Rocket Dollar is an investment company designed to fix that. With a Rocket Dollar account, you can buy virtually any investment in the world. You could use a Rocket Dollar retirement account to invest in stocks and bonds, but it's even better for things like investment properties that you can't hold in a traditional brokerage.
While it isn't free, it makes sense for a wide variety of use cases and investment goals.
Rocket Dollar Features and Pricing
- Self-directed retirement investing — Most brokers allow you to choose your own mutual funds or stocks, but Rocket Dollar gives you complete and full control. If you want, you could even buy your own herd of cattle. Check out the next section for some popular choices of existing account holders.
- IRA LLC — When you open a new IRA at Rocket Dollar, you're also opening a new LLC and LLC bank account. The IRA LLC is the legal holder of your assets. This business entity is the key that makes the self-directed retirement account work.
- Checkbook control — Once your account is open, you have what Rocket Dollar calls “checkbook control.” This means you can buy assets with the LLC bank account's checkbook. If you are closing on a new investment property, for example, you'll want to fund the transaction with your Rocket Dollar account so it is the legal owner.
Note: Please check with your legal advisor to ensure your investments do not become prohibited transactions, which can have very expensive consequences.
- Flat fee — There is no sliding scale for costs based on the size of your account or other factors. It's just $15 per month with no guesswork involved. Rocket Dollar recommends you pay this fee with an external credit or debit card to avoid draining your account balance and related tax implications.
- Quick setup — You can open an account in about 10 minutes with no minimum starting deposit required. Plan to provide your contact information and details on how you plan to fund the account. Your Social Security number is required for tax and identity purposes as well.
- Gold service– For $30 a month you can open a gold account, which includes everything in the core membership plus expedited services, an account checkbook and debit card, and tax filling services.
What Is Rocket Dollar?
Rocket Dollar was founded in 2018 to give investors an easier way to hold assets for retirement that are not possible with traditional brokerage accounts. This unique financial institution allows you to create an IRA or Solo 401(k) that works with nearly any asset you can imagine.
When you open a new account, Rocket Dollar sets up your investment account like a company. In fact, in some states, Rocket Dollar will open a limited liability company (LLC) that allows your IRA to operate its own “business” on your behalf.
While there are some existing options to invest in real estate or other assets with a retirement account, this is the easiest and most straightforward I've come across.
How Does Rocket Dollar Work?
You can invest in nearly anything once your account is up and running. It's easier to list the things you can't invest in, since that's a much smaller list than what you are allowed to buy.
The IRS prohibits IRA funds from going into life insurance, collectibles, S-Corp stock, alcoholic beverages, gems, rugs, most coins, and metals outside of a list of four specifically approved (gold, silver, palladium and platinum). As long as it is an investment and not for personal use, your limitations are… limited. Some small business owners could have a few additional exclusions.
According to the Rocket Dollar website, some popular investments include private equity, real estate, precious metals, peer-to-peer lending and cryptocurrency. If you are interested in angel investing or venture capital with your retirement funds, just write a check from your LLC bank account and you're all set.
Other popular investments include business investments (not S-Corp), business lending, undeveloped land, crops, livestock, certificates of deposit (CDs) and timber deeds.
Rocket Dollar Pros & Cons
Many Investable Assets—You can buy almost anything. This is the primary reason to sign up for a Rocket Dollar account.
Easy to Start—Sign up and open a new account in about 10 minutes.
Setup Charge—New accounts cost $360, while their Gold account costs $600 to set up.
Recurring Fee—No matter what you hold, you’ll have to pay a recurring $15 monthly fee for the core account and $30 for the gold account.
IRS Limitations on Assets—The IRS prohibits retirement investments in collectibles, alcoholic beverages and gems, among other assets.
The idea behind Rocket Dollar is very simple. But before it came along, the problem it solves was fairly complex. It was always easy to own rental property if you could afford one, but owning it in your retirement account was an entirely different proposition. Now, after opening a new account at Rocket Dollar, the process is just as easy.
To me, the most exciting opportunities when breaking out of the traditional IRA bounds are real estate, private equity and angel investing. But your goals and experience may be unique and lead you to something completely different.
Overall, if you can justify the cost and have a good asset in mind, Rocket Dollar provides a great service. If you want to do something more creative with your retirement accounts, a self-directed Rocket Dollar account could be the right fit.