If your retirement garden — specifically your individual retirement account or IRA — hasn't been growing fast enough to meet your future retirement needs, you might want to join a club of contrarians: those who have decided to take matters into their own hands. Literally.

Self-directed IRAs are billed as "putting the 'I' back in IRA." They let individuals determine what, when and where to invest their retirement money. And they are catching on — in no small part thanks to the stock market's volatility and the real estate market's recent riches.

Real estate has always been permitted in IRAs, but few people know about this option. Financial institutions — mutual funds, stock brokerages, banks — are typically where IRAs are held. But investments in other things, most notably real estate, are fully permissible under the Employee Retirement Income Security Act of 1974. It prohibits retirement plans from investing in just two types of investments — life insurance contracts and collectibles. Everything else is fair game.

But ERISA or no, the other thing standing in your way may be your employer. If your IRA is held in a company plan through your job, the plan's guidelines may specify what type of investments can be made — and real estate is rarely among them. If this is the case, establishing a self-directed IRA isn't an option until you and your employer part ways. Once you leave, no matter the reason, you can roll over the funds in your IRA and 401(k) to a self-directed IRA.

It is estimated that only about 4 percent of America's retirement funds are held in nontraditional accounts, including IRAs invested in real estate. But the trend, experts agree, is toward more money being funneled into these little-known, little-used, self-directed IRAs.

Although investors use self-directed IRAs for a variety of investments, among nontraditional accounts, real estate is by far the most popular.

It certainly was the motivation for Anthony Moreno, 56, of Oceanside, Calif., to establish his self-directed IRA.

Moreno retired in July 2005 after working more than 24 years as a nuclear computer technician at San Onofre Nuclear Generating Station. When he left Southern California Edison's employment, he initially left his pension and 401(k) with the company — primarily because he didn't know what else to do with it, he said. But concerns about a low rate of return and a lifelong desire to own international real estate led him to research self-directed IRAs with the idea of putting his money into real estate. Opening one simply made sense for him, he said.

Now Moreno is in escrow on a pristine 68-acre private island 300 yards off Roatan Island in the Caribbean Honduras. It was listed at $850,000, and he plans to develop a day resort on it, ferrying cruise-ship passengers by private speedboat to his island. Carnival Cruise Line is building a $50 million terminal at Roatan Island that will be able to accommodate two mega-ships and 7,000 passengers a day, and Moreno plans to tap into this burgeoning tourist market.

Moreno's self-directed IRA was set up by Guidant Financial Group, which specializes in facilitating real estate investments using an IRA.

"I don't see it as gambling," Moreno said of investing his retirement funds in this venture, although he acknowledges that "conventional thinking would probably view this as very risky for someone of my age" and that "there are many 'safer' investments which I could have chosen." But, he added, none of those other investments had "the potential for making my dreams come true."

"I don't know of anybody who ever realized a dream by allowing their fears to prevent them from giving it their best shot. Regardless of the outcome, I will never regret going for my dream. If I hadn't tried, I would have always wondered: What might have been?"

As romantic as the idea of buying your own island sounds, many caution that real estate purchases made through self-directed IRAs aren't the answer to everyone's investment goals. Experts, such as Jeff Nabler of the IRA Association of America, strongly urge people to consult a professional adviser before moving their money into one.

For one thing, the tax laws concerning self-directed IRAs are complicated — and likely beyond a layman's interpretation. Mistakes can be costly; early withdrawal penalties may be imposed if funds are misused.

The Internal Revenue Code 4975 defines what are prohibited transactions for IRAs, said David Nilssen, chief executive of Guidant Financial Group, a Washington-based company that he says is rolling over about 200 accounts each month. Basically, any investment the IRA participates in must be for the exclusive benefit of the IRA, Nilssen said.

In the past seven years, Nilssen said, the self-directed IRA industry has "exploded." Before 2000, "investors couldn't justify leaving the stock market because it was performing too well," Nilssen said. "The industry has more than doubled since that time."

Self-directed IRAs can produce great returns, Nilssen said, but there are specific guidelines an investor must adhere to. "This is why we recommend that people not try to structure these investments themselves without the help of a qualified professional."