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Many times people will call and ask the following: 1) “What is a Traditional IRA?” 2) “What is a Roth IRA?” 3) “Can I Self-Direct”? Typically, they have done some online research and realized that they may be able to self-direct the assets within their IRA or 401K. However, while these folks have clicked endless online links as to why…read more →
People inquire frequently on what is the difference between all the self-directed 401K plans they see advertised on the internet. When they see different “named” type of plans, they naturally assume there is a difference. Research the topic on any given day and you will see references to: My 401K Plan Self-Directed 401K Self-Administered 401K IK I401K IPlans SoloK and…read more →
There is a saying that goes something like, “with great freedom comes great responsibility.” This statement, when applied to IRAs in general, and self-directed IRAs in particular, couldn’t ring more true. It may not be a question of “how to be self-directed”, but rather IF you should be self-directed. Why? The penalties associated with triggering an IRS Prohibited Transaction within…read more →
The conversation of ERISA….and whether a self-directed 401K plan falls under its mandate…comes up a few times a year. However, strangely enough, when people inquire as to whether a self-directed 401K plan falls under ERISA, they have typically been informed by financial professionals, CPAs or attorneys that their plan MUST comply with ERISA. This creates the impression with the prospective…read more →
Most people probably do not know what ERISA actually is and, if you are serving as the Trustee of your self-directed 401K plan, you hopefully won’t need to fully understand ERISA. However, if one is involved in any 401K plan, it is vitally important that you have a basic understanding of ERISA so you KNOW whether it applies to you…read more →
Many people who have established self-directed IRA and 401K plans are always cautioned about maintaining strict compliance with IRS Prohibited Transactions. One might always want to consider such prohibited transactions similar to the IRS’ 10 commandments. However, before even starting with investing from their plan, there is a very key issue for many people that, if not careful, may present…read more →
Many promoters of self-directed plans extol the benefits of one bank account for the 401K plan. While this is certainly permitted with your plan, wouldn’t it be attractive to have an account that literally will let you purchase both traditional and non-traditional assets all from one account?! I use the $1M example….let’s say as the trustee of the plan you…read more →
As with any 401K plan, there are many requirements that must be followed in the establishment of the plan. One of these requirements is for the identification of a plan trustee. The trustee’s responsibilities are unique and serious in nature as that individual(s) is responsible for the investments of the assets of the plan. It is a role that has…read more →
Just like any 401K plan, you may now wish to fund your plan and maximize it to the highest potential possible. Of course, you always have and, should exercise, the option of funding your plan with contributions….both employee deferrals and profit share contributions. But, you have other options available to you, should you desire, get fund your plan as much…read more →
I often receive many inquiries related to loans permitted from a qualified plan, such as a 401K plan, but also including 403(b) and 457 plans. I always advise that while loan provisions are an attractive feature to a 401K, including a self-directed 401K, it is only my job to educate on what is permissible, and not that they should exercise…read more →
