Reviews

Alto IRA: How It Works, Pros, Cons, Fees & More (2021)

Alto IRA Review
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Alto IRA is a self directed IRA custodian. In this comprehensive Alto IRA review, we’ll cover:

  • What to expect when signing up and investing with Alto IRA.
  • What we really like about Alto (and what we don’t).
  • Alternatives to Alto IRA.
  • How to decide if Alto IRA is right for you.
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Alto IRA offers a low-cost and efficient way to invest in alternative assets like real estate, cryptocurrency and startups through a self-directed IRA. Fees are low compared to the other self-directed IRA custodians we’ve evaluated, and the ability to bring your own investments to the platform — in addition to their 50+ partnerships, such as crypto investing via Coinbase — makes it a solid choice for advanced investors who are looking to diversify their retirement funds.

Pros:
  • Traditional, Roth and SEP IRAs are available.
  • Private investment option allows you to bring your own deals to Alto.
  • A (mostly) flat fee structure benefits larger investors.
  • Low fees compared to industry average.
Cons:
  • With crypto, you do not hold your private keys.
  • No stocks or ETFs.
  • No solo 401(k).

What Is Alto IRA?

Alto IRA is a self directed IRA custodian that gives you the ability to invest in a wider range of assets within your IRA compared to most brokers. 

While self-directed IRAs have been around since the 1970s (mainly as a vehicle for real estate investors), companies like Alto IRA have recently launched to meet the demand from individuals who want to invest in cryptocurrency, startups and other alternative assets within their retirement accounts.

Alto IRA itself does not offer investment vehicles. Instead, it provides access to a number of investment options offered by third parties.

How Alto IRA Works

Alto IRA offers two different types of accounts:

  1. The Alternative IRA. This type of account gives you access to Alto IRA’s list of 50+ partners, which includes managed crypto funds, private equity, venture capital funds, crowdfunded real estate platforms and more. In addition, you can also bring your own private deals to Alto, such as real estate investments.
  2. Alto CryptoIRA. This type of account is needed if you plan on investing in cryptocurrency outside of a fund. With this plan, crypto is bought, sold and held at Coinbase.

Alto investors can choose one or both of the Alternative IRA or Alto CryptoIRA plans, though a fee is required for each account (more on fees here).

You can choose to transfer existing IRA funds or contribute cash to fund your account, keeping in mind that you’re subject to the annual contribution limit (a maximum of $6,000 annually) when contributing cash.

The Alternative IRA

The Alternative IRA allows you to invest IRA funds with a wide range of partners. Investment minimums vary from partner to partner, and in many cases you need accredited investor status.

There are two types of Alternative IRA accounts:

  1. Starter: Invest exclusively through Alto IRA’s list of partners.
  2. Pro: Allows you to bring your own investments to Alto IRA, in addition to leveraging Alto’s partners.

Some of the categories of partner Alto IRA gives you access to include:

  • Art.
  • Farmland.
  • Private companies.
  • Real estate.
  • Startups.

Each partner has its own minimum investment and fee structure.

Popular names on the list include:

One notable exclusion is equities. For those looking to maintain a large allocation in stocks, such as an index fund, it would be necessary to have another IRA account at a traditional brokerage. 

Here’s a full list of Alto IRA’s investment partners.

Alto CryptoIRA

An Alto CryptoIRA account allows you to invest in cryptocurrencies of your choice, within the scope of those offered on the platform.

How it works is that you’re investing, through Alto’s interface, in crypto offered on Coinbase. In other words, you’re not opening a Coinbase account yourself, but instead investing via Coinbase through your Alto IRA.

The cryptocurrency you buy is held in a digital wallet at Coinbase. You do not get access to this wallet, and therefore cannot stake, transfer or earn interest on your crypto holdings.

Alto IRA Fee Structure

Alto IRA has a fairly complicated fee structure. 

First, there’s a flat monthly fee depending on the type of account you open.

Alternative IRA StarterAlternative IRA ProCryptoIRA
$10 per month$25 per month$2 to $25 per month

The CryptoIRA fee is based on account size. Overall, it comes out to 1% per year (0.083% monthly), with a minimum of $2 per month and a maximum of $25 per month.

Next, there are fees per individual investment or transaction.

Alternative IRA StarterAlternative IRA ProCryptoIRA
$10 to $50$10 to $501.5% trading fee

If you want to bring your own private investments to Alto IRA, there’s a $75 fee per investment.

Keep in mind, when investing through a partner, you’re also subject to that partner’s fees. 

For example, the fees for investing through EquityMultiple range from .5% to 1.5%. You may not see this fee because it’s subtracted from your total returns, but you’re still paying it! 

In other words, make sure you understand the fees associated with leveraging each individual provider

Alto IRA Alternatives

Two Alto IRA competitors are Choice IRA by Kingdom Trust and Rocket Dollar.

Choice IRA vs. Alto IRA

Choice IRA is an option for those looking to invest in cryptocurrencies within their IRAs.

The main differences between Choice and Alto IRA are:

  1. Choice allows you to trade crypto on its platform through Kraken, which has far more options than Coinbase.
  2. Choice has a free plan (although it’s not covered by insurance).
  3. Choice gives you the option to hold your private keys or use a cold storage provider for a 1% annual fee.
  4. You can also invest in individual stocks through Interactive Brokers.

Learn more in our comprehensive Choice IRA by Kingdom Trust review.

Rocket Dollar vs. Alto IRA

Rocket Dollar is best viewed as an option if you’re specifically looking to invest in asset classes like private companies and startups.

Rocket Dollar is much different from Alto IRA in that you create an LLC, which then holds your assets. This allows you to invest in essentially anything, except for asset types that are prohibited in a retirement account (similar to how Alto IRA allows you to bring private investment deals).

One major advantage of Rocket Dollar over Alto IRA is that you’re allowed to make contributions from a Solo 401(k). This allows solopreneurs to contribute directly from their company into alternative investments. 

Final Thoughts on Alto IRA

Overall, Alto IRA is a good low-cost SDIRA IRA custodian that offers access to many high-quality investment options, in addition to allowing you to bring your own private investment deals to your account for a reasonable fee.

If you’re an experienced investor, it can offer additional ways to diversify tax-advantaged funds (with the obvious caveat that this of course comes with additional risk). 

Visit AltoIRA.com to learn more.

R.J. Weiss
R.J. Weiss is the founder and editor of The Ways To Wealth, a Certified Financial Planner™, husband and father of three. He's spent the last 10+ years writing about personal finance and has been featured in Forbes, Bloomberg, MSN Money, and other publications.

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