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Updated over 5 years ago on . Most recent reply

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Joe Khan
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What is a solo 401k and why should i have one if I'm starting out

Joe Khan
Posted

My wife and I would like some information about a solo 401k 

We have decided to invest in real estate and would like to invest under a LLC.

I read a few post about solo 401k but I'm unsure of the benefits. 

My questions are :

Why should i open a solo 401k ?

Who can I go to so i can open a solo 401?

How do investors use the solo 401k for their benefits ?

Thank you BP community for any help offered. 

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Dmitriy Fomichenko
#1 New Member Introductions Contributor
  • Solo 401k Expert
  • Anaheim Hills, CA
6,283
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Dmitriy Fomichenko
#1 New Member Introductions Contributor
  • Solo 401k Expert
  • Anaheim Hills, CA
Replied

@Joe Khan

First, self-directed Solo 401k is not for everyone. To be eligible you must have legitimate self-employment activity or own a business without full time employees (other than you and your spouse) that generates earned income.

Second, you CANNOT use Solo 401k for your personal benefits. This is a retirement account, which means that you get to use it for your benefits when you retire, not now.

If you are eligible, a truly self-directed Solo 401k plan offer several great benefits such as large contributions (excellent tax shelter), low cost and the ability to invest your retirement funds into alternative assets. 

Here is an in-depth discussion on the topic that you may find beneficial: 

https://www.biggerpockets.com/forums/51/topics/527877-self-directed-solo-401k-for-real-estate-investors-q-and-a

  • Dmitriy Fomichenko
  • (949) 228-9393
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