@Matthew Keeney I can say from the consumer side of someone who USES both a SDIRA and a SOLO401K (as do both of my investing partners) they CAN be a great way to go.
There are pros and cons to both traditional investing outside of retirement accounts and within them. For us, it came down to that well over 50%, probably closer to 66% of our EXISTING assets that we could use for investing were sitting within IRAs already. So in my eyes, if you already have funds built up in those types of accounts, it can definitely be a good route to go.
If looking at 'new contributions', again there are pros and cons to doing it through retirement accounts vs not.
Some of the 'pros' in this area will surely chime in here to give you some good advice. Some of it comes down to what your goals are. Are you looking for long term wealth building, current cash flow, etc....
Are you going to be self employed when you leave your current job? If so, SOLO401K can be great for higher contribution limits.
Good Luck, Dan Dietz
PS, Welcome to Bigger Pockets - TONS of great info here!
Thanks Dan. So how did you go about transfering the funds? Did you set up the SDIRA first and if so, did the company handle the transfer?
My new job will has a pension so I won't be setting up a 401k. Plus I'm downsizing and getting rid of my American lifestyle of buying nice cars and expensive things.lol So I should have a lot more cash to save and want a place to keep it but still be able to buy properties.
@Matthew Keeney - I am in the process of transferring over my 401k to a self directed IRA as well. I am using a company called Equity Trust. They seem to have reasonable fees and will allow me to invest my 401k in whatever I'd like.
@Matthew Keeney I would talk to a few of the people who are 'plan providers' that will chime in here (some of them monitor from their work emails so might not chime in until Monday or so). I personally used @Dmitriy Fomichenko who was great, and a few others would be @Brian Eastman . If you look at their 'signature lines' you can tell who the providers are - there are not supposed to 'toot their own horn' so to speak ;-)
Nothing against Equity Trust mentioned above, but I would hands down go with one of the providers who chime in here on BP - the 'personal relationship' you will build and more personal service beats any potentially cheaper fees.
Are you planning on rentals, notes, flipping, etc.? We do rentals and self manage, and for that I would recommend the SDIRA/LLC model where you have checkbook control.
There is some school of thought that if you are looking at rentals and putting 'new funds' (meaning not existing retirement accounts) towards it that it *might* be better to NOT put them into retirement vehicles - it depends on a LOT of variables. In our case, we can leverage on NON-retirement accounts at a 1/5 ratio by putting 20% down - so with 20K we can buy 100K of rentals and not have a lot of current tax due by using depreciation. Within retirement accounts you need to use non-recourse loans which typically want 40% down - so by putting that same 20K INTO a retirement account we can only leverage to 1/2.5, meaning buy a 50K property. Again, all depends on goals.
As far as actually transferring the funds Dmitriy's team at Sense Financial walked us through that and once that was all done we then moved funds over from in our case Fidelity.
Hi Matthew and Daniel,
Your question Matthew and your insight Daniel is perfect timing as I'm starting the process myself. I talked with a company called UDirectIRA but I'd prefer to work with a company recommended by a BP member. I'm a newbie to BP and using IRA money for investment, I hope Dmitriy replies.
you are welcome to contact my office and schedule your complimentary consultation. Talk soon!
Thank you, I'll give you a call on Monday.
Enjoy your weekend,
IRA Services Trust Company offers self-directed IRAs. They are very reputable and have been in business since 1978. Many of my clients use them for self-directed IRAs.