Solo 401(k): Self-Directed Retirement Plan for the Self-Employed

A Solo 401(k), also known as an Individual 401(k), is a qualified retirement plan that gives you maximum flexibility and freedom to invest for your future. The Solo 401(k) is similar to a regular 401(k), but is designed specifically for those who are self-employed and have no full-time employees other than their spouse. Self-employed individuals can qualify regardless of their business capacity or structure (e.g. sole proprietorship, partnership, LLC, independent contractor, etc.).

Unlike regular 401(k) plans where the investment options are generally limited to stocks, bonds, or mutual funds, a Solo 401(k) allows you to take advantage of investing in alternative assets - such as real estate, limited partnerships, LLCs, precious metals, private loans and more.

With Nashional Self-Directed as the plan provider, you have the power to take your own path in your retirement planning. We are devoted to helping investors achieve their financial goals for retirement through tax-advantaged and diversified opportunities.

Solo 401(k) Eligibility Requirements

  • Self-employment activity resulting in earned income.

  • Employ no full-time W-2 employees, other than your spouse or business partner, or only part-time W-2 employees who work less than 1,000 hours/year.

Advantages to a Solo 401(k) Plan:

  • Make annual salary deferrals up to $19,500 in 2020 (plus up to an additional $6,500 in catch up contributions if you're age 50 or older) either on a pre-tax basis or as designated after-tax Roth contributions*.

  • Contribute up to an additional 20% or 25% (dependent on your entity type) of your net earnings from self-employment (profit sharing) for total contributions of $57,000 for 2020 ($63,500 if you're age 50 or older).

  • Tailor your plan to allow access to your account balance through loans and hardship distributions.

  • Borrow up to 50% of your account balance, limited to $50,000, for any reason, including paying for a child's college, grow your business, etc.

  • Invest in more than the stock market. With a Solo 401(k) you can diversify into additional asset classes, such as: real estate, small businesses, foreclosures, and precious metals.

  • Control your own account with Checkbook Control rather than using a third party custodian***. 

 

            *All limits may double if your spouse works with you and is also contributing.

            ** A business owner who is also employed by a second company and participating in its 401(k) plan should                  bear in mind that his or her limits on elective deferrals are by person, not by plan. He or she must                                  consider the cumulative limit for all elective deferrals made during a year.

            ***Many of our clients choose to open the checking account for their Solo 401(k) with Titan Bank, as they are                well-versed in servicing this type of unique account and are also able to offer non-recourse loans. Additional                information about Titan Bank is at the bottom of this page. You are not required to use this bank if you do                    not wish. Nashional Self-Directed, and its affiliates, are not compensated by Titan Bank.  

Allowed and Disallowed

Investment Options

    Allowed:

  • Real Estate

  • Businesses

  • Commodities

  • Gold and silver

  • Foreclosures

  • Private loans

  • Private placements

  • Mortgages

  • Stock in a business, (other than an S-Corp)

  • Stocks, bonds, and mutual funds

  • Tax liens

   Disallowed:

  • Collectibles—such as baseball cards, art, or stamps

  • Life insurance contracts

Prohibited Transactions and

Disqualified Persons

Prohibited Transactions:

  • Purchasing property that you or a member of your family personally own.

  • Purchasing property from anyone who provides a service to your retirement plan.

  • Personally occupying a property owned by your Solo 401(k).

  • Receiving a salary or fee for managing your own Solo 401(k).

  • Investing in, doing business with, or directly benefiting a “disqualified person” (see below).

  • Doing business with an entity of which at least 50% is owned by a disqualified person.

  • Self-dealing transactions - any transaction that is made in the interest of or for the benefit of you, a beneficiary, or a disqualified person.

Disqualified Persons:

  • You

  • Your spouse

  • Your parents

  • Your grandparents

  • Your children (and their spouses)

  • Your grandchildren (and their spouses)

  • Your investment advisors

  • Anyone who provides a service to your retirement accounts

  • Any corporation, partnership, trust, or estate in which you directly or indirectly own 50% or more

  • An officer, director, highly compensated employee, or shareholder of 10% or more of the entity described above

   

    *These lists above are not exhaustive Additional prohibited transactions and disqualifed persons may exist, and            often specific  facts and circumstances need to be analyzed. Please contact  Nashional Self-Directed for                        more information.  

Is a Solo 401(k) right for you?

How to determine if a Nashional Self-Directed Solo 401(k) is the right retirement plan for you:

  • Are you a sole proprietor with no full-time W-2 employees other than your spouse or partners, or only employ part-time employees working less than 1,000 hours/year?

  • Do you want the flexibility to invest in asset classes beyond stocks and mutual funds?

  • Do you want the capability to borrow from your plan?

  • Do you want to purchase leveraged real estate in your plan and avoid UBIT (Unrelated Business Income Tax)?

 

If you answered 'yes' to the first question, and all or most of the remaining questions, a Solo 401(k) may be a good retirement savings strategy for you.

Need more information?

Ready to start?

Titan Bank specializes in deposit accounts and non-recourse loans for self-directed retirement customers.  Their offerings include:

  • Account setup in 24 hours!

  • A toll free number to a dedicated retirement account specialist who will always provide live service to you.

  • No setup fees, minimum opening balance, or monthly fees for most customers.

  • Free Checks and Debit cards.

  • Free mobile phone deposit.

  • Online wire/ACH transfers up without a size limit.

  • Non-recourse loan options for deposit customers of Titan Bank.

  • Accounts supported in all 50 states, Guam, and Puerto Rico.

Titan Bank is a Texas national bank, established in 1907.  It's accounts are FDIC insured.  Setup your account today by calling 888-360-1300 or emailing solo401k@titanbank.com.

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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. 

 

WARRANTIES & DISCLAIMERS

There are no warranties implied.

Nashional Financial consists of Nashional Independent Investment Management LLC (“RIA Firm”) and Nashional Independent Insurance Agency LLC. Investment Advisory Services are offered through Nashional Independent Investment Management LLC, a registered investment adviser. Nashional Independent Investment Management LLC may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. Nashional Independent Investment Management LLC’s web site is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of Nashional Independent Investment Management LLC ‘s web site on the Internet should not be construed by any consumer and/or prospective client as Nashional Independent Investment Management LLC’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by Nashional Independent Investment Management LLC with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of Nashional Independent Investment Management LLC, please contact the state securities regulators for those states in which Nashional Independent Investment Management LLC maintains a registration filing. A copy of Nashional Independent Investment Management LLC’s current written disclosure statement discussing Nashional Independent Investment Management LLC‘s business operations, services, and fees is available at the SEC’s investment adviser public information website – www.adviserinfo.sec.gov or from Nashional Independent Investment Management LLC upon written request. Nashional Independent Investment Management LLC does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Nashional Independent Investment Management LLC’s web site or incorporated herein, and takes no responsibility therefor. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

 

This website and information are provided for guidance and information purposes only. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy. This website and information are not intended to provide investment, tax, or legal advice.

Insurance products and services are offered and sold through Nashional Independent Insurance Agency LLC and its appointed agents who are individually licensed in all appropriate jurisdictions.

 

Personal property and casualty insurance products and services are offered through an unaffiliated third party in all appropriate jurisdictions.

 

Nashional Independent Financial Group LLC and other companies referred to within this document are not CPA firms. CPA services are available through an affiliated entity, Hodgson & Nash CPAs PLLC.

Residential mortgage loans and services are offered in Texas through an affiliated entity, NXT Mortgage Company. Jeff Nash NMLS #1823367 and NXT Mortgage NMLS #1582332.

Self-Directed Solo 401(k) Plans are offered through an affiliated entity, Nashional Self-Directed LLC. 

1031 Exchange services are offered through an affiliated entity, Above & Below 1031 LLC. 

Titan Bank is an unaffiliated banking service provider. 

Commodity futures and options are offered through Lakefront Futures & Options and aiSource (collectively, “Lakefront”), an unaffiliated third party for which Nashional Financial has no ownership interest.  Jeff Nash serves as a Branch Office Manager for Lakefront. Trading commodity futures, options, and foreign exchange involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. Managed accounts and/or managed futures are risky and may not be suitable for all investors. Please consult with a Managed Futures specialist prior to investing.

Nashional Financial, and all other companies referred to, are not attorneys. Please consult with an attorney for legal advice. 

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