Exercising prudence in almost anything you do has proven to yield good result and this greatly applies to saving for your retirement. For prudent small business owners, self directed roth 401k accounts like the Solo 401k plan is the best option. This allows a risk-averse person to assign investment options to a much stable choices like real estate, loans, mortgage notes and other non-traditional assets.
Self directed Roth 401k plans are perfect for prudent individuals and those who want to practice prudence in saving for retirement
With a self directed 401 k plan, you are not forced to invest your hard earned money to the stock market or to assets that are not within your choices. The control and decision making is within the hands of the account holder. Furthermore, it has a checkbook control feature that makes it easy for the account holder to issue checks on every investment transactions without the need for a tax custodian, which also means no additional custodian-related fees will be charged to the plan holder as well as custodian-related process delays.
Individual self directed roth 401k plan is indeed designed for prudent individuals. The roth 401k sub account feature avoids the risk of higher tax rates in the future. When taxes are deducted in your contributions the qualified distributions that you will receive during your retirement years are automatically tax-free which means when tax rates become higher in the future, your receivables won’t be affected. With this feature, you can also tax diversify your account when you make both roth and non-roth contributions.
How to set up a self directed 401k is simple. Just make sure that you sign up with a financial provider that can work in line with your retirement goals. Remember that financial service providers that are offering retirement plans are different particularly in their investment expertise. Practicing prudence in choosing your financial provider is equally significant as choosing the best retirement plan to achieve your dream retirement.
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