Reasons for a Self Directed 401(K)
Why have a Self-Directed Retirement 401(K) Plan with Checkbook Control?

  1. You can defer up to $16,500.00 a year as employee contributions or elect to put it in the Roth component. (NOT DEFERRED - Must pay taxes on the contribution)
  2. You can deduct up to 25% of your compensation up to $46,000.00 as an employer contribution.
  3. You can have a TAX-FREE retirement by making Roth contributions up to $16,500 under age 50 and $22,000.00 over age 50.
  4. Asset Protection - Your plan is protected from creditors in bankruptcy.
  5. Your plan can consolidate your traditional IRA, 403(b), or corporate 401(K) rollovers. However, it cannot hold a Roth IRA.
  6. You can borrow 50% of your total 401(K) account balance up to $50,000.00 for any purpose.
  7. When an IRA buys real estate that is leveraged with mortgage financing, it creates Unrelated Debt Financed Income (a type of Unrelated Business Taxable Income on which taxes must be paid. Qualified plans including the Solo 401(K) plan, are exempt from UBIT taxes.
  8. No custodian required.
  9. Prohibited Transactions - If a IRA makes a prohibited transaction it is fully distributed and taxable. If your 401(K) makes a prohibited transaction in most case you are only taxed on the event.
  10. The only reporting requirements for a Solo 401(K) plan is the filing of form 5500-EZ. It is only required once your plan assets exceed $250,000.00 in value.