A self-directed 401(k) or Solo 401(k) is similar to a traditional 401(k) that your friends or family might invest in. The difference is that a self-directed Solo 401(k) allows you to purchase time-sensitive, alternative investments such as rental properties, tax liens, private mortgages and precious metals.
The Solo 401(k) works much the same as traditional 401(k) plans offered by large companies, as well as SEP IRAs designed for the self-employed. Unlike other retirement plans, the Solo 401(k) is strictly for sole proprietors who have no employees.
Loan Access—While an IRA offers a loan option; the Solo 401(k) allows you to borrow up to $50,000 or 50% of your account value, typically at prime interest rate, plus 1%. This feature allows individuals with a Solo 401(k) the ability to access the money for any purpose, including paying credit card debt with high interest rates or funding a business.
High Contribution Limits—The Solo 401(k) allows you to contribute up to $18,000 ($24,000 for individuals over 50) for 2015. Similar to SEP and SIMPLE IRAs, the Solo 401(k) also allows for employer contributions, maximizing your contribution limit up to $53,000 (or $59,000 for individuals over 50) for 2015.
Roth Contributions—With IRAs, those who make more money are not allowed to contribute to a Roth IRA or convert their traditional IRA into a Roth IRA. On the other hand, the Solo 401(k) has a Roth “bucket” option, allowing you to make Roth contributions ($18,000 for employees plus an additional $24,000 for individuals over 50) for 2015 without income restrictions.
Flexible Contributions—Any money that is contributed to this account can be made into an alternative investment. This means you can invest in most real estate, precious metals, private placement memorandums and more. If the account is a Roth, your earnings on these investments grow tax-free, as long as the investment stays under your Solo 401(k).
Did you know that an LLC is a structure that allows you to access money in your retirement account directly? Discover what other experts are doing with a Solo 401(k) LLC today!
Expand Your Investment Horizon
Choose and control your retirement options with the broadest range of investment opportunities possible. From real estate to private businesses, embrace the freedom that the self-directed Solo 401(k) provides.
No Middle Man Needed
After your Solo(k) has been set up and funds have been directed into the Solo 401(k) LLC, you will have the freedom to self-direct your investment into the asset of your choice!
Provident Trust Group is a simple, safe, and secure way for individuals to take control of their financial future. Once your Provident account is established, you can immediately begin the process of investing in both traditional and non-traditional opportunities such as real estate, notes, LLCs, private placements, tax liens, and more!
Our team of industry professionals provides a broad spectrum of expertise in administering our client's investment portfolios with an emphasis on security, privacy and transparency. We make IRS Code compliance our utmost priority, thereby providing our clients with peace of mind.