A Comprehensive Guide to Self-Directed IRAs (SDIRAs) for Accredited Investors
Featuring the SWIM Fund (Shield Wealth Income Management Fund)
If you’re an accredited investor seeking greater control and flexibility over your retirement funds, a Self-Directed IRA (SDIRA) may be the ideal solution. This guide covers everything you need to know—from what an SDIRA is to how to open and fund one, plus why SDIRAs are especially advantageous for debt fund investments such as the SWIM Fund (Shield Wealth Income Management Fund).

What Is an SDIRA?
A Self-Directed IRA (SDIRA) is a type of Individual Retirement Account that enables you to invest in a broader range of assets—beyond the usual stocks, bonds, and mutual funds commonly available in traditional IRAs. While standard IRAs often limit investment options to publicly traded securities, SDIRAs allow diversification with real estate, private debt funds, cryptocurrencies, precious metals, and more.
Key Differences from Traditional IRAs:
(For more details on IRAs and investment rules, visit IRS.gov: Retirement Topics – IRA Contribution Limits.)
Key Benefits of an SDIRA
As an accredited investor* you can invest as little as $25,000 USD and become a creditor to the fund with a fixed return of 6% or invest more money and get to 8% return.
As a creditor, you have no hassles, fixed income paid semi-annually, and you can cash out your principal with a notice to the fund manager within any 12 months period.
a. Investment Flexibility
An SDIRA opens the door to alternative investment opportunities, such as:
b. Tax Advantages
Just like other IRAs, SDIRAs offer tax-deferred or tax-free growth (for Roth accounts). This allows potential compounding of returns without annual tax drag.

3. Why SDIRAs Are Ideal for Debt Funds

a. Diversification of Retirement Portfolio
Private debt funds, such as the SWIM Fund, can diversify your portfolio outside of traditional stock market assets. This helps reduce overall volatility and potentially creates a more resilient retirement strategy.

b. Potential for Steady Returns
Private debt funds typically target predictable income or fixed interest rates, which can offer a steady stream of returns. This is especially appealing in a low-interest-rate environment, where conventional fixed-income products may not keep pace.
How to Open and Fund an SDIRA
1. Step-by-Step Guide
a. Choose a Custodian or Trustee
b. Set Up the Account
c. Transfer or Rollover Funds
2. Common Custodians for SDIRAs
Below are reputable custodians who frequently manage SDIRAs. Be sure to perform your own due diligence when selecting a provider.
1. Equity Trust
Specializes in alternative assets, including real estate and private placements.
2. Entrust Group
Well-known for facilitating various alternative investments like real estate and private debt funds.
3. Kingdom Trust
Offers custody services for cryptocurrencies and other non-traditional assets.
4. IRA Services/Forge Trust
Provides a user-friendly platform for self-directed investors.
3. Things to Avoid
a. Prohibited Transactions and Disqualified Persons
The IRS has strict guidelines on who your SDIRA can transact with and what investments are allowed. Violations can incur penalties or invalidate your IRA. Examples include:
(For detailed IRS regulations, consult IRS.gov: Publication 590-A and 590-B for more on contributions, distributions, and prohibited transactions.)
Frequently Asked Questions
Minimum investment thresholds can vary. Typically, private debt funds set a starting amount anywhere from $25,000 to $100,000+ for accredited investors. Contact the SWIM Fund directly to learn about its specific minimum contribution.
Investing through an SDIRA allows for tax-deferred growth (Traditional SDIRA) or tax-free growth (Roth SDIRA). However, if the SDIRA earns unrelated business taxable income (UBTI) or unrelated debt-financed income (UDFI), you may owe taxes. Consult with a tax advisor to ensure you understand your potential obligations.
Private debt funds often aim for steady interest rates or fixed returns, which can be more predictable than equities. However, returns vary by fund strategy, market conditions, and risk profile. Compare potential yields against real estate, private equity, or other alternatives to create a balanced SDIRA portfolio.
Yes. You can roll over or transfer funds from an existing IRA (Traditional, Roth, SEP, or SIMPLE) or even a 401(k) (from a previous employer) into an SDIRA. Once the rollover is complete, you can then invest those funds into the SWIM Fund or other alternative assets. Always confirm eligibility and procedures with your plan administrator or custodian.
Glossary of Key Terms

Accredited Investor
An individual or entity meeting certain financial criteria—such as a net worth exceeding $1 million (excluding primary residence) or an annual income above $200,000 (or $300,000 jointly with a spouse). Accredited investors can participate in certain private offerings that are not open to the general public under SEC regulations.

Alternative Assets
Investment opportunities beyond typical publicly traded stocks and bonds. Alternative assets can include real estate, private debt funds, private equity, precious metals, and cryptocurrencies. These assets often offer unique risk and return profiles, as well as potential diversification benefits.

Custodian
A custodian is a financial institution or trustee authorized to hold and administer assets in a retirement account, such as an IRA. In a Self-Directed IRA (SDIRA), the custodian executes transactions as directed by the account holder but does not provide investment advice.

Rollover
A rollover is the process of transferring funds from one retirement plan (e.g., a 401(k)) to another retirement plan or IRA (including a Self-Directed IRA). Rollovers typically need to be completed within a specific timeframe (usually 60 days) to avoid taxes or penalties, unless it’s a direct trustee-to-trustee transfer.

Tax-Deferred
An arrangement in which investment earnings—such as interest, dividends, or capital gains—grow without being taxed until funds are withdrawn. Traditional IRAs often provide this benefit. In contrast, Roth IRAs offer tax-free distributions under qualifying conditions.

Unrelated Business Taxable Income (UBTI)
Income earned by a tax-exempt entity (like an IRA) from a business unrelated to its primary purpose. In an SDIRA context, UBTI can arise if the IRA owns a business or a property that generates certain types of income. UBTI may be subject to taxes that the IRA must pay.

Unrelated Debt-Financed Income (UDFI)
A subcategory of UBTI triggered when an IRA invests in properties or other assets using debt. A portion of the income derived from the leverage (debt-financed) portion can be taxable, even within an IRA.

Disqualified Persons
Individuals and entities that an SDIRA owner is prohibited from transacting with, as defined by the IRS. These typically include:
- The SDIRA holder
- The holder’s spouse
- Lineal ascendants and descendants (parents, grandparents, children, grandchildren)
- Entities owned or controlled by these individuals Engaging in certain transactions with disqualified persons can result in IRS penalties or IRA disqualification.

Prohibited Transactions
Specific transactions that the IRS does not allow within an SDIRA. These include:
- Self-dealing (using IRA assets for personal benefit)
- Loaning money to yourself or other disqualified persons from the SDIRA
- Leasing or using property owned by the SDIRA for personal use
Violating these rules can trigger tax consequences and penalties.

Self-Directed IRA (SDIRA)
A specialized Individual Retirement Account that grants the account holder the authority to invest in a broader range of assets than a traditional IRA. While a Self-Directed IRA still involves a custodian, the investor exercises greater control and responsibility over asset selection.
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