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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 →
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 →
For those of you who have your own self-employed businesses that does not employ any other individual (other than potentially your spouse), keep in mind for your retirement contribution plans that the 401K is not your father’s 401K. Well, actually, it kind of is, as the IRS doesn’t differentiate between a 401K plan sponsored by an employer with employees vs….read more →
Well, before you think that this is going to be really boring….and it very well may be….let’s define what EGTRRA is and why it is your friend. EGTRRA is the acronym for the Economic Growth and Tax Relief Reconciliation Act, and was established in 2001. Quite simply, EGTRRA defined and permitted the self-employed individual the ability to participate in a 401K…read more →
Well, yes and no. So, let’s explain. In the eyes of the IRS, a 401K is a 401K. There is probably no where in the IRS code where you will see any reference to Self-Directed 401Ks, Solo Ks, I-Ks and so on and so on. All those terms are more marketing driven than actual IRS terms. However, the IRS does…read more →
