• Skip to primary navigation
  • Skip to main content
  • Skip to footer
Solo 401k

Solo 401k

by Nabers Group

  • Learn
    • Setup >
      • Solo 401k Setup Process
      • Pricing
      • Services
      • Features
      • Deadlines
      • Compliance Calendar
      • Who is the Trustee and Custodian?
      • Do I Need a Third Party Administrator?
      • Multi-Member LLC and the Solo 401k
      • Is a Solo 401k Protected Against Bankruptcy?
      • Checkbook IRA >
        • What is the IRA LLC?
        • IRA LLC Setup Process
    • Funding >
      • Funding Your Solo 401k
      • What’s the Difference Between a Transfer and a Rollover?
      • Rollover Real Estate from the Self-Directed IRA to the Solo 401k
      • How to Document an Indirect Rollover
      • Rollover Real Estate from the IRA LLC to the Solo 401k
    • Contributions >
      • Solo 401k Contributions
      • Contribution Calculator
      • Sole Proprietorship Contributions
      • LLC and Partnership Contributions
      • Voluntary After-Tax Contributions
      • Corporation Contributions
      • Mega Backdoor Roth
      • Contribution FAQs
    • Qualification >
      • How to Qualify
      • Multi-owner LLC Business and the Solo 401k
    • Reporting >
      • Solo 401k Reporting Requirements
      • IRS Form 1099-R
      • How to File Form 5500-EZ
      • Where to File the 5500-EZ and Other FAQs
    • Roth Solo 401k
    • Prohibited Transactions
    • Calculators and Tools >
      • Contribution Calculator
      • Roth Conversion Calculator
      • Solo 401k Retirement Calculator
      • Home Budget Calculator
      • Roth vs Traditional Contribution Calculator
    • Blog
    • Solo 401k FAQ
  • Invest
    • Cryptocurrency >
      • Cryptocurrency Basics
      • Crypto In Your Solo 401k
      • Grow Crypto Gains Tax Free with Roth 401k
      • FAQ – Bitcoin In the Solo 401k
    • Real Estate >
      • Real Estate and the Solo 401k
      • Real Estate Example
      • Financing
      • Non-Recourse Loans
      • Non-Recourse Lending Resources
    • Promissory and Mortgage Notes
    • Tax Liens & Deeds
    • Gold & Silver
    • Brokerage Accounts
    • Private Placements
  • Borrow
  • Pricing
  • Reviews
    • Reviews
    • About Us
    • Refer a Friend
  • Network
  • Support
    • Knowledge Base
    • Community
    • December Daily Q&A
  • Login
Sign Up

Self-Directed IRA vs. Solo 401k

You are here: Home / Blog / Self-Directed IRA vs. Solo 401k

November 24, 2017 by Editorial Team Leave a Comment

What if you could combine all of the strongest points of IRA and 401(k) accounts, and fix the problems?

IRA Strengths

  • IRA accounts are tied to the individual, so that keeps things simple. IRAs can receive rollovers from any other “defined contribution” type of retirement account such as another IRA, 401(k), 403(b), 457, SIMPLE IRA, SEP IRA, Keogh, etc.
  • IRAs can be self-directed.

IRA Weaknesses

  • IRA accounts are subject to heavy taxation when invested into debt-leveraged real estate investments.
  • IRAs require a holding institution called a custodian. Custodians are a necessary middleman for an IRA, and they require additional processing time for transactions. Also, custodian companies can (and do) deny transactions they are unfamiliar with for fear of being sued later.
  • IRAs are limited to fairly small annual contributions and can take a long time to accumulate significant value. The current annual limit is $5,500 or $6,500 if you are age 50 or over.
  • If you make over $116,000 per year you are not allowed to contribute any money to a Roth IRA
  • Traditional IRAs and Roth IRAs have to be kept on separate accounts and platforms, making it harder to accumulate enough money to create a diversified real estate portfolio.

401(k) Strengths

  • 401(k) plans are exempt from taxation on debt-leveraged real estate investments.
  • 401(k) plans do not require a holding institution or any middleman, and thus can avoid additional processing times and the potential for bureaucratic denial of investment for perfectly legal investments.
  • 401(k) plans allow for the accountholder to borrow up to $50,000 tax-free for any reason.
  • 401(k) plans can allow two or more investors to pool funds for greater investment access and diversification
  • 401(k) plans can allow much larger annual contributions and can accumulate significant value much faster than IRAs. The current annual limit is $18,500 or $24,500 if you are age 50 or over.

401(k) Weaknesses

  • Most 401(k) plans are designed by an advisor who receives fees in exchange for directing all investment options to Wall Street public securities products, and thus do not allow alternative investments.
  • Traditionally, 401(k) plans are setup for companies with multiple employees and thus require:
    • tens (or hundreds) of thousands or dollars in annual maintenance fees
      extensive annual compliance reporting and testing
    • ERISA bonding to cover any potential fraud that is possible with so many different people’s money being handled and controlled by third parties
      restrictive documents that restrict and hinder the individual accountholder’s ability to take full advantage of 401(k) investment powers

The Nabers Group Solo 401k: A Dream Come True

Our Solo 401k platform combines the strengths of both types of accounts and solves the weaknesses:

  • You rollover funds into your Solo 401k from virtually any other type of retirement account.
  • Your Investments can be self-directed.
  • There is no need to hire, pay, and wait for a custodian to hold your assets. You get “Checkbook Access” built-in, without the need to register any LLCs.
  • Your Solo 401k is exempt from taxation on debt-leveraged real estate investments.
  • You will never have a third party deny you from investing in a legally compliant investment (which happens with custodians).
  • Your Solo 401k can include additional Unlimited® Subaccounts for your spouse as well—Tax deferred and Roth.
  • You can borrow from your Solo 401k funds up to $50,000 tax-free for any reason.
  • Your spouse, if named as a participant, can also have unlimited rollovers received that can be self-directed into alternative investments.
  • Your annual contribution limits are the most favorable of any retirement account in existence. The current annual limit is $55,500 or $61,000 if you are age 50 or over. Incredibly, your spouse can contribute up to an additional $61,000 as well. This can make an enormous different leading to much faster wealth accumulation.
  • A Roth 401(k) subaccount is available, even if you make too much money to be allowed to contribute to a Roth IRA.
  • Within certain limitations, you can designate how much of your money you want to be designated as “Roth” and how much you want to be tax-deferred the traditional way.

Category iconBlog,  SDIRA,  Solo 401k,  Solo 401k Investing,  Solo 401k Setup Tag iconblog,  SDIRA,  Solo 401k,  Solo 401k Investing,  Solo 401k Setup

5 Ways To Buy Bitcoin

Learn about 5 ways to buy Bitcoin and the pros and cons of each.

(Including how to put BTC in your IRA or 401k)

Learn More

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Ready to take control of your financial future?

Start where you are. Use what you have. Invest in what you want.

Get Started

Footer

Solo 401k by Nabers Group

Solo 401K experts at Nabers Group will help you get your retirement funds into your control, where they belong.

600 17th Street
Suite 2800
Denver, CO 80202

Phone: 877-SOLO-401 [877-765-6401]
Fax: 775-201-1456
Email: [email protected]

Business Hours:
Monday-Saturday 8 am-6 pm MT
Sunday by appointment

Nabers Group BBB Business Review

Sitemap

  • Home
  • Pricing
  • About Us
  • Reviews
  • Blog
  • Solo 401k Client Login
  • Contact Us

About the Solo 401k

  • Qualification
  • Pricing
  • Setup Process
  • Investment Options
  • Roth Solo 401k
  • Reporting Requirements
  • Prohibited Transactions
  • Participant Loan
  • Crypto In Your Solo 401k
  • Real Estate in Your Solo 401k
  • FAQ

Stay Connected

Get the latest self-directed investor news, market updates and trainings straight to your inbox.

Copyright © 2021 Nabers Group LLC | Terms | Privacy

Digital asset services are provided by Nabers Digital LLC