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Alto IRA . Review

Alto IRA is a trustee of a self-directed IRA. In this comprehensive review, we will cover:

  • What to expect when registering and investing with an Alto IRA.
  • What we like (and don’t like) about the platform.
  • Alto IRA alternatives.
  • How to decide if an Alto IRA is right for you.

The Alto IRA offers a low-cost and easy way to invest in alternative assets – such as cryptocurrency, real estate, and start-ups – through a self-directed retirement account. Fees are low compared to other self-directed IRA custodians we evaluated, as well as minimal ($10 for crypto). Alto IRA is a solid choice for advanced investors looking to diversify their retirement funds.

Positives:

  • Conventional, Roth and SEP IRAs are available.
  • The fixed fee structure benefits (mostly) larger investors.
  • Low fees compared to the industry average.
  • Staking is rolled out to a limited number of users.

Negatives:

  • You do not own your encryption keys.
  • You cannot bring your own trades to the platform.
  • There are no stocks or ETFs.
  • No solo 401(k).

What is an 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 than most brokers.

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

Alto IRA itself does not offer investment tools. Instead, it provides access to investment options offered by third parties.

How does Alto IRA work?

Alto IRAs offer two different types of accounts:

  1. Alternative IRA. This type of account gives you access to the Alto IRA’s list of 15 partners, which includes managed crypto funds, private equity, venture capital funds, publicly funded real estate platforms, and more.
  2. Alto Crypto Era. This type of account is necessary if you plan to invest in cryptocurrency out of the box. With this plan, cryptocurrencies are bought, sold and held at Coinbase.

Alto investors can choose one of the alternative IRA plans, the Alto Crypto IRA, or both, although fees are required for each account.

You can choose to transfer existing IRA funds or contribute cash to fund your account, bearing in mind that you are subject to an annual contribution limit (up to a maximum of $6000 annually) when contributing cash.

Alto Crypto Era

An Alto Crypto IRA account allows you to invest in cryptocurrencies offered on Coinbase through the Alto interface. In other words, you are not opening a Coinbase account yourself, but instead investing via Coinbase through your Alto IRA.

This allows you to invest in anything from premium crypto assets like Bitcoin and Ethereum to small coins just launched on the Coinbase platform. If it’s available on Coinbase, you can buy it inside the Alto IRA.

You can view all potential crypto investments here.

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

The fee to hold an Alto Crypto IRA is:

Account Fee: 0 dollars
nursery fee: 0 dollars
Trade fee: 1%
close account: $50
Outgoing bank transfer $25

In late 2022, Alto IRA launched a staking pilot program that provides select users with the option to staking SOL (Solana). Users who joined the beta program received a 4% return on their SOL holdings with a six-month lock-in. There was a minimum of 25 SOL required to participate.

Currently, the waiting list to join the beta staking program is closed. Alto says it hopes to offer additional coin staking opportunities in the future, and we will update this article when these opportunities become available.

Alto variant IRA

Alto 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 certified investor status.

Some of the types of partners that an Alto Alternative IRA gives you access to include:

  • art
  • Farmland
  • private companies
  • Real estate
  • Startups

Each partner has its own minimum investment and fee structure.

Common names on the list include:

One notable exception is stocks. For those looking to hold a large equity allocation, such as an index fund, it will be necessary to have another IRA at a traditional brokerage.

Additionally, it’s worth noting that Alto IRA no longer offers its own Pro plan, which allowed users to bring their own deals to the platform. As a result, the account is limited to a list of selected Alto IRA partners.

Alto Alternative IRA fee structure is as follows:

Account Fee: $10 per month or $100 per year if paid annually.
nursery fee: 0 dollars per month.
Partner investment fees: $10 per transaction.
close account: $50.
Outgoing bank transfer: $25.

Keep in mind that when investing through an Alto IRA partner, you are also subject to that partner’s fees. For example, the fee for investing through AcreTrader is 0.75% on an annual basis. This fee is on top of what you pay for an Alto IRA.

The partner investment fee of $10 per transaction also makes the account unsuitable for those brokering small dollar amounts of money on a recurring basis. In such a case, the fee of $10 per transaction will definitely erode into any potential returns. With this fee structure, you are better off calculating the average cost in dollars on a yearly or quarterly basis versus biweekly or monthly periods.

Below is a complete list of Alto IRA investment partners.

Alternatives to Alto Era

Two of the Alto IRA’s competitors are the Kingdom Trust’s Choice IRA and Rocket Dollar. You can learn more about these below, and about additional alternatives on our list of the best encrypted IRAs.

Alto IRA vs. Choice IRA

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

The main differences between Alto and Choice are:

  1. Choice allows you to trade cryptocurrencies on its platform through Kraken, which has a lot more options than Coinbase.
  2. Choice has a free plan (although it’s not covered by insurance).
  3. Choice gives you the option to keep 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.

Alto Era vs Rocket Dollar

It is best to look at Rocket Dollar as an option if you are specifically looking to invest in asset classes such as private companies and start-ups.

Rocket Dollar is very different from an Alto IRA in that you create an LLC, which then keeps your assets. This allows you to invest in basically anything, except for the types of assets that are prohibited in a retirement account.

One of the main advantages of Rocket Dollar over an Alto IRA is that you are allowed to make contributions from your single 401(k). This allows individual entrepreneurs to contribute directly from their company to alternative investments.

Learn more in our detailed Rocket Dollar review.

Alto IRA . Frequently Asked Questions

Are Alto IRAs insured?

Alto IRA is a third party that does not hold clients’ funds besides cash and does not directly provide insurance. Cash held within an Alto IRA is insured by the Federal Insurance Corporation (FDIC). Many of the partners on the platform offer some form of insurance, whether it’s through SPIC or, in the case of crypto, the Coinbase account protection program.

Who owns and operates the Alto IRA?

Alto Solutions, Inc. was founded. (d/b/a Alto IRA) in 2018 by Eric Satz, who is still the company’s CEO. In 2021, Alto raised $17 million in Series A funding. Unusual Ventures led the funding round, which included names such as Coinbase Ventures, Franklin Templeton and New York Life Ventures. In 2022, Alto raised an additional $40 million in a funding round led by Advance Venture Partners, which included Coinbase Ventures and Unusual Ventures. The company is headquartered in Nashville, Tennessee and currently has more than 15,000 customers.

Alto Crypto IRA Review: Final Verdict

Overall, the Alto IRA is a good low-cost SDIRA IRA custodian that offers access to several high-quality investment options 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 risks).

Keep in mind, with a limited history behind them, alternative asset classes shouldn’t affect a large percentage of your retirement balance — primarily because of the wide range of outcomes they can produce. Such a large scale makes it impossible to plan for retirement.

Therefore, my rule of thumb is that no more than 10% of my total net worth can be in the alternatives. I recommend setting a limit for yourself that will allow you to realistically reach your retirement goals.

Visit AltoIRA.com to find out more.

RJ Weiss

RJ Weiss is the founder and editor of The Ways To Wealth, a certified financial planner, husband and father of three. He has spent the past 10 years writing about personal finance and has appeared in Forbes, Bloomberg, MSN Money, and other publications.