Know Your Solo 401k Providers First
Knowing which Solo 401k providers are best for you can be a confusing proposition. Since not all providers offer the same services, you want to make sure that you understand the differences between Solo 401k providers before making final decision.
Not all Solo 401k providers are the same
There are essentially three different types of Solo 401k providers to choose from. Each type offers a unique set of guidelines for retirement investing, and each one is geared toward a specific type of retirement investor.
Whether you want full control of your investments or prefer that someone else handle it for you, there is a Solo 401k option for you. In order to understand which one fits you best, you must first understand the difference between the three.
Self directed custodians
There is a Solo 401(k) offered by self-directed custodians and trust companies. This type allows the investor to put their retirement savings into an alternative investment options, such as real estate, private business, tax liens or tax deeds and more.
Some self-directed custodians include:
When choosing this type of Solo 401k, be aware that you are at the mercy of the company holding the investment. And they typically charge a wide array of fees, from account set-up to quarterly holding fees, fees per asset and so on. In addition, all investment paperwork must be submitted to the custodian for their approval before any investment purchase can be finalized.
Banks and brokerage firms
A second type of Solo 401k Provider is the banks and brokerage firms. This is a more conventional type which focuses on traditional investments such as stocks, bonds and mutual funds. A bank or brokerage firm will have substantial limitations to the plan documents, allowing you only invest in products they offer.
Some examples of this provider type are:
These providers focus on selling you their particular investments. Their Individual 401(k) is a way for them to generate additional business for themselves. There are many restrictions with their plans; most likely their plan will not offer the loan option and Roth sub-account.
Truly self-directed Solo 401k plan provider
The Truly Self-Directed Solo 401k is for those looking to be in control of their retirement investing. Unlike the previous two Solo 401k providers, a truly self-directed Solo 401(k) is structured so that you can act on behalf of your own retirement account as the trustee of the plan. You, as the investor, have full control over all the private documentation pertaining to your investments. And this allows you to bypass any transaction and holding fees that would apply.
Sense Financial is a truly self-directed Solo 401k plan provider. We establish the plan for you and maintain your plan documents. We don’t sell you any investments. Our plan features:
- Checkbook control
- Roth sub-account
- Account for spouse/partner
- Virtually unlimited investment options
- Participant loan feature
- Cost effective administration
- and more
For detailed list of the benefits, please visit: Solo 401k Advantages