Trading Commodities in Retirement Accounts

With the uncertainty and ever-changing nature of the stock market, commodities trading has become much more attractive. Trading commodities in IRAs has been allowed since they were established in 1974 and there are some real benefits to both the investor and futures professionals. At Midland, we’re making it our goal to educate about alternative investments that provide diversification and, therefore, stability in retirement accounts to protect the long-term futures of our clients and readers.

Futures and forex (foreign exchange) trading accounts can be held in any type of IRA including; Traditional, Roth, SEP, SIMPLE, and Solo 401(k) plans. These plans allow individuals to save for retirement tax-free or tax-deferred and gives professionals an alternative source of funds that their clients can use.

BENEFITS FOR INVESTORS

Adding futures to a retirement planning strategy can mean investing in something the investor is familiar with, allowing them to use their knowledge and expertise to benefit their retirement. Futures also adds a dimension of diversification and can help hedge against losses in other markets.

BENEFITS FOR PROFESSIONALS

Offering the IRA investment option to your clients can help you serve your clients better because most investors aren’t aware that they can use IRAs to invest in commodities. Offering IRAs can also grow your business by doubling the number of accounts you establish per customer; personal and IRA.

WHAT DRIVES/IMPACTS THE VALUE OF COMMODITIES?

• Global and industry demand
• Political instability
• Organizations that control exports (OPEC for crude oil as an example)
• Natural disasters
• USD (can impact gold for example)
• Inflation
• Market volatility
• Weather (especially for agricultural commodities)
• Speculation

HOW TO GET STARTED (5 EASY STEPS)

Creating and funding a commodities trading account in your self-directed IRA is a relatively simple process. Many clients of Midland choose to invest their retirement funds in futures and forex with their self-directed IRA to build tax-sheltered income on the returns.

STEP 1: ESTABLISH A MIDLAND ACCOUNT

You can complete our online application or our paper application which you can fill out by hand and mail, email, or fax to our office.

STEP 2: FUND YOUR ACCOUNT

You can fund your account in 3 ways:

1. IRA to IRA Transfer
2. 401(k) or other, qualified plan via Rollover
3. Annual contribution

STEP 3: ESTABLISH A TRADING ACCOUNT WITH AN INTRODUCING BROKER

When establishing your trading account with an introducing broker, you must abide by the following guidelines:

• Select “Individual” account type
• The trading account must be titled in the name of and owned by your IRA
• If you are not trading this account yourself, you must grant a Commodity Trading Advisor (CTA) permission to trade in the account on your behalf

STEP 4: SEND MIDLAND YOUR COMPLETED TRADING AGREEMENT

Send Midland the completed trading agreement with your desired trading company as well as your CTA agreement if applicable. Midland will countersign the trading agreement to build this account within your IRA. A trading account number will be created within a few business days.

STEP 5: FUNDING

In your Midland360 online client portal, you can grant permission for Midland to facilitate your funding. For investment amounts over $100,000, a manual purchase form is required and completed with a phone call. Midland will also call to verbally confirm your approval to fund the investment into the trading account. Funds will go out the next business day via wire.

If you have any questions regarding trading commodities in an IRA or need help getting started, please contact Midland by calling us at (239) 333-1032 or visit our website at www.midlandtrust.com and chat with one of our professionals.

MIDLAND TRUST IS NOT A FIDUCIARY: Midland’s role as the custodian of self-directed retirement accounts is non-discretionary and/or administrative in nature. The account holder or his/her authorized representative must direct all investment transactions and choose the investment(s) for the account. Midland has no responsibility or involvement in selecting or evaluating any investment. Nothing contained herein shall be construed as investment, legal, tax, or financial advice or as a guarantee, endorsement, or certification of any investments.