Many baby boomers have waited till late in their respective careers to start giving a serious thought on saving money to fulfill their retirement dreams. The recent low economic activity has not provided the desired impetus to the stock markets. The stock markets have not offered returns that would lead to the dream retirement that they would like for themselves and their families. This has driven people towards what is known as alternative-asset IRAs.What is an alternative asset?Alternative or the “non-traditional” assets simply are assets that cannot be traded on large public markets. This encompasses most investments outside of mutual funds, ETFs, bonds, government securities or stocks. Alternative assets cannot be categorized into bank products that are insured by the FDIC, like certificates of deposits or savings accounts, either.They typically are illiquid investment assets, and usually offer higher earning potential than traditional investments. However, with alternative assets there is usually a high degree of risk involved.Alternative-asset IRA benefitsThe alternative-asset IRA is also known as a “self-directed IRA.” A typical alternative-asset IRA gives you the freedom to go beyond investing in stocks or mutual funds. It allows you to truly invest in the best opportunities available to you, regardless of whether that opportunity is considered ‘traditional' or ‘alternative,' all inside the same IRA account. Real estate, oil wells, royalties, tax liens, precious metals, stocks, bonds – they are all investment possibilities inside an alternative-asset IRA. With this flexibility, the potential returns generated in your IRA can be much greater.Alternative-asset IRA risksAlternative-asset IRAs offer the potential for higher returns, however, with that comes a higher degree of risk. The main risks investors face with alternative assets is that they are typically illiquid, and they are not regulated in the same way traditional investments are. This means that getting out of a bad investment can be much more difficult, and with the lack of regulation, fraud is a serious concern.In addition, there are also some alternative-asset IRA specific issues that investors need to be aware of. The laws that govern IRA investments can be quite complicated and difficult to understand. If you break one of the laws, the consequences can be very severe.Alternative-asset IRAs must also be held at an IRA custodian that allows for non-conventional asset investments. Choosing the right custodian can be difficult, as each have different strengths and weaknesses.Are there any alternatives for alternative-asset IRAs?There are several ways you can safely invest in alternative assets without opening an alternative-asset IRA. The Central Fund of Canada, for example, allows you to buy shares that are representative of proportional interest in silver and gold. Their shares typically grow in accordance with the precious metals markets.For people interested in oil and gas investments, there are royalty trusts that pay a return based on the amount of energy produced in a given area. There are also smaller oil and gas companies that generate profits in a similar manner as royalty owners. Samson Oil & Gas is one such company that has generated profits for its investors.The issue with these sort of investments is that you lose some of the control, since you are not a manager of those businesses. In addition, you will be sacrificing some of the profit potential, as the companies you invest in will have overhead expenses to pay before profits start getting paid out. Another option would be to put smaller amounts of your IRA savings into alternative-asset IRAs to spread risk out.