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Learn How to Set Up an Individual 401(k)
You’re a small business owner who needs a retirement plan that fits your needs. Take advantage of the Individual 401(k). Instantly receive:
- Checkbook control
- Higher contribution limits – up-to $63,500
- Tax and Penalty-Free $50,000 loan
- Work directly with IRA Financial’s Tax and ERISA specialists
Why Choose IRA Financial
Experience You Need
IRA Financial Group has over a decade of experience helping investors self-direct their retirement accounts.
A Team You Can Trust
Our tax and ERISA professionals have helped over 16,000 clients invest $4.6 billion in alternative assets.
IFG founder Adam Bergman is a leading voice on self-directed retirement & has authored 7 books on self-directing.
Tell Us What You Need
Our team will work one-on-one with you to establish a Self-Directed IRA, Solo 401(k) or ROBS solution that fits your goals
We Wrote the Book On Individual 401K Plans
Adam Bergman, founder of IRA Financial Group, has published 7 books on the topic of retirement plans and taxation, including Going Solo: America’s Best-Kept Retirement Secret For The Self-Employed, Solo 401(k) in a Nutshell, and Self-Directed IRA in a Nutshell. He is a frequent contributor to Forbes, has been quoted in over 250 major publications, and helped over 12,000 clients establish self-directed retirement plans to make alternative asset investments.
Advantages of Using A Self-Employed 401K Plan
High Contribution Limits
While an IRA only allows a $6,000 contribution limit (with a $1,000 additional “catch up” contribution for those over age 50), the Solo 401(k) annual contribution limit is $63,500 for 2020.
A World of Investment Opportunities
With a Self-Employed 401(k), you will be able to invest in almost any type of investment opportunity that you discover, including: real estate (rentals, foreclosures, raw land, tax liens etc.), private businesses, precious metals, hard money & peer to peer lending as well as stock and mutual funds; your only limit is your imagination.
This plan offers a Self-Employed 401(k) participant the ability to access up to $50,000 for use for any purpose, including paying personal debt or funding a business.
“Checkbook Control” and No Custodian Fees
With a Self-Employed 401(k), you can serve as trustee of the Plan giving you “checkbook control” over the Plan’s funds. To this end, making an investment with your Self-Employed 401(k) is as easy as writing a check. Another significant benefit of the Self-Employed 401(k) is that it does not require the participant to hire a bank or trust company to serve as trustee.
Roth Type Contributions
The Self-Employed 401(k) contains a built-in Roth sub-account which can be contributed to without any income restrictions. With a Roth Solo 401(k) sub-account, you can make Roth type contributions while having the ability to make significantly greater contributions than with an IRA.
Cost Effective Administration
In general, the Self-Employed 401(k) is easy to operate. There is generally no annual filing requirement unless your Self-Employed 401(k) exceeds $250,000 in assets, in which case you will need to file a short information return with the IRS (Form 5500-EZ).
Offset the Cost of Your Plan with a Tax Deduction
By paying for your Self-Employed 401(k) with business funds, you would be eligible to claim a deduction for the cost of the plan, including annual maintenance fees. The deduction for the cost associated with the Self-Employed 401(k) and ongoing maintenance will help reduce your business’s income tax liability, which will in-turn offset the cost of adopting a self-directed Self-Employed 401(k) Plan.
Exemption from UDFI
When an IRA buys real estate that is leveraged with mortgage financing, it creates Unrelated Debt Financed Income (“UDFI”) – a type of Unrelated Business Taxable Income (also known as “UBTI or UBIT”) on which taxes must be paid. But, with a Self-Employed 401(k) plan, you can use leverage without being subject to the UDFI rules and UBTI tax. This exemption provides significant tax advantages for using a Self-Employed 401(k) Plan versus an IRA to purchase real estate.
Retirement Saving Consolidation through Rollovers
A Self-Employed 401(k) plan can accept rollovers of funds from another retirement savings vehicle, such as an IRA, a SEP, or a previous employer’s 401(k) plan. Thus, you can directly rollover your IRA or qualified plan funds to your new 401(k) Plan for investment or loan purposes. Note – only Roth IRA funds cannot be rolled into a Self-Employed 401(k) Plan.
“What about your IRA, including rollover IRA? You need to look at state law, advises tax attorney Adam Bergman of New York’s IRA Financial Group.”
“Adam Bergman…gets several calls a day from clients like McDermott looking to invest their retirement funds in real estate. ‘Our average client has retirement accounts of about $150,000 and is looking to buy one or two properties.'”
“Jeff Brown…transferred roughly $50,000 from his workplace 401(k) to purchase homes to fix up and sell…He uses a self-directed IRA that he set up through IRA Financial Group in Miami Beach.”