Viggen Avedissian, a Sense Financial client, had seen the ups and downs of the stock market and wanted to diversify his investments. He shared his experience setting up a self directed Solo 401 k plan to invest in a rental property:
Alternative Investments with a self directed Solo 401 k
One common myth about retirement plans is that the only investments allowed are stocks, bonds and mutual funds. However, the IRS does not prohibit retirement plans to hold other investments. It is often the custodians or fund managers that limit the options to the products they offer.
With a self directed Solo 401k, plan owners have the control to choose other investments for their plan. Among these options are real estate, tax liens, private businesses, precious metals and more. Viggen Avedissian chose to invest his 401k fund in rental properties and safeguard his retirement nestegg from the ups and downs of the stock market.
Solo 401k Checkbook Control
Another advantage of a self-directed Solo 401 k is that the plan owner can gain Checkbook Control over their retirement funds. The 401k fund can be held at any bank chosen by the plan owner. He or she will be the only person with direct access to the fund. The plan owner can also simply write a check or make a wire transfer for any investment purchase or expense, without going through a custodian.
With time-sensitive investments such as real estate, having Checkbook Control over the Solo 401k is crucial for investors to capture a good deal.
How to Get Started
Once he learns about the benefits and advantages of a self directed Solo 401 k plan, Viggen Avedissian did some research and decided to choose Sense Financial as his plan provider. He recommends the firm for excellent support and customer service throughout the process. Viggen took the necessary steps to set up a Solo 401k and started investing.
- Step 1: Set up a self-directed Solo 401k plan with a qualified plan provider
- Step 2: Rollover money from a previous retirement plan, such as employee 401k or a traditional IRA.
- Step 3: Perform due diligence and select a potential investment
- Step 4: Fund the investment directly by a check or wire transfer. Title the property or asset under the name of the Solo 401k trust.
Investing in real estate with a self directed Solo 401 k plan is a good way to diversify your 401k investments, while still taking advantage of the tax benefits that a qualified plan offers. Viggen Avedissian is one of many successful investors that have learned about the benefits of having a self directed plan and made the change. With the right plan provider, the process of transitioning from a traditional retirement plan to a self directed Solo 401k doesn’t have to be complicated. Viggen is happy that he receives prompt and constant support throughout the process.
With the right plan provider, the process of transitioning from a traditional retirement plan to a self directed Solo 401k doesn’t have to be complicated. Viggen is happy that he receives prompt and constant support throughout the process.
To learn how you too can gain control of your retirement plan, talk to a Sense Financial retirement expert today!