Solo-K Best Plan?

For the self-employed individual, there are various retirement plans that may be of interest.  There is always the question: is the Solo-K best for the self-employed individual?   We will address are some key components to the Solo-K that you should certainly consider in your selection of the Solo-K over any other type of retirement plan.

Solo-K Flexibility

Is the Solo-K best for the self-employed individual?  Consider flexibility.  Do you want flexibility with your retirement plan?  You have it with the Solo-K….you just need to elect it if you qualify for the plan as a self-employed individual.   Investment flexibility…you have it.  Not being tied to the same ol, same ol with your brokerage account.  Would you like to invest as you see fit?  You can.  And, with a Solo-K plan, the ability to invest into both traditional and non-traditional assets has never been easier.

Traditional & Non-Traditional Assets

Traditional assets are securities your plan holds through a brokerage firm account for your plan.  We know what they are…stocks, bonds and mutual funds and other securities.

Non-traditional assets can include, but are certainly not limited to, the following:

Real Estate – All forms of real estate including: Commercial Property, Residential Property, Foreclosures, Re-Hab/Flips, Developed Land, REITs, etc.

Tax Liens and Tax Deeds

Promissory Notes – All forms including Unsecured Notes, Secured Notes, Commercial Paper, Mortgages, Deeds, etc.

Other Investments – Private Equity, Factoring, Precious Metals, Equipment Rental, Currency, Bitcoin and Cryptocurrency, Businesses, Accounts Receivable, etc.

Is this Legal?

Yes, you are not limited to what your broker sells.  In fact, the IRS makes it pretty easy….they don’t tell you what assets you can invest into, rather a very short list of what you cannot invest into. Consider the following IRS statement:

“In general, a plan sponsor or plan administrator of a qualified plan who acts in a fiduciary capacity is required, in investing plan assets, to exercise the judgment that a prudent investor would use in investing for his or her own retirement.”

We’ve been Conditioned!

Wall Street has done an excellent job conditioning people that their investment options are limited to stocks, bonds and mutual funds. 

And, while on the topic of being conditioned, brokerage firms have conditioned us into believing we have true diversification in our investing with them.  But, do we?  As an example, does your brokerage firm permit your Solo-K plan to invest into rental real estate property? 

Solo-K – Bank Account?

Many individuals will open the account for their Solo-K at a local bank.  You have the freedom and flexibility as Trustee of your plan to open the account at any financial institution that will open the account…including a bank.

Advantages of utilizing a bank account for your Solo-K?

Solo-K – Brokerage Firm

Many others will open the account for their Solo-K at a brokerage firm….PGI clients included. Whether you elect Schwab, Fidelity, TD Ameritrade or E*Trade, PGI will assist you complete the account applications. If you are wanting one account that will permit you to invest into both traditional and non-traditional assets from one account, you will want to strongly consider the brokerage account option.

Is the Solo-K best for the self-employed individual?   You might think so if freedom, flexibility and the ability to invest as you see fit is important to you.  This is the time when you can have true diversification of your retirement plan and invest as you see fit. As the business owner of your business, you have this freedom as the legal Trustee of your own plan….you just need to choose to have this benefit.

As always, the information provided is intended to educate.  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.