Discover Why Millions Have Chosen the Solo 401(k) vs. an IRA
Are you earning income from self-employment? Take advantage of the Solo 401(k) Plan today! With higher contribution limits, checkbook control and a tax-free loan, the Solo 401(k) has steadily become a popular option for small business owners and the self-employed.
The IRA Financial Difference
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.
How You Will Benefit From Opening
a Solo 401K Instead of an IRA
High Contribution Limits
The 2020 contribution limits for a Solo 401(k) retirement plan (also known as the self-employed 401(k) contribution limit) has increased from 2019 contributions. Depending on your age and earnings, you can contribute up to $57,000 if you’re under age 50. You can contribute $63,500 if you’re 50 and older.
While an IRA offers no participant loan feature, the Solo 401k allows participants to borrow up to $50,000 or 50% of their account value (whichever is less) for any purpose.
Finance a Business or Investment
Borrow up to $50,000 to finance a business or make an investment.
Flexible Investment Options
You can invest in almost any type of investment, including real estate, private business entities and cryptocurrencies and channel the gains back into your 401(k) tax free.
Roth Type Contributions
With IRAs, those who earn high incomes are disallowed from contributing to a Roth IRA or converting their IRA to a Roth IRA. The Solo 401(k) plan contains a built in Roth sub-account which can be contributed to without any income restrictions.
Cost Effective Administration
In general, the solo 401(k) plan is easy to operate. There is generally no annual filing requirement unless you’re solo 401(k) plan exceeds $250,000 in assets, in which case you will need to file a short information return with the IRS (Form 5500).
Exemption from UDFI
When an IRA buys real estate that is leveraged with mortgage financing, it creates Unrelated Debt Financed Income (a type of Unrelated Business Taxable Income) on which taxes must be paid. A Solo 401(k) plan is exempt from UDFI.
“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. ‘If you have a judgment against you and you don’t file for bankruptcy, most states will still protect your IRA from the judgment,’ says Mr. Bergman.”
“Jeff Brown…transferred roughly $50,000 from his workplace 401(k) account to purchase homes to fix up and sell, partnering with a few other investors. He uses a self-directed IRA that he set up through IRA Financial Group in Miami Beach, Fla.”
“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,” he said. “After 2008, they didn’t trust Wall Street. They wanted hard assets.'”