Are you a Chase customer who wants more 401K options than Chase offers? Good news: you can establish a self directed Solo 401k Plan that includes great flexibility, ability to diversify your retirement savings into non-traditional assets such as real estate, making after-tax Roth Solo 401k contributions and borrowing up to $50,000 from your plan.
Solo 401k Plans: Chase vs. Sense Financial
Consider the Self-Directed Solo 401K with Checkbook Control from Sense Financial. This plan is designed to meet the unique investment needs of the self-employed, small business owner with no employees other than the owners, independent contractor or consultant. With this plan, a self-employed business owner can enjoy the benefits of a conventional 401(k) Plan but without the need to hire a custodian and pay administrative fees.
So what of the Solo 401K plans works best for you? The answer starts with examining every option the plan provides to ensure it meets your retirement planning, tax, and investment goals.
Many financial institutions, including Chase, Charles Schwab, Fidelity and others, provide Solo 401k plans (also called Owner-Only 401k or individual 401k plans). However, their plans are largely limited to having you invest your entire retirement savings into the stock market. If that’s not for you, then the Chase Solo 401K Plans may not be your ideal choice. Also, the Chase plan doesn’t have a loan feature and doesn’t allow you to make after-tax (Roth) contributions.
By contrast, Solo 401K plans from Sense Financial are designed specifically for small, owner-only businesses and offer all possible features and benefits allowed under the law.
Sense Financial Solo 401K Plan stands apart from the Chase plan in that the Sense option gives you total (checkbook) control over your 401k funds. With the Chase Solo 401K Plans, you are limited to making your investments in stocks, mutual funds or other traditional choices (their plan also requires you to open the account at Chase.) However, with Sense Financial Services, you can open your Solo 401K plan at any bank you want – including Citibank, Wells Fargo or even Chase. In addition, Sense Financial’s Solo 401K Plan lets you make nearly any type of investment, both traditional and non-traditional. That means you can invest in real estate, tax deeds and tax liens, private business, notes, stock, private loans and much more. With Sense Financial’s Solo 401K Plans, you can serve as the trustee of the plan. In other words, you enjoy more control over your investments, where making an investment in your Solo 401K is as easy as writing a check.
Defer up to $56,550 Annually
Similar to the Chase Solo 401K Plan, the Sense Financial plan lest you make tax-deductible yearly contributions up to $51,000 annually (for 2013) with an additional $5,500 catch-up contribution for those over age 50.
No UBIT on Leveraged Real Estate
With the Chase Solo 401K Plan, you will not be able to take advantage to use nonrecourse financing tax-free when making real estate investments with your retirement funds. By contrast, the Sense Financial’s Solo 401K Plans allow use non-recourse leverage tax-free when making real estate investments with plan funds.
Low Cost to Maintain Your Plan
Sense Financial’s Solo 401K Plans are simple to operate. There are no annual filing requirements unless your Plan balance exceeds $250,000, in which case you will need to file simple Form 5500-EZ with the IRS.
Invest as You Wish
By adopting Sense Financial’s Solo 401K Plan, you’ll serve as a trustee of your own plan. You can make traditional stock investments, but you can also invest in real estate tax-free and without custodian approval. That’s something a Chase Solo 401K doesn’t offer.
Chase does not offers loan feature, while Sense Financial’s Solo 401K Plan allows you to borrow up to $50,000 or 50% of your account value (whichever is less) for paying credit card bills, mortgage payments, personal investments, vacation, car, or the use of your choice. You need only commit to paying back the loan over a 5-year period and make payment at least quarterly.
As a Chase customer, you are not allowed to make Roth-type after-tax contributions to your 401k plan. But Sense Financial’s Solo 401K Plan contains a Roth sub-account, to which you may contribute with no restriction. In addition, the Chase Solo 401k Plan does not allow for in-plan Roth conversions or rollovers. But the Sense Financial Services allows for such conversions at your discretion; however, you have pay income tax on the amount that is converted.
Sense Financial Services can set up your Solo 401K Plan via phone, regular mail, email or fax. The whole process typically takes 3 business days, depending on the state of formation and the custodian holding your retirement funds. Our experienced team will streamline the set-up time and cost.
Most importantly, as a client of Sense Financial Services, you will work with an expert to help you set up your Solo 401k Plan. This peace-of-mind service is offered at a fee that is significantly lower than other companies performing the same or similar services.