IRA Alternative Investments: Complete Guide to Diversifying Beyond Stocks (2026)
Explore alternative assets for your IRA including real estate, private equity, cryptocurrency, and precious metals—plus how to choose the right option.
Key Takeaways
- 1Alternative investments can diversify your IRA beyond traditional stocks and bonds
- 2Options include real estate, private equity, cryptocurrency, precious metals, and more
- 3Each alternative has unique requirements, risks, fees, and complexity levels
- 4Self-directed IRA required for most alternatives—traditional brokerages have limited options
- 5Gold IRA is the most accessible alternative investment for the average retirement saver
What Are IRA Alternative Investments?
Alternative investments are assets outside traditional stocks, bonds, and mutual funds. A self-directed IRA (SDIRA) allows you to invest in these alternatives within your retirement account:
- Real estate (rental properties, land, commercial)
- Private equity and venture capital
- Cryptocurrency (Bitcoin, Ethereum, etc.)
- Precious metals (gold, silver, platinum, palladium)
- Private lending (promissory notes, hard money loans)
- Tax liens and tax deeds
- Businesses and franchises
- Oil and gas partnerships
What IRAs CANNOT Invest In
Despite broad flexibility, IRAs are prohibited from investing in: life insurance, collectibles (art, antiques, stamps, most coins), S-corporation stock, and any asset that personally benefits you before distribution.
Real Estate in IRA
Real estate is the most popular alternative IRA investment, offering rental income and appreciation potential:
- Types: Rental homes, apartments, commercial, land, REITs
- Requirements: Self-directed IRA custodian, sufficient funds for purchase + reserves
- Minimum: Typically $50,000+ for direct ownership
- Liquidity: Very low—months to sell property
- Complexity: High—prohibited transactions, titling, UBIT concerns
- Returns: 8-12% historically, highly variable
| Aspect | Real Estate IRA Details |
|---|---|
| Custodian Required | Self-directed IRA (Equity Trust, Entrust, etc.) |
| Minimum Investment | $50,000+ for direct ownership |
| Accredited Required? | No for direct ownership |
| Liquidity | Very Low (months to sell) |
| Complexity | High (many rules) |
| Ongoing Management | Yes (tenants, repairs) |
| UBIT Risk | Yes if financed or active |
Real Estate Rule Complexity
IRA real estate has extensive prohibited transaction rules. You cannot use the property personally, rent to family, or do repairs yourself. One mistake disqualifies your entire IRA. See our detailed guide on SDIRA real estate rules.
Private Equity in IRA
Private equity offers access to non-public companies and institutional-style returns:
- Types: Venture capital, buyouts, growth equity, fund of funds
- Requirements: Self-directed IRA + accredited investor status
- Minimum: $25,000-$250,000+ typically
- Liquidity: Extremely low—7-10 year lockups common
- Complexity: High—subscription agreements, capital calls
- Returns: Target 15-25% IRR, highly variable, many fail
| Aspect | Private Equity IRA Details |
|---|---|
| Custodian Required | Self-directed IRA allowing PE |
| Minimum Investment | $25,000-$250,000+ |
| Accredited Required? | Yes, almost always |
| Liquidity | Extremely Low (7-10 year lock) |
| Complexity | Very High |
| Ongoing Management | No (fund manages) |
| UBIT Risk | Yes if fund uses leverage |
Accredited Investor Barrier
Most PE investments require accredited investor status: $200,000+ annual income or $1,000,000+ net worth excluding home. This excludes the majority of retirement savers from quality PE opportunities.
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Cryptocurrency in IRA
Cryptocurrency IRAs allow tax-advantaged exposure to Bitcoin, Ethereum, and other digital assets:
- Types: Bitcoin, Ethereum, and major altcoins
- Requirements: Crypto IRA custodian (iTrustCapital, BitcoinIRA, etc.)
- Minimum: $1,000-$5,000 typically
- Liquidity: High—24/7 trading available
- Complexity: Moderate—custodian handles most compliance
- Returns: Highly volatile—100%+ gains or 80% losses possible
| Aspect | Cryptocurrency IRA Details |
|---|---|
| Custodian Required | Specialized crypto IRA custodian |
| Minimum Investment | $1,000-$5,000 |
| Accredited Required? | No |
| Liquidity | High (24/7 trading) |
| Complexity | Moderate |
| Ongoing Management | No |
| UBIT Risk | Generally no |
Volatility Warning
Cryptocurrency is extremely volatile. Bitcoin has experienced 80%+ drawdowns multiple times. While potential returns are high, retirement savers should carefully consider whether they can stomach seeing half their IRA value disappear temporarily.
Precious Metals in IRA
Precious metals offer inflation protection and portfolio diversification with relative simplicity:
- Types: Gold, silver, platinum, palladium (IRS-approved forms)
- Requirements: Precious metals IRA custodian, approved depository
- Minimum: $5,000-$10,000 typically
- Liquidity: High—sell at market price anytime
- Complexity: Low—custodian handles compliance
- Returns: Gold averages 7-8% long-term, excels in crises
| Aspect | Precious Metals IRA Details |
|---|---|
| Custodian Required | Gold IRA custodian (Augusta, etc.) |
| Minimum Investment | $5,000-$10,000 |
| Accredited Required? | No |
| Liquidity | High (sell anytime) |
| Complexity | Low |
| Ongoing Management | No |
| UBIT Risk | No |
Why Gold IRA Is the Most Accessible Alternative Investment
After comparing all alternative investment options, gold IRA stands out as the most practical choice for average retirement savers:
- No accredited investor requirements—unlike private equity
- Low minimums ($5,000-10,000)—vs. $50,000+ for real estate, $100,000+ for PE
- High liquidity—sell anytime at transparent market prices
- Low complexity—no prohibited transaction minefields like real estate
- No UBIT concerns—unlike leveraged real estate or PE
- Proven store of value—gold has preserved wealth for 5,000+ years
- Augusta Precious Metals offers free education and simple setup process
Frequently Asked Questions
1Do I need a self-directed IRA for alternative investments?
For most alternatives (real estate, PE, precious metals, crypto), yes. Traditional brokerages like Fidelity and Vanguard limit investments to stocks, bonds, and funds. You need a self-directed IRA custodian that allows alternative assets. Some exceptions: certain crypto investments are available through Fidelity now.
2What percentage of my IRA should be in alternative investments?
Financial advisors typically suggest 5-20% in alternatives for diversification. The exact amount depends on your risk tolerance, time horizon, and overall financial situation. Avoid putting too much in illiquid alternatives that you cannot access before retirement.
3Are alternative investments riskier than stocks?
It depends on the alternative. Private equity and cryptocurrency can be riskier than stocks. Real estate offers different risks (liquidity, management). Precious metals like gold are often considered a defensive, lower-risk diversifier. Each alternative has unique risk characteristics that should be understood before investing.
4Can I transfer my existing IRA to invest in alternatives?
Yes, you can transfer or rollover funds from an existing Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, or old 401k to a self-directed IRA that allows alternatives. This is typically tax-free if done correctly. The process takes 2-4 weeks depending on the institutions involved.
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