IRA and Self-Directed IRA Comparison Chart: Highlighting a Few Key Differences

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1 According to the Internal Revenue Service, an and an account considered to be a self-directed are the same. s were created by the government to provide individuals an opportunity to save for retirement when their employer did not provide a retirement plan. Over the years, s have grown to become the largest source of retirement savings in the country, accounting for over $7.8 trillion of retirement assets according to the Investment Company Institute as of the third quarter of Self-directed s are unique because of their ability to invest in a wider range of investment options than other s that only support traditional investment options like stocks, bonds and mutual funds. Review the comparison chart below to learn some of the features of an and the potential advantages a self-directed may provide. Boxes highlighted in orange indicate a difference between an and a Self-. Anyone* can have an as long as they have earned income. (See notes section to the right) Account Characteristics Not tied to an employer your personal retirement account Annual contribution limit in 2017 $5,500 $5,500 Annual catch-up contribution limit in 2017 for those age 50 or older $1,000 $1,000 Able to contribute to a Spousal when only one partner has earned income May be possible to rollover/transfer existing retirement assets to a new Must have taxable compensation in a given year to open/contribute to the account. *Minors under age 18 require a parent/guardian to open an account, sign paperwork and direct the account activity. Use an to stay focused on retirement savings wherever your career and life may go. Potential to rollover from employersponsored plans such as 401(k)s, 403(b)s, Thrift Savings Plans, etc. as well as s from another institution. Please consult with your tax attorney, CPA, financial advisor or other financial professional before making any investment decisions.

2 Traditional options available: Funded with pre-tax dollars Tax-deferred investment growth while inside the account Taxable distributions when withdrawn from the account in retirement If qualified, investors receive a tax deduction for the amount contributed in a given year To those who qualify Subject to Required Minimum Distribution (RMD) requirements at age 70 ½ Roth options available: Funded with after-tax dollars Tax-free investment growth while inside the account Tax-free distributions when withdrawn from the account in retirement To those who qualify Subject to certain income eligibility requirements Not subject to Required Minimum Distribution (RMD) requirements Institution providing the (Where can you set up a new ) Bank or other financial institution Life insurance company Mutual fund company Brokerage firm Self-directed custodian Self-directed administrator Self-directed facilitator It is important to remember that, unlike self-directed custodians, self-directed facilitators and administrators are not able to custody your self-directed. Self-directed or 401(k) facilitators and administrators are not held to the same standards as approved custodians and often do not offer as many services as a custodian, such as the ability to directly hold assets or issue funds from the.

3 Must pick from a list of investment options/ products made available by the financial institution providing the. Investment Options Available You select the investments! Assuming IRS rules are followed and the investment is administratively feasible for Equity Trust, you are able to self-direct your custodian to make the investment on behalf of your. Equity Trust does not provide investment options or advice but provides the platform for clients to direct their funds into investments they identify. Public stocks Public bonds Mutual funds Certificates of Deposit (CDs) Exchange-Traded Funds (ETFs) Able to invest in alternative asset classes of your choosing. Real property (i.e. real estate) Issue a loan/promissory note secured by collateral Tax liens Physical gold and other precious metals Private stock Private placements Limited Partnerships Many custodians do not support alternative investments and only allow investments in stocks, bonds, mutual funds and other traditional asset classes.

4 LLCs C-Corporations Land/Personal Property Trusts Able to invest in other avenues beyond the traditional market or real estate even unique investments As long as you follow IRS rules, you have the ability to invest your self-directed into a wide variety of assets, even unique options like livestock, dressage horses, oyster beds, self-storage facilities, medical equipment, Broadway productions and more! Please consult with your tax attorney, CPA, financial advisor or other financial professional before making any investment decisions. Account Responsibilities and Fees Can the custodian, brokerage firm/broker- Dealer or institution holding my provide investments and/or investment advice Some financial institutions may provide a list of investment options and may offer financial advice or management services, which may be reflected in the fees charged for the account. Self-directed custodians are required to be passive custodians and cannot provide investments or investment advice.

5 Who manages my investments and makes investment decisions Am I able to work with my advisor, CPA or other financial professional to select my investments and manage my account s portfolio While every is ultimately under the account owner s control, the level of control over investment management and decisions may vary depending on the account-type, institution and investment selections. For example, if your is invested in a mutual fund, ETF or other managed investment, the performance of that investment will depend on the decisions of the fund manager(s). You make the decisions associated with your account and can determine the strategy for your portfolio. However, if your selfdirected is invested in a mutual fund, ETF or other managed investment, the performance of that investment will depend on the decisions of the fund manager(s). Self-directed investors have an increased responsibility regarding their account and all decisions associated with it. Please consult with your tax attorney, CPA, financial advisor or other financial professional before making any investment decisions. Self-directed doesn t have to mean you are alone. In fact, you should be working with your advisor, CPA or financial professional to help make your decisions. Are the account set-up fees Are there annual account maintenance fees Are there transaction or distribution fees At Equity Trust, there are transaction fees for normal processing. Fees will be charged if special handling services are requested and/or the account is being terminated. *Excludes ETC Brokerage Services Am I charged trade commissions Only for ETC Brokerage Services, should you elect to use them

6 Am I charged management fees Am I charged based on the investments I select Equity Trust does not charge fees for alternative assets (such as real estate or promissory notes), but fees may be incurred on stock and mutual fund selections, similar to an at a non-self-directed custodian. 1 Investment Company Institute. (2016, December 22). Retirement Assets Total $25.0 Trillion in Third Quarter Retrieved from ret_16_q3 Equity Trust is a passive custodian and does not provide tax, legal or investment advice. Any information communicated by Equity Trust is for educational purposes only and should not be construed as tax, legal or investment advice. Questions relevant to your specific tax, investment, accounting, legal, estate or planning needs should be addressed to practicing members of those professions only after fully disclosing all relevant and material facts regarding your specific situation. Whenever making an investment decision, please consult with your tax attorney or financial professional. ET