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(800) 395-5200 or Schedule A Call

Contact our Self-Directed Experts. Schedule A Call or Leave A Message

Contact our Self-Directed Experts.
Schedule A Call or Leave a Message

Self-Directed IRA vs. Solo 401(k)

Questions? Text us at (845) 253-9306.

Self-Directed IRA vs. Solo 401(k) 2021-01-07T14:50:14-05:00

What are the Differences Between a Self-Directed IRA and Solo 401(k)?

What Are the Qualifications?

The Ultimate IRA® The Ultimate Solo 401(k)®
Who can open this account? Any working or retired person. Must be self-employed without any full-time employees.
Maximum annual contributions(2021) Age<50= $6,000
Age > 50= $7,000 Sep IRA =$58,000
Need for custodian Yes No
Entity that holds retirement money LLC Trust
Can invest in Life Insurance No Yes
Invest in Art/Collectibles No No
Start of RMD By 04/15 on year after 72 By 04/15 on year after 72
Minimum Withdrawal Age <59.5=10% penalty taxable distribution
>59.5=tax. distributions
<59.5=10% penalty taxable distribution
>59.5=tax. distribution
Required Minimum Distributions (RMDs) Yes, (Roth- NO) Yes, (Roth- YES)
Required Contributions No Yes
Availability of funds transferred Clears via custodian, then transfers to LLC Directly into Solo 401k account
Checkbook Control Yes Yes
Personal Loan from the account No 50% of account value up to $50,000
UBIT for active investment Yes Yes
UDFI for margin trading Yes Yes
UDFI for real estate leverage Yes No
Annual Report Filings 5498 for current account value & contributions made; 1099R if any distributions;
990T if UBIT or UDFI
5500-EZ only if plan assets exceed $250,000.
990T if UBIT
Annual amendments needed No Yes
Annual Maintenance Fee Paid to Custodian Paid to Broad Financial
Roth component ability Requires separate account Can have Roth & Traditional in same account
Can spouse/ partner make contributions/ use same account No, one person per IRA Yes, they can use the same account
Consequences of Prohibited Transactions Distribution of entire IRA Can undo PT
Roth component Income restricted Non-income restricted
Contributions & Distributions Into IRA Into Solo 401k account
Placing Investments(in & out) LLC checking account Trust checking account
Can Invest in an S. Corp No Yes

Let’s find out which one is best for you:

Learn more about Self-Directed IRAs with the following info:

Custodial or Checkbook Control Plan: Which is Best for You? We Offer Both.

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