Self directed /solo 401K or self directed Roth

[Vaughn Funk]

Hi all,

I am getting ready to go through a divorce and am looking at getting about $250,000 from my wife's 403B.  I currently do not have a retirement account except for my retirement from the Navy.  I was told to set up a self directed or solo 401k so that the money can go directly into that.  I am currently a self employed Real estate agent but have had very little income the past 2 years because I went back to school for my MBA.  Any advice on which type of account I can start and get the funds into so that I can start investing in real estate?

[George Blower]

@Vaughn Funk

If you are self-employed then you can open a solo 401k plan. The qualified domestic telations order (QDRO) rules allow for the transfer of 403(b) funds to an IRA or a solo 401k plan.

Self-employment income can be part-time and includes income generated from managing real estate or selling real estate, for example.

However, earned income from self-employment does not include the following:

• Pay received for work while an inmate in a penal institution
• Interest and dividends
• Retirement income
• Social security
• Unemployment benefits
• Alimony
• Child support.