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Investment Freedom – Self-Directed Solo 401(k)s allow freedom and control over asset diversification

Updated: Jun 14, 2021

The Self-Directed Solo 401(k) retirement plan is for eligible investors who want to go beyond the standard investment options that are available for traditional retirement accounts—way beyond, in some cases. This kind of plan allows account holders to have control over buying and selling a wide array of asset classes for maximum diversification potential within the plan.

Investment options for Self-Directed Solo 401(k)s

Assets that it can invest in:

The account holder can self-direct the funds to be invested in almost any asset class*, including, but not limited to:

- Residential and commercial real estate

- Tax liens, deeds, notes, and foreclosures

- Land

- Water rights

- Oil and gas mineral rights

- Stock market, funds, and bonds

- Futures and options

- Most business types

- Private and hard money loans

- Select precious metals and some coins

- Cryptocurrency

*Disqualified Person and Prohibited Transaction rules apply when engaging in any investment transaction.

Assets that it cannot invest in:

The shorter list to provide consists of the assets disallowed from investment:

- S-Corporations, because the Self-Directed Solo 401(k) cannot be a shareholder of a business

- Art

- Antiques

- Rugs

- Collectibles, such as stamps and baseball cards

- Life insurance contracts

Since Self-Directed Solo 401(k) plans have high contribution limits and existing pretax retirement accounts can be rolled into it, large sums of money can be accumulated rather quickly and invested rather freely.

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