Morristown, NJ · Member since 2013 · 1 post · 0 votes
I am considering a self directed IRA. Has anyone worked with BuyPD, Am Estate and Trust and Accuplan? I also talked to IRA Financial Group in NY but they do not work as custodians'. Is a custodian required?
it looks that you work as a real estate agent (based on your profile description), and while self directed IRA will allow you to use your retirement funds to invest in real estate and other non-traditional investments, I want to make sure that you are aware of another option that is available to you: Self-Directed Solo 401k. If you are self-employed you would qualify for this option and there are several major advantages of using Solo 401k over self directed IRA. Here are few:
No need for a custodian (save $$ on transaction and asset based fees)
Checkbook control - you don't need to ask custodian consent to make the investment, simply write the check
Roth sub-account - in essence you can have two accounts in one: regular pre-tax as well as Roth after tax
High contribution limits up to $56,500 per year, this is nearly 10 times more than an IRA. This feature makes Solo 401k great tax sheltering vehicle.
Participant loan feature - give you the ability to access cash up to $50K in your account at any time for any reason
Exempt form UBTI tax on leveraged real estate
There are few other, but I think the above make the point. There is additional info available online if you wish to learn more.
I think it is very important to make the informed decision (knowing all your options). Wish you the best!
I have an account with AET, and i just learned that every withdrawal you make (as in monthly retirement checks) cost $35. Assume you withdraw $1,000 per month - you pay 3.5% per month for the privilege of getting back the retirement money you saved in your IRA.
@Ken Elder There are several Solo 401k providers who can set you up for a reasonable fee and pretty small annual fee with no transaction or asset based fees being charged.
@Chuck Van Court There are a few self directed firms that regularly participate here on BP. I don't recall having seen IRA Financial Group among them. Perhaps someone else can provide any experience they may have had with them.
I was reading your thread on self directed IRA and just curious as to which direction did you go? I'm looking to rollover a retirement account and I am leaning toward self directed solo 401K. I'm not sure I understand the need to eliminate a custodian. How is it classified as a retirement account? That's where I need help.
Because of the many benefits the Solo 401k provides beyond the IRA, most go with the 401k as long as they are eligible. If you have a client base to build, you are likely eligible with your current self-employment activity as long as you do not have employees.
@Helen Chong, the cost to maintain self-directed 401k is depends on the type of plan you have. If you are using services of a custodian the fee structure may have transaction and asset based fees, so your fee will depend on the size of your account, number of assets and number of transactions you do in a given year.
However, custodian is not required for the 401k plan and you can opt for truly self-directed Solo 401k plan. In this case there are no transaction or asset-based fees and the custodian can be eliminated completely. You will need a company to provide you with the IRS-compliant plan documents and ongoing support for a nominal yearly fee. This option give you most control and flexibility.
Fees range from $250 to $1,500. Annually, they range from Zero to $1,000. As you can see, they are all over the map. Having been in this industry for a number of years, I highly recommend calling around and feeling the different providers out.