If you’re thinking about getting a retirement plan, your first step is to decide which particular plan to choose. For the record, you don’t have to be a rocket scientist to know that the self-directed IRA is the best possible option out there. It’s incredibly safe to keep funds inside a self-directed IRA because such an account is not only permitted, but encouraged by the government. It cannot be safer where there is a guarantee from the government. However, where there is money, there are scammers. You’d have to exercise common sense when using a self-directed IRA, just as you would when using your credit card at a grocery store checkout.

There has been a sharp rise in the number of reports and complaints of fraudulent schemes taking advantage of the self-directed IRA mechanism. The Securities and Exchange Commission (SEC) has uncovered numerous cases in which corrupt promoters of fraudulent schemes lure unsuspecting investors into self-directed IRAs.

Since self-directed IRAs are a safe and probably the most efficient way to save for retirement, investors should never let their guard down because all that glitters is not gold. Before proceeding to transfer funds to a custodian, you should verify your qualification so as not to get caught in their network. Always check with an unbiased source to see if the custodian is in fact licensed. A good place to check for this information is with the SEC or your state securities regulator.

If someone tells you about a great unsolicited investment offer, take a step back and ask yourself, “Why would someone talk about a great investment opportunity?” Ask yourself this question even if the person who told you about the offer is a friend, coworker, or family member.

Keep in mind that no matter what you are investing in, there is always some risk, no matter how small the amount. The higher the risk, the more you win if you succeed: it’s like gambling. One of the best weapons scammers have to lure innocent people into fraudulent schemes is “guaranteed returns.” This sentence should be a big red flag because there can never be a guarantee to make an investment. Scammers often request funds from a self-directed IRA as one of the terms of the investment.

Scammers often target financially well-off people who are willing to take big risks in exchange for high returns. So if you think you are lucky enough to fall into that category, you should be careful because the next scammer could be just around the corner.

Whenever in doubt, do not hesitate to contact a financial expert.