Live Q&A from April 12, 2023. Questions were answered by Minna, our Senior Account Manager….(read more)

LEARN MORE ABOUT: IRA Accounts

TRANSFER IRA TO GOLD: Gold IRA Account

TRANSFER IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

On April 12, 2023, a Q&A session was held to clarify the differences between Solo 401k and Self-Directed IRA plans. The event was attended by financial experts, business owners, and investors keen to learn more about these two retirement plan options. Here are some of the frequently asked questions during the session and their answers.

1. What is a Solo 401k plan?

A Solo 401k plan is a tax-advantaged retirement plan designed for small business owners or self-employed individuals. This plan allows you to contribute more to your retirement savings than other plans, and it offers a variety of investment options. You can invest in stocks, bonds, mutual funds, real estate, and other assets.

2. How is a Solo 401k plan different from a Self-Directed IRA plan?

A Self-Directed IRA plan also offers a wide range of investment options, including real estate, stocks, bonds, and private equity. However, a Solo 401k plan allows you to contribute more to your retirement savings and offers more flexibility in terms of investing. A Solo 401k plan also allows you to take out a loan from the plan balance, which a Self-Directed IRA plan does not.

3. Can I have both a Solo 401k plan and a Self-Directed IRA plan?

Yes, you can have both a Solo 401k plan and a Self-Directed IRA plan. However, you need to make sure that you do not exceed the annual contribution limit for each plan. The contribution limits for a Solo 401k plan are higher than those for a Self-Directed IRA plan.

4. How much can I contribute to a Solo 401k plan?

For 2023, the annual contribution limit for a Solo 401k plan is $62,000 for individuals under 50 years old and $69,000 for individuals 50 years old and above. This includes both employer and employee contributions. The maximum annual contribution limit for a Self-Directed IRA plan is $7,000 for individuals under 50 years old and $8,000 for individuals 50 years old and above.

5. Can I rollover funds from a Self-Directed IRA plan to a Solo 401k plan?

Yes, you can rollover funds from a Self-Directed IRA plan to a Solo 401k plan. This can be beneficial if you want to consolidate your retirement accounts or have access to more investment options.

In conclusion, the Q&A session provided valuable insights into Solo 401k and Self-Directed IRA plans. These two plans offer flexibility, tax advantages, and various investment options. To determine which plan is right for you, consider your retirement goals, financial situation, and investment preferences. It is advisable to seek the services of a financial advisor to help you make an informed decision.