Solo 401 k Plans Investments: A Comprehensive Outline
Investing is an integral part of a retirement plan. And Solo 401 k plans with checkbook control offer the widest range and greatest control over investments.
Solo 401 k plans can be used for almost all types of investments. Sense Financial Services establishes this type of plan so clients can grow and truly diversify their retirement funds. Clients can invest their funds without custodian consent, in assets from real estate to precious metals.
Real estate
According to the IRS, you can invest your retirement plan in real estate, from properties to raw land. Investing in real estate with the Solo 401 k is simple. There aren’t any confusing regulations, time-consuming or complicated paperwork.
You, as trustee of your plan, can invest in real estate as easily as writing a check from the plan. If investing your pre-tax funds, the investment is tax-deferred. If investing using your Roth funds within the plan, the gains are tax-free.
Loan and notes
You can lend to any non-disqualified party using your Solo 401 k. You can also buy notes from a qualified party. Payable interest incurred from these loans or notes are tax-deferred, if you direct the money back to the plan. If you lend to a non-disqualified party, the interest goes back to the plan. No tax payment is due until the time of withdrawal.
Coins and precious metals
You can also invest your Solo 401k plan in coins, currencies, and precious metals. This is one of the advantages of the plan. According to general economic principles, precious metals and coins tend to keep up with the rate of inflation. Make sure to store these investments with an IRS-approved, third party depository. Plan rules do not allow you to personally store precious metals that belong to your plan.
Tax liens
Your 401k can purchase tax deeds and tax liens. The revenue flows back to the plan and is tax-deferred until the distribution is taken.
Finally, the Solo 401 k can invest in these and much more. The IRS only defines what you cannot invest in, not what you can. The possibilities are nearly limitless.