Posts Tagged ‘self directed 401k’

How to Navigate your First 401(k)/Retirement Plan

Monday, May 7th, 2018

First 401k

Whether you’ve just started your first corporate gig, or if you’ve just been thinking about securing your future, you’ve probably heard the term “401(k)” thrown around a lot, and how you should open one that’s being offered through your workplace. So what is a 401(k) exactly?

401(k) in a Nutshell

Having the (k) in its name fools people into thinking it’s a very complex financial product or plan to grasp. But plain and simple, 401(k) plans are retirement plans set up and sponsored by your employer. For self-employed professionals like freelance writers or home-based accountants, you can open an individual 401(k) plan.

How it works is you set aside a certain portion of cash per month that’s automatically deducted from your paycheck. The amount to be set aside depends on how much you’ve elected to allocate for the retirement plan. You have the choice of investing in a broad range of assets, such as stocks and bonds, which can either be chosen from a prepared group of assets or selected manually by you.

Benefits of Owning a 401(k)

For starters, the monthly investments put into your 401(k) can compound into a large sum of cash, given that you maximize your monthly contributions and do not withdraw anything from the account prematurely.

Through a 401(k) account, your employer may elect to match every dollar of your contributions, which is basically free money. Most employers have a 401(k) match program, and they will usually match up to $4, if not dollar-for-dollar.

Just because you put your money in a retirement plan, it doesn’t mean you completely lock up the cash until you retire. It’s highly advised against, but you can borrow money from the account for particular purposes, such as purchasing a home, sending your kid to college, or paying for unforeseen medical expenses.

One downside to borrowing funds from your 401(k) is that you are usually charged interest that must be paid back. But as long as you work for the employer sponsoring your 401(k) plan that you used to secure the loan, you will not be liable for any income taxes.

Building Your 401(k)

Choosing the assets you wish to invest in through your 401(k) can be intimidating, especially for those who have close to zero experience and knowledge with regards to financial markets. Fortunately, your employer will already construct a list of asset choices with the help of an investment broker. The downside to this is that you get stuck with whatever list they come up with.

As a general rule of thumb, you should build a portfolio that aligns with your risk profile. There are basically five types of funds you will be choosing from – stocks, target-date, blended-fund, bonds/managed, and money market. A thorough analysis of each group of assets should give you a better grasp of which ones to choose.

The next thing you’ll have to figure out is the monthly contributions you want to set aside for your 401(k). It all comes down to your monthly expenses, for instance, you obviously want to make sure you have sufficient income to pay the bills and buy your family’s basic needs. Other factors that merit consideration include employer dollar matching and maximum allowed contributions.

Investing can be somewhat tedious, yet is something that’s crucial for your future self. Make use of all the resources given to you to make solid decisions, and navigate your first 401(k) retirement plan effectively, and with confidence.

Should You Opt Out of a 401K and into a Self-Directed 401K?

Monday, April 2nd, 2018

Out of a 401k - Copy

Many of those reading this article will hopefully know what a self-directed IRA is, but we’re here to talk about what exactly the lesser-known self-directed 401K is, and why you should think about opting in for one.

A self-directed 401K is essentially the same thing as a regular 401K, it’s a retirement savings account. The main difference is that you are able to invest in non-traditional investments, so it opens up your 401K in the same way a self-directed IRA opens up a regular IRA.

The way that a 401K plan works is that your company serves as the “plan sponsor” for the 401K, but it doesn’t have anything to do with investing the money. Instead, the plan sponsor (The company you work for) hires another company to be the administrator of the plan and its investments. The plan administrator may be a mutual fund company, a brokerage firm, or even an insurance company.

A self-directed 401K gives you thousands of options, so for a seasoned investor who is used to doing financial research, that’s a good thing. But if you’re a novice, assessing a world of mutual funds and stocks can be overwhelming.

Start by considering how much time you have until you need the money — your expected retirement age. Then think about how much risk you’re willing to take. Can you own aggressive investments without losing sleep, or do you need something more stable before you’re comfortable? Your time horizon and your risk tolerance should be the deciding factors when you choose what kinds of 401K investments are right for you.

How a Self-Directed 401K Works for You

Monday, November 27th, 2017

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.


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.

Self-Directed IRA Rules – Self-Dealing

Wednesday, March 5th, 2014

There are many benefits that come with self-directed IRA accounts. Namely tax advantages and the ability to invest in non-traditional investments with your retirement accounts. In order to fully maximize the benefits that come from self-directed retirement accounts, you must follow the self-directed IRA rules and 401k rules.

One rule to remember that can be detrimental to your retirement accounts and investing is the rule of self-dealing.

Self-dealing can easily be looked over if you don’t know enough of the rules to investing with your self-directed IRA or 401k. In order to understand what self-dealing is first let’s talk about how a retirement account works. Stripping it down to very basic terms retirement accounts are designed to benefit the owner of the account upon retirement and no other time before then.

Understanding that makes it much easier to understand what self-dealing is.

Self-dealing is when an IRA transaction is done that brings personal gain to the account owner. Remember, the account owner cannot receive any personal gain with retirement accounts until retirement. If so, you could be subject to taxes and other penalties.

Examples of Self-Dealing In A Self-Directed IRA

  • Living in the house you purchased with your IRA
  • Allowing family to live in the house you purchased with your IRA
  • Taking out a personal loan from your IRA
  • Paying yourself a salary from your IRA
  • Sweat equity
  • And lastly, buying precious metals from yourself

A similar rule to self-dealing is disqualified persons. Because you cannot do transactions with certain persons with your self-directed IRA or 401k. Who are these disqualified persons? Find out more at Self-Directed IRA & 401k Disqualified Persons

If you need to know more about your self-directed IRA rules specific situation please contact us today. We are here to help you know the rules to investing with your IRA or 401k


How Much Money Should You Have in Your Retirement Accounts?

Monday, February 17th, 2014

How much do you need to retire

Saving for retirement can seem so frustrating and out of your hands. There are so many things you can do to make sure you are involved with your own retirement. You can even invest your retirement how you want with a with a self directed account. Self directed accounts can be IRA or 401Ks. What is great about a self directed account is that you can invest in things like real estate and gold. There is plenty of other things you can use your IRA to invest in with a self directed account. If you are worried about invest in the stock market then a self directed account is a great option. Once you have a self directed account then what? Start investing!! Even when investing with a self directed account it is important to remember about your end goal of securing a great retirement.

We have extensively gone over retirement and how to prepare for that ever so exciting, yet potentially stressful time. The more you are prepared for retirement the less stressful it will be. Why is it stressful? It is stressful because if you haven’t prepared well enough then you may be wondering if you have enough money in your retirement accounts? This is what most of us worry about. With a self directed account it isn’t always about how much money is in your accounts but what are your assets worth?  Either way knowing you have enough to get through your retirement without running dry is important. Today we will be discussing how much money you will need when you actually do retire.

As knowing a perfect figure can be quite tricky and each situation can rule different outcomes it is wise to sit down with a financial planner to make sure you are on the correct track for your situation. A few of the factors that need to be considered when looking at your situation are:

When You Retire

When you retire can have a huge impact on your retirement income. Just speaking of when you will start collecting social social security between 62 to 70 can be dramatic. Say you earned $50,000 a year and turned 62 in 2013. You could collect roughly $1,011 a month as a single. If you waited until 66 you would be able to collect roughly $1,420 a month (in today dollars). If you started collecting at 70 you would collect roughly $1,972 a month (as before it is in today dollars).

Where you Retire

$300,000 can go a lot farther in places like Daytona Beach, Florida, Pocatello, Idaho, Greenville, S.C. than it can in San Francisco, California, or New York, New York. Make sure you know the cost of living where you are retiring. You may find that you need to adjust your savings plan depending.

What You Plan To Do While Retired

This is an obvious but often overlooked aspect of retirement. If you plan to continue the same lifestyle that you typically had before retirement you should be ok. If you plan to travel and do things that you never did while working you may need to boost your retirement savings plan.

How Long You’ll Live

This is another huge thing to be aware of when retiring. Of course we never know what is going to happen but you should plan for the long haul. There are different ways you can judge how long you will live. There are expectancy calculators and the IRS has a table to guestimate how long you will live. Using those guestimates you’ll be able to know how long you’re going to need money which will be a great insight to figuring out how much you’ll actually need.
With so many variables that go into figuring out how much you actually need is it even possible to have any idea what I should be saving now? Yes, it is very possible to have a good idea of what you need. There are plenty of calculators that help you with your retirement. There is also a general rule of thumb that can give you a good starting point.
  • Age 35: Have saved as much as your current salary.
  • Age 45: Have three times your salary saved.
  • Age 55: Save at least five times your salary.
  • Age 67: When it’s time to retire, a great goal is to have saved at least eight times your ending salary.
This is a great starting point and if followed can give you a very solid basses for your retirement. It still doesn’t beat out getting as detailed as possible though. Look at every aspect of your life and figure exactly how much you spend and do your best to figure out future spending. Again, the more detailed detailed the plan the better. If you follow that detailed plan you are much more likely to be able to go through retirement lasting on your own money. you need to very wise to dig as deep as you can and to get as detailed as possible.