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(800) 395-5200 or Schedule A Call

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

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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) 2020-08-18T14:41:33-04:00

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(2019)Age<50= $6,000
Age > 50= $7,000 Sep IRA =$57,000
Need for custodianYesNo
Entity that holds retirement moneyLLCTrust
Can invest in Life InsuranceNoYes
Invest in Art/CollectiblesNoNo
Start of RMDBy 04/15 on year after 72By 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 ContributionsNoYes
Availability of funds transferredClears via custodian, then transfers to LLCDirectly into Solo 401k account
Checkbook ControlYesYes
Personal Loan from the accountNo50% of account value up to $50,000
UBIT for active investmentYesYes
UDFI for margin tradingYesYes
UDFI for real estate leverageYesNo
Annual Report Filings5498 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 neededNoYes
Annual Maintenance FeePaid to CustodianPaid to Broad Financial
Roth component abilityRequires separate accountCan have Roth & Traditional in same account
Can spouse/ partner make contributions/ use same accountNo, one person per IRAYes, they can use the same account
Consequences of Prohibited TransactionsDistribution of entire IRACan undo PT
Roth componentIncome restrictedNon-income restricted
Contributions & DistributionsInto IRAInto Solo 401k account
Placing Investments(in & out)LLC checking accountTrust checking account
Can Invest in an S. CorpNoYes

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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