide this FMV to you and the custodian. If they do not, you may need to get this valuation yourself with the help of a qualified valuation professional. A reasonable, fair market valuation or good faith estimate is crucial for calculating proper RMDs. They are also required by the IRS for all IRAs each year, even if no RMD is needed.
   

• Consider a QCD – For those who are 70½ or older, a qualified charitable distribution (QCD) can help you meet your RMD without increasing your taxable income. Individuals can transfer up to $108,000 (for 2025) directly from their IRA to an eligible charity. Although QCDs must be reported as IRA distributions on your tax return, they are not counted as taxable income. This allows you to use the standard deduction while still gaining the same benefit as a charitable deduction.

   

3. Review your self-directed investments

This may be a good time to review whether your current SDIRA investment choices still align with your long-term savings goals. With investment options expanding at every turn, this diverse array can be beneficial but may also complicate decision-making. Revisiting your asset allocations, comfort with risk and return, and overall understanding of your investments can bring clarity. As always, STRATA recommends consulting with a qualified professional for investment advice.

Expert custody

While STRATA does not provide investment advice, we specialize in the custody and administration of alternative assets. Our SDIRA experts can help facilitate transactions efficiently and ensure your SDIRA remains in compliance with IRS requirements. 

Even as the broader retirement industry begins to embrace alternative investments, STRATA has been doing so for decades. Leverage our experience to help keep your retirement savings on track and aligned with your goals.