The Versatility of Self-Directed AccountsIf your retirement account is not self-directed, your options for diversification may be limited to traditional investments (i.e. The ability to choose investment opportunities means that you can diversify across different asset classes, while enjoying the benefits of self-directed investing. With Self-Directed IRAs, contributions are made with post-tax dollars, but the money grows tax-free and isn’t taxed when you take it out. Active vs Passive Investing: Which One is Right for You? When you’re investing passively, you benefit from receiving “mailbox money,” or returns that come to you with less time and effort.