Solo 401k for Sole Proprietor: Investing in Gold for Retirement is a Smart Move

Investors and economists have always debated over the better investment choice among gold and stocks. The truth is that it depends upon the time of purchase and there are instances where each of these options has outmatched the other one. The investors who initiated investing in SPDR Gold Trust at the time of its inception in 2004 witnessed 157% improvement in the prices of gold whereas during the same period, S&P 500 improved by 113%, according to Morningstar. There are times when S&P 500 has outmatched gold investments.

Solo 401k for sole proprietor

Are you a small business owner with an interest in gold investments? Solo 401k for sole proprietor is a retirement plan that allows investment in precious metals including gold, silver, platinum, and palladium. However, not every Solo 401k plan is created equal and it is important to ask your retirement plan provider for these investment options.

Precious Metal Investments Approved by IRS

  • American gold eagle coins: You can purchase U.S. gold coins weighing one ounce or one-half/one-quarter/one-tenth ounce. Apart from American gold eagle coins, any legal tender gold coins with 99.5% purity are allowed for Solo 401k investments.
  • Treasury Department silver coins: One can purchase one ounce silver coins issued the U.S. Treasury Department for IRA investment purposes.
  • Solo 401k Trustees’ metal bullions: IRS allows investments in gold, silver, platinum, and palladium bullions under the possession of trustees with Code Sec. 408(a) approval.
  • State issued coins: You can also invest in any of the state issued precious metal coins.

If you are planning to invest in precious metal bullion, then the bullion must be under the possession of a U.S. trustee, bank or financial institution. On the contrary, investments in IRS approved coins are simpler and you can keep these coins under the possession of any third-party security service including private vaults, banks or financial institutions.

Before investing in precious metals, make sure to consult your Solo 401k account provider. The key to precious metal investment is to understand and study the market. Investing in precious metal offers liquidity and cost-free maintenance. With checkbook control service, you can invest in precious metal according to the market conditions.

Solo 401k retirement plans offer higher contribution limits, which means you have the financial resources to grab any profitable investment opportunity. In addition to it, the participant loan offered in Solo 401k plans allows one to borrow up to $50,000 or 50% of the overall account balance. In short, Solo 401k is a retirement plan that caters to every single requirement of a small business owner and proprietor.

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