Brian Davis, San Diego Self-Directed 401K Specialist says, “The number one myth about Self Directed 401K Retirement Plans is that you can’t invest in assets such as real estate, private companies and precious metals in this type of retirement account.” The truth is your retirement plans are allowed to invest in just about anything besides what the IRS deems as a collectible, certain life insurance contracts and dealing with any type of disqualified person from your retirement plan.
A lot of people are under the impression that their retirement plans are only allowed to invest in securities such as stocks, bonds, mutual funds, ETFs and annuities. The reason for that is the retirement community is mostly run by investment banks and insurance companies and those are the products they offer.
IRS guidelines allow a much broader range of investment options and that’s where a Self-Directed 401K Specialist can come in and show people how an individual can shape their retirement plans and invest in other investments that they might like to invest in such as real estate and private companies.
When asked if an individual can invest in their own business or buy a piece of property that they can use personally, Davis answered, “No, you can’t have any personal use of those retirement assets whether it be your business or an asset such as real estate that you buy. It has to be a passive investment.”
People should ask what the rules of investing in a retirement fund are and ask where they can see these rules. The answer to that is they can look up the ERISA Act of 1974. They can look at the IRS website including publications 560 and 590 talking about the allowance of all these different types of investment.
It is important for individuals who invest with Solo 401(k) funds do not have to have a custodial account. They can have their own trust account for a Solo 401(k) and so they can do the administration themselves.
Every Self-Directed 401K owner should know that the penalties for investing improperly could be a whole dissolution of that retirement plan that they are investing in.
It is important the individual investor know there are other options when investing your retirement dollars besides the traditional investment such as brokerage accounts and stocks and bonds. You can invest in real estate and private companies through different types of retirement vehicles whether it is an IRA or 401(k).
The most important thing would be that the investor know all of their options when investing their retirement dollars.
To see more about Brian Davis visit his website at: http://www.accuplansandiego.com. Or, call (619) 892-2438.