Advantages of a Self-Directed 401K!

You Never Thought a 401(k) Could be This Good!!

  • Full “Checkbook Control” of your 401(k) as you are your plan’s Trustee;
  • No Custodian Relationship…unlike an IRA;
  • Potential inclusion of spouse in plan provided the spouse is a legitimate participant in the business;
  • Ability to rollover ALL types of IRAs (0ther than Roth), 401Ks and most other qualified plan funds into your new plan;
  • No limitations on contributions due to income…unlike an IRA;
  • Employee/Participant contributions (i.e., Employee Deferrals) of $18,000/$18,500 (2017/2018) far exceed contribution limits for an IRA;
  • For individuals over the age of 50, an additional $6,000 in catch-up contributions;
  • Potential overall plan contributions of $60,000/$61,000 (2o17/2018);
  • The option to make both Roth and Pre-Tax contributions in the same account…definitely cannot do that with your IRA;
  • Convert Pre-Tax funds in your 401(k) to Roth…yes, you can do that;
  • Loan Ability — Yes, you just need to follow the IRS’ rules on administering a loan from your plan….there are no option for a loan in your IRA;
  • For real estate investments, no UDFI tax associated with a leveraged loan in your 401(k)…yes, UDFI and taxes occur in an IRA account that purchases real estate with leverage;
  • IRS Prohibited Transaction Penalties — Seriously, review the differences in having a PT in a 401(k) vs. an IRA….that alone should be a reason to qualify for the 401(k).