Self-Directed IRA and 401(k)s — Non-Traditional Assets

You have done some research on various websites related to self-direction.  It doesn’t matter whether it is a self-directed SEP-IRA, Roth IRA, Traditional IRA or SIMPLE IRA.  Or if it is a 401(k) plan, which is also marketed as Uni-K, Solo-K, self-directed  401(k) and self-administered 401(k), one basic tenet is still in play…they can all be self-directed.  In learning more about this powerful tool, you have seen references to “non-traditional” and “alternative” assets, amongst others.  Is there any difference between the two terms?

Quite simply, no.  But, this definition of either term has changed and evolved over time.

What are Non-Traditional Assets?

If you went back 100 years or so, the definition of non-traditional assets were probably somewhat narrowly defined to such assets as gold, silver, gems, stamps and coins.  However, over time, this definition has evolved into a much wider array of assets.

Today, however, most individuals now define non-traditional assets to include almost any asset other than stocks, bonds and mutual funds.

The IRS does not stipulate a difference in asset definition between the two terms.  Further, they do not define what assets a retirement plan can invest into, rather what investments cannot be made with your retirement plan.

Enjoy the flexibility that you will have with your self-directed IRA or Solo 401(k).  Invest in assets that comply with the tax code, but also give you the ability to invest as you see fit in a world of endless investment opportunities.  No more being limited and confined to only what your broker recommends.

As always, the information is intended to be educational in nature.  It is not intended, nor should it be interpreted as, any form of tax, legal, financial or investment advice.  You must always consult with your respective professional in all such matters.