Self Directed 401k
If you are a business owner, more options are available for managing your retirement funds . Why pay someone else to make choices for your retirement plan when you can determine your own future by investing in assets you are familiar with and understand? Your experience and comfort level with certain types of investments could help limit the risk while giving you tighter control of the outcome, and the profits in the account are free of capital gains taxes, making the monetary value of the account grow faster through time . With a self directed 401k account you act as your own investment manager. One of the biggest benefits of this type of plan is the variety of investment options that are allowed. In the self directed 401k, you could choose real estate investment property, promissory notes, private stock offerings, tax lien certificates, structured settlements, foreign currency exchanges, and a host of other investment options . To protect the excellent tax advantages of this type of plan, you must be cautious about remaining in compliance by avoiding what the Internal Revenue Service classifies as â€œProhibited Transactions.â€ These prohibited transactions in your self directed 401k would include anything considered self-dealing; selling personal property to your account, using your account as security for a loan, borrowing money from the account, buying property or collectibles for personal use with the account funds, or having your business housed in a property owned by the account. Be sure that you are familiar with the rules so that you don’t jeopardize the account with a disallowed transaction. Select a provider for you self directed 401k account that is customer friendly, offers ongoing Â investment education to their clients, and has a fee schedule you feel is appropriate . The custodial provider will have you fill out the forms and issue you an account number for your self directed 401k and you’ll be ready to take control of your own retirement plan.