Nashional Self-Directed

Self-Directed Solo 401(k) Retirement Plan Providers 

and Educational Consultants

What is a

Self-Directed Solo 401(k)?

A Self-Directed Solo 401(k) is a qualified retirement plan that gives you maximum flexibility and freedom to invest for your future. It offers similar tax-advantaged retirement savings as a regular 401(k), but is designed specifically for those who earn income from self-employment and have no full-time employees other than their spouse or business partner. 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 Self-Directed 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.

A Self-Directed plan allows you to self-direct the funds in the retirement account when and how you see fit, per Disqualified Person and Prohibited Transaction rules that must be followed, see below.

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 business owners and investors achieve their financial goals for retirement through tax-advantaged and diversified opportunities.

 

Self-Directed Solo 401(k) Eligibility*

To be eligible for a Self-Directed Solo 401(k), you must have both:

  • Self-employment income as a business owner or a 1099 Independent Contractor, and

  • Employ no W-2 employees working more than 1,000 hours/year

Your spouse, business partner(s) and 1099 Independent Contractors that work with you are OK.

*Ask us about any potential Control Group issues that might hinder your eligibility.

 

Nashional Self-Directed Solo 401(k) Plans have the following tax-advantaged provisions

 

Contribution Limits

Save on taxes and save for retirement by:

Making 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, after-tax or as designated Roth after-tax contributions. 

You can also contribute through profit sharing up to an additional 20% or 25% (dependent on your entity type) of your net earnings from self-employment.

 

Total contributions for 2020 cannot exceed $57,000,  or $63,500 if you're 50 or older*.

Loan Option

Access your retirement funds and put them in your hands today.

Loans are permissible so that you can borrow up to 50% of your account balance, limited to $50,000, for any reason, tax and penalty free. 

 

It must be paid back within 5 years, (15 years if used to purchase a primary residence,) with interest, which is generally Prime +1%.

 

The CARES (Coronavirus Aid, Relief and Economic Security) Act temporarily increased the loan amount and repayment period. Ask us for details. 

 

Investment Diversification

You can diversify the retirement funds into almost any asset class, such as: stock market-related investments, real estate, certain businesses, foreclosures, land, tax-liens, peer-to-peer lending, precious metals, etc. Disqualified Person and Prohibited Transaction rules apply. Information about these rules is below.

Self-Directed

You control your trust checking account** and have Checkbook Control rather than using a third party custodian. This helps to avoid red tape or delays to use the funds, allowing you to act quickly when investing in, say, real estate.

Investment brokerage accounts managed by an investment advisor can also be used for traditional investments, if you wish.***

Additional information can be found here.

Disallowed Investments | Disqualified Persons

Prohibited Transactions

It's important to know the rules for allowed and disallowed investments, who can and cannot invest with the account funds and the prohibited transactions in which the account funds must not engage. These lists are not exhaustive. It's advisable to have a free consultation with a Nashional Self-Directed Solo 401(k) Plan Specialist before investing the account funds.

 

Allowed Investments

  • Real Estate

  • Most Businesses

  • Commodities

  • Gold and silver

  • Foreclosures

  • Private loans

  • Private placements

  • Mortgages

  • Stocks, bonds, and mutual funds

  • Tax liens

  • And more

Disallowed Investments

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

  • Life insurance contracts

  • S-Corp Businesses

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

Qualified Persons

Everyone else!

  • Friends

  • Siblings

  • Cousins

  • Aunts and Uncles

  • etc.!

Prohibited Transactions

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

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

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

  • Receiving a salary or fee for managing your own Self-Directed Solo 401(k) owned property.

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

  • 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.

Is a Self-Directed Solo 401(k) right for you?

  • Do you have income from self-employment as a one-person business owner, 1099 Independent Contractor, Fix 'n Flipper or Freelancer?

  • Do you have 0 full-time W-2 employees, other than your spouse or partners, or only employ 1099 independent contractors or part-time W-2 employees working less than 1,000 hours/year?

  • Do you want the ability to borrow from your retirement account?

  • Do you want to maximize the amount of income tax that you can defer? 

  • Do you want to have the option to have tax-free money in the account for use in retirement?

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

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

 

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

Need More Information?

Ready to Start?

 

TESTIMONIALS

 
 

CONTACT US

5900 S. Lake Forest Dr., Ste #300, McKinney, TX 75070

469.486.3400 | contact@nashionalsd.com

Business hours in Central Time:

Monday - Thursday: 9:00 - 5:00

Friday: 9:00 - 4:00

After hours: by appointment only.

To discuss your options, please:

or, for a quick question that can be answered by email, please submit it below. 

Affiliated Companies:

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Disclosure:

Nashional Self-Directed does not offer tax, accounting, legal or investment advice. Please consult with the appropriately licensed or certified processional if these services are needed.