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The Individual 401(k) Home Purchase Plan

The IRA Financial Group Individual 401(k) Home Purchase Plan allows investors to borrow up to $50,000 from their retirement funds to purchase a primary residence. A Solo 401(k) loan is permitted at any time using the accumulated balance of the Solo 401(k) as collateral for the loan. A Solo 401(k) participant can borrow up to $50,000 or 50% of their account value – whichever is less. A standard Solo 401(k) loan has to be repaid over an amortization schedule of 5 years or less with payment frequency no less than quarterly. However, with the IRA Financial Group Individual 401(k) Home Purchase Plan, a loan for a primary residence can be repaid over a 15-year period. The interest rate must be set at a reasonable rate of interest, generally interpreted as prime rate plus 1%, which means participant loans may be set at very reasonable interest rate. The interest rate is fixed based on the prime rate at the time of the loan application.

The Individual 401(k) Home Purchase Plan allows investors to take a personal loan from their Solo 401(k) Plan and use it to purchase a primary residence. “Many retirement investors are looking to purchase a home with their retirement funds,” stated Adam Bergman, a tax attorney with the IRA Financial Group. “The IRA Financial Group Individual 401(k) Home Purchase Plan presents a number of exciting tax planning and investment opportunities that allow investors to purchase real estate,” Mr. Bergman added.

Internal Revenue Code Section 72(p) and the 2001 EGGTRA rules allow a Solo 401(k) Plan participant to borrow money from the plan tax-free and without penalty. As long as the plan documents allow for it and the proper loan documents are prepared and executed, a participant loan can be made for any reason. The Solo 401(k) loan is received tax-free and penalty-free. There are no penalties or taxes due provided loan payments are paid on time. The IRA Financial Group Solo 401(k) Plan documents will allow investors to use a loan from their Solo 401(k) for any investment purposes, including real estate, funding an existing business or a new business, tax liens, private placements, etc.

In addition to the tremendous 401(k) benefits (tax-free profits, high tax contribution deductions – up to $56,500, asset protection and estate planning), the Solo 401(k) allows entrepreneurs to invest tax-free in investments that they know and understand and even allows them to borrow up to $50,000 or 50% of the account value for any purpose. Aside from certain “prohibited transaction” investments outlined in Internal Revenue Code Section 4975, a Solo 401(k) Plan can invest in most commonly made investments, including real estate, private business entities, public stocks, private stocks, and commercial paper.

IRA Financial Group is the market’s leading Solo 401(k) Facilitator. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate, without custodian consent.

To learn more about the IRA Financial Group please visit our website at or call 800-472-0646.

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Posted in IRA Financial Group, Solo 401(k)