Celebrating Over 21 Years of Excellent Service
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Celebrating Over 21 Years of Excellent Service

Why Choose a Self-Directed 401(k)?

Reasons for Your Self Directed 401(k) Plan

  • Total “checkbook” control – A custodian is not required with a solo
    401 k therefore there aren’t any costly custodial fees to worry about.
  • Spouses – if they participate in the sponsoring company, they can participate as well, increasing the pool of investment dollars.
  • Participants can transfer previous traditional IRAs (including SEP and Simple) and 401(K)s into the new plan.
  • Contributions, nearly 10 times the level of IRA’s. Plan participants can contribute up to $61,000 (age 50 and above) and $55,000 (under age 50).There are no income limitations as there are with IRAs.
  • Investments – You can invest in real estate, precious metal, tax liens, promissory notes, private placements and virtually anything else.
  • Leverage – Using non recourse loans, you can leverage your real estate investments and if done properly – tax free.
  • Roth Contributions – Personal contributions can be designated as Roth, because there aren’t any income limitations, this allows for high income earners to enter the Roth arena.
  • Loans – Plan participants can borrow up to $50,000 each. There is no qualifying. The monies can be used for anything you wish, cars, trips, education. When you pay back the loan, your plan is earning the interest. We provide the loan documentation and guidance.
  • Tax Free Transfer of assets to your beneficiaries is possible, not with an IRA.

What You Can Expect With Your Prototype Solo 401 k Plan

  • Adoption Agreement
  • Basic Plan Document
  • Plan Description
  • Appointment of Trustee(s)
  • Action of Board of Directors
  • Beneficiary Designation
  • Deferral Agreement
  • Loan Procedures and Loan Documentation
  • Transfer Request and/or Letter of Acceptance
  • Election not to participate
  • Newly assigned EIN (Employment Identification Number) for the plan
  • IRS Determination Letter – stating the Plan meets the requirements of a Qualified Plan

Ask Rick & Donnell