How a Self-Directed 401K Works for You

A self-directed 401k is practically the same thing as a 401k, but the main difference is that you’re able to invest in non-traditional investments. At Accuplan we often refer to a self-directed 401k as a one.k. There are some great benefits to a self-directed 401k, so let’s talk about some of them.

Investment types

Regular 401k plans don’t allow for non-traditional investments. If you want to diversify your 401k portfolio and invest in something other than stocks and bonds than a self-directed 401k is for you. You would now be able to invest in farmland, commercial real estate, small tech start-ups, Bitcoin, and so on. The options you have with an SD 401k is almost endless.

Hands-on control

Because a one.k is a 401k plan set up for your company, it allows you to go beyond the regular 401k capabilities. As the manager of the company, you will have direct, hands-on control of and investment decisions over one.k assets. This includes control of the checkbook. Custodian involvement and hassles are eliminated, regardless of whether the investments are in securities, real estate, or other assets.

Low to no fees

Annual fees are eliminated because you control and handle all one.k transactions and act as the custodian. In a regular self-directed IRA, there are annual fees, transfer fees, asset fees, and more.

Gains

A 401k offers a great deal of deferral of income and gains. As long as the company sponsoring the plan generates income, then you can make contributions of up to $53,000 annually to the 401k plan ($18,000 for employee and $35,000 for the employer).

These are just a few reasons that make a self-directed 401k a great option. If you are looking for fewer fees, more control, and more investment options then a self-directed 401k is for you. We can help you set up your self-directed 401k plan.

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