Take Control of Your Retirement with a Self-Directed 401(k)

Invest beyond Wall Street (Stocks and mutual funds)-unlock the freedom to build wealth through real estate, startups, and other alternative assets.

What is a
Self-Directed 401(k) / Solo 401(k)

A Self-Directed 401(k)-also known as a Solo 401(k), is a powerful retirement plan designed for self-employed individuals or small business owners with no full-time employees (other than a spouse). It’s a retirement account that gives you full control over your investment choices. Unlike traditional 401(k) plans, which limit you to stocks, bonds, and mutual funds pre-selected by your employer or financial advisor, a Self-Directed 401(k) allows you to diversify beyond Wall Street and invest in what you know best-whether that’s real estate, private businesses, precious metals, or other alternative assets.

Do You Really Have Control Over Your Retirement?

Paying high fees to conventional providers that eat into your savings?
Frustrated by limited investment choices in your 401(k)?
Feeling like you have no real control over your retirement funds?
Worried about market volatility wiping out your hard-earned savings?
Paying high fees to conventional providers that eat into your savings?

Did you answer yes to any of the questions above? Then, a Self-Directed 401(k) is your solution.

With full control over your investments, lower fees, and the flexibility to diversify beyond traditional stocks and bonds, you can build the retirement you want-on your terms.

Eligibility Criteria

To open a self-directed 401(k), you must have some self-employed taxable compensation during the current financial year.
You, and not an employer, are responsible for your income. Small business owners without employees (though spouses can contribute if they work for the business), Sole proprietors, freelancers, and independent contractors, normally meets this requirement.
You must have earned income that is verified through tax records.

How Does it Work?

Getting started is simple. Here’s how a Self-Directed 401(k) works—step by step.

Learn How to Apply Let’s Get Started

1
Check Eligibility

You must be self-employed or own a small business with no full-time employees (except a spouse).
2
Set Up Your Plan

We help you create your Solo 401(k) and open the holding account.
3
Add Funds

Fund your plan through new contributions, rollovers/transfers, or both.
4
Start Investing

Use your 401(k) to invest in real estate, crypto, private businesses, and more.

How to Fund Your Account?

You can fund your self-directed 401(k) in 3 ways: rollovers/transfers, personal deferrals (contributions), and profit-sharing are the primary funding sources.

Rollover Transfers

an individual can transfer previous 401(k) funds, SEP IRA funds, SIMPLE IRA funds, and Traditional IRA funds – in fact, any previous “qualified” funds. Roth IRA funds cannot be transferred.
Contribution Limits

Personal deferrals are determined by age. If a client is under 50, they can have a personal deferral of 100% of their self-employed income up to $23,500 for 2025.

For catch-up contributions, which are available to anyone over the age of 50, the limit is an additional $7,500 for 2025, bringing the total contribution limit to $31,000.
Profit-Sharing

The self-directed 401(k) plans we establish are also PSPs or profit-sharing plans. IRS publication 560 establishes the amount of profit-sharing allowed and includes a step-by-step worksheet. In general terms, profit-sharing can be up to 20% to 25% of the sponsoring entities’ profit.

IRS Rules

While Self-Directed 401(k) plans (also known as Solo 401(k)s for the self-employed) offer greater investment flexibility, they must comply with IRS rules to maintain their tax-advantaged status. Understanding these rules is critical to avoid penalties and disqualification.

Prohibited Transactions

Engaging in certain activities between your Self-Directed 401(k) and disqualified persons can trigger serious tax consequences. Prohibited transactions include:

1. Self-Dealing (Engaging in a Transaction with a Disqualified Person)

Using plan assets for your own benefit, such as purchasing property you or your family use personally.

Examples

Plan participant buys a property and charges a management fee.
Plan participant “fixes” a property himself instead of hiring a third-party contractor.
Plan participant receives a commission for selling a property to the plan.
Using plan-owned property as collateral for a personal loan (mentioned in your other source).
Living in or vacationing at real estate owned by the 401(k).

2. Indirect Benefits (Receiving Direct or Indirect Benefits of the Plan)

Structuring investments that benefit a disqualified person, even if the transaction is not directly with them.

Examples

Plan participant buys a condo and lets daughter live there.
Plan participant buys part of a business owned by his father.

3. Extension of Credit (Direct or Indirect Lending of Money)

Lending money to or borrowing from the 401(k), or using it as loan collateral.

Examples

Plan participant loans money to his wife or son.
Father signs a loan guarantee for the Solo 401(k) Plan.

Disqualified Persons

Under IRS rules (IRC Section 4975), certain people and entities are prohibited from transacting with your plan, including:

You, as the account holder.
Your spouse.
Your lineal ascendants and descendants (parents, grandparents, children, grandchildren), and their spouses.
Any fiduciary or service provider to the plan.
Entities (like LLCs or corporations) where you or disqualified persons have a 50% or greater interest.

Investment Restrictions

Self-Directed 401(k)s allow a wide range of investment options, but a few are not permitted:

Collectibles: Including artwork, antiques, rugs, alcoholic beverages, gems, stamps, and most coins.
Life Insurance Policies: Cannot be held inside a 401(k).
S Corporations: A Self-Directed 401(k) cannot own shares in an S Corp due to IRS shareholder restrictions.

Plan Requirements

Must have a written plan document and EIN (Employer Identification Number).
You are both the employer and employee, which affects how contributions are calculated.
If plan assets exceed $250,000, an annual filing of Form 5500-EZ is required.

Withdrawal Rules

The withdrawal rules for a Self-Directed 401(k) are similar to traditional 401(k)s, but it's important to understand them to avoid penalties. Here are the key points:

Standard withdrawals

Must be 59½ or older to withdraw without penalties
Required Minimum Distributions (RMDs) start at age 73 (as of 2025)
Withdrawals are taxed as ordinary income

Early withdrawals before 59½

Generally subject to 10% penalty plus taxes
Exceptions exist for:
- Financial hardship
- Disability
- Death
- QDRO (divorce settlements)
- First-time home purchase (up to $10k)

Loan options

Can borrow up to 50% of account value or $50,000 (whichever is less)
Must repay within 5 years (except for primary residence, 15 years)
Payments must be made quarterly at minimum

Rollovers

Rollovers to a
Self-Directed 401(k)

Yes, you can roll over funds from other retirement accounts into a Self-Directed 401(k). The process depends on the type of account you’re transferring from:

401(k) or 403(b)

Eligible for rollover if you’ve left your employer
Traditional IRA

Can be directly transferred
SEP IRA

Eligible for full transfer into your Self-Directed 401(k)
Roth IRA

Can be rolled over while keeping its tax-free growth benefits (note: consult a tax advisor for specifics)

Rolling funds into a Self-Directed 401(k) gives you greater investment flexibility—allowing you to explore alternative assets beyond traditional stocks and bonds, such as real estate, private businesses, cryptocurrency, and more. When done properly, rollovers can be a tax-efficient way to realign your retirement strategy without giving up control over your investment choices.

Rollovers from a
Self-Directed 401(k)

You can also roll over funds out of your Self-Directed 401(k) into another retirement account, like an IRA. Here’s how it works:

60-Day Rule

Once you withdraw funds, you have 60 days to complete the rollover to avoid taxes.
Direct Rollover

To avoid penalties, it’s best to move funds directly from one account to another-your custodian or brokerage can help with this.

Benefits of Self-Directed 401k

Who Is a Self-Directed 401(k) For?

Designed for self-employed individuals and owner-only businesses, a Self-Directed 401(k) offers tax advantages, high contribution limits, and full investment control. It’s ideal for:

Where Are You on Your Retirement Journey?

Just Starting Your Journey

You’re probably feeling overwhelmed by retirement options and unsure where to start?

You have no prior retirement account experience and need clarity on how to secure your financial future.

Where You Are Now

Your Biggest Hesitations

Ready to Take Control

You’re frustrated by limited investment options and lack of control over your retirement.

You already have savings but feel stuck in traditional plans that don’t align with your financial goals.

Where You Are Now

Your Biggest Hesitations

Expanding Your Portfolio

You’re already investing but looking for smarter ways to maximize returns.

You’re a seasoned investor who wants greater diversification and more advanced strategies for building long-term wealth.

Where You Are Now

Have experience investing in stocks, real estate, or other assets
Want to leverage tax advantages to optimize wealth-building
Seeking greater investment flexibility with checkbook control
Interested in alternative investments like private lending or venture capital

Your Biggest Hesitations

Concerned about balancing risk across multiple asset classes
Need clarity on advanced tax strategies for high-net-worth investors
Unsure how to scale your portfolio while maintaining compliance
Looking for the right tools to manage investments efficiently

Discover How Some of Our clients Have Quadrupled Their Retirement Savings

Rick knows his stuff when it comes to Self Directed IRAs and 401(k)s… He set one up for me and I am now earning a better than average return on my investment.

Patti Sampson

West USA Realty, Phoenix, AZ.

5.0

Rating

Rick is the one to go to when you need to look towards the future. Very adept in his field, he is willing to sit down with everyone and show them options to get where they want to go.

Terrence Young

BMO Harris Bank, Phoenix, AZ.

5.0

Rating

Rick has worked with over 50 of my clients and helped them become independent of their broker by investing in real estate, gold, loans. etc. He is very knowledgeable of the self directed retirement plan industry.

Patrick Thatcher

CPA at PATRICK THATCHER CPA PC.

5.0

Rating

Well I’ve got all my 401K rolled over into my new Solo 401k. Now what 🙂 Just kidding. Thank you for making the process so simple…

Roslyn Neal

5.0

Rating

Creating a self-directed 401K using your company is the best thing I could have done for my retirement. Instead of mutual funds achieving low single digit returns, I have enjoyed 2 and 3x returns on real estate investments. Thanks for the ongoing advice!

Marco Rodriguez

5.0

Rating

The solo 401K we set up four years ago is working great, advancing me toward retirement quicker than expected.As always, appreciate your prompt response to answering my questions and helping me to prepare for a better future.

Edwin Roark

5.0

Rating

In four years, I’ve been able to double my IRA value. I would not have gone down this path if I didn’t have the guidance of Rick.

James Alan Hoffman

President at MARIN TIPS.

5.0

Rating

What are Your Investments Options

Self-directed solutions put you in the drivers seat by letting you choose what you want to invest in.

Real Estate
Foreclosure Property
Private Equity
Small Businesses & Startups
Raw Land
Self Storage
Precious Metals
LLPs & LLCs
Hard Money Lending
Factoring Your Own Receivables
Private Placements
Cryptocurrency
Peer to Peer Lending
Water Rights
Mortgage & Mortgage Pools
Tax Liens
and more...

Your Retirement Strategy Should Fit Your Life, Not the Other Way Around

Whether you’re into real estate, private ventures, or alternative assets, your Solo 401(k) should work for you. We’ll help you set it up – quickly, easily, and with full control.

Frequently Asked Questions

What's the difference between Traditional Employer 401k and Self-Directed 401(k)s?

While both offer tax-deferred retirement savings, a Self-Directed 401(k) gives you greater investment flexibility and direct control. Unlike traditional employer 401(k)s, which are limited to stocks, bonds, and mutual funds, self-directed plans allow investments in real estate, private businesses, precious metals, and more. This opens up higher return potential through alternative assets-provided you follow IRS rules on prohibited transactions.

What is the difference between an individual 401(k), solo 401k and a self-directed 401(k)?

Let me clarify these terms as they’re often used interchangeably but have some important distinctions:

A Solo 401(k) and Individual 401(k) are actually the same thing – just different names for a retirement plan designed specifically for:

A Self-Directed 401(k) refers to the investment control aspect of your retirement account. It gives you the power to choose alternative investments like:

Here’s the key difference: While all Self-Directed 401(k)s can be Solo/Individual 401(k)s, not all Solo/Individual 401(k)s are self-directed. Many traditional Solo 401(k)s still limit you to conventional investments like mutual funds and stocks.

Think of it like driving a car. A Solo/Individual 401(k) is like having your own vehicle (personal retirement plan). Making it self-directed is like having full control of where you can drive that vehicle – not just on highways, but also off-road adventures (alternative investments).

Can I roll over my existing retirement accounts?

Yes. Most qualified retirement accounts can be rolled over into a Self-Directed 401(k), including:

When done properly as a direct rollover, the process is tax-free and penalty-free. However, Roth IRAs cannot be rolled over into a Self-Directed 401(k). Be sure to follow IRS rollover rules or consult a tax advisor to avoid unintended taxes or penalties.

When should I establish and fund my self-directed 401k plan?

The best time to establish your self-directed 401(k) is when you have qualifying self-employment income or business ownership. Ideally, set it up before December 31st to make contributions for that tax year.

What are the tax implications of a Self-directed 401(k) plan?

What types of retirement accounts can be moved into Self-Directed accounts?

Traditional IRAs
SEP IRAs
Roth IRAs
SIMPLE IRAs (after 2 years)
Previous employer 401(k)s
403(b)s
Government 457 plans
Coverdell Education Savings (ESA)
Qualified Annuities
Profit Sharing Plans
Money Purchase Plans
Keoghs

How do I get checkbook control of a Self-Directed 401(k)?

Getting checkbook control of your Self-Directed 401(k) is simpler than you might think. It starts with setting up the right legal and financial structure-so you can maintain direct control over your retirement investments, without needing custodian approval for every transaction.

Here’s how it works:

Establish a qualified business entity (if you don’t already have one)
Set up your Self-Directed 401(k) plan with a compliant provider
Create an LLC that is owned by your 401(k)
Open a business checking account in the LLC’s name
Fund the account via rollover or annual contributions

Once these steps are complete, checkbook control gives you the ability to write checks or send wires directly from the 401(k)-owned LLC-enabling fast, flexible investing into assets like real estate, private deals, or alternative opportunities.

What makes checkbook control possible:

Can I transfer funds from a 401(K), IRA, Sep IRA, Roth IRA, or 403b and direct investments myself?

Yes, you can transfer funds from those retirement accounts into a self-directed account and take control of your investment choices! The process varies slightly depending on the type of account you’re transferring from.

Here’s a quick breakdown:

The key is structuring the transfer correctly to avoid any taxes or penalties.

Can I buy a business with my Self-Directed 401(k) Plan?

Yes, you can buy a business with your Self-Directed 401(k)! This is actually one of the most powerful ways to leverage your retirement funds for potentially higher returns. However, we need to ensure it’s structured correctly to avoid prohibited transactions.

Key considerations when buying a business with your SD401(k):

1. The business must be an arms-length transaction

2. Business Structure Options

3. Due Diligence Requirements

I have a 401(k) with an old employer. Can I move it into the Self-Directed 401(k) Plan?

Yes, you can absolutely roll over your old employer 401(k) into a Self-Directed 401(k)! This is actually one of the most common ways people fund their self-directed accounts to take control of their retirement investments.

The rollover process is straightforward:

Before we proceed, let me ask a few key questions to ensure we structure this optimally:

Can I use my self-directed 401(k) to buy a house?

Before I can provide a complete answer, I need to understand a few key details about the property purchase:

The reason I ask is that using a Self-Directed 401(k) to buy real estate comes with specific IRS rules and restrictions:

You cannot purchase a property for personal use, (*but you CAN borrow funds to purchase a primary residence and have up to 15 years to pay it back, with interest. )
The property must be strictly for investment purposes
All expenses and income must flow through the 401(k)
No personal benefit or self-dealing allowed

If this is for investment purposes, here’s how it typically works:

What are prohibited transactions in a Self-Directed 401(k)?

A prohibited transaction occurs when your retirement plan interacts with “disqualified persons” (you, your spouse, parents, children, etc.). Common examples include:

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Take Control of Your Retirement with a Self-Directed 401(k)

What is a Self-Directed 401(k) / Solo 401(k)

Do You Really Have Control Over Your Retirement?

Did you answer yes to any of the questions above? Then, a Self-Directed 401(k) is your solution.

Eligibility Criteria

How Does it Work?

Check Eligibility

Set Up Your Plan

Add Funds

Start Investing

How to Fund Your Account?

Rollover Transfers

Contribution Limits

Profit-Sharing

IRS Rules

Prohibited Transactions

1. Self-Dealing (Engaging in a Transaction with a Disqualified Person)

2. Indirect Benefits (Receiving Direct or Indirect Benefits of the Plan)

3. Extension of Credit (Direct or Indirect Lending of Money)

Disqualified Persons

Investment Restrictions

Plan Requirements

Withdrawal Rules

Standard withdrawals

Early withdrawals before 59½

Loan options

Rollovers

Rollovers to a Self-Directed 401(k)

401(k) or 403(b)

Traditional IRA

SEP IRA

Roth IRA

Rollovers from a Self-Directed 401(k)

60-Day Rule

Direct Rollover

Benefits of Self-Directed 401k

Who Is a Self-Directed 401(k) For?

Self-Employed Professionals

Small Business Owners & Sole Proprietors

Single-Member LLCs & Independent Contractors

Real Estate Investors

Entrepreneurs & High-Income Earners

Where Are You on Your Retirement Journey?

Just Starting Your Journey

Where You Are Now

Your Biggest Hesitations

We simplify the process and guide you every step of the way.

Ready to Take Control

Where You Are Now

Your Biggest Hesitations

We help you transition seamlessly and take full control of your retirement future.

Expanding Your Portfolio

Where You Are Now

Your Biggest Hesitations

We provide the tools and flexibility to maximize your investments with confidence.

Discover How Some of Our clients Have Quadrupled Their Retirement Savings

Patti Sampson

Terrence Young

Patrick Thatcher

Roslyn Neal

Marco Rodriguez

Edwin Roark

What is a
Self-Directed 401(k) / Solo 401(k)

Rollovers to a
Self-Directed 401(k)

Rollovers from a
Self-Directed 401(k)

Real Estate
Investors