Converting traditional IRA/401K to Self-directed or SoloK

[Catherine Decker]

Hi - I have been doing research on self-directed IRAs and SoloK's. I would like to either roll-over a 401K from a former employer into a SoloK or self-directed IRA or start one.

Here's what I want to know, has anyone done this? If so, can you recommend a "custodian" for these type of accounts?

How does one convert a traditional IRA or 401K into a SoloK or self-directed IRA?

I would love to free up my capital so I have more investing flexibility, but the answers to these questions have eluded me. Any tips or tricks from the BP community would be welcome!

[Dmitriy Fomichenko]

Hello Catherine,

you don't need a custodian with Solo 401k. When you set up truly self-directed Solo 401k plan you can have a checkbook control over your retirement funds eliminating custodian fees and delays that come with it.

After your new Solo 401k plan is established you can request a Direct Rollover of funds from your IRA or 401k into new Solo 401k. There are no tax consequences with that.

This blog post will be helpful for you to understand the self-directed Solo 401k structure:

www.biggerpockets.com/blogs/2810/blog_posts/21298-...

Please also note that Solo 401k is not for everyone. In order to qualify for it you need to have legitimate self-employment activity with earned income or own a small business without full time employees.