Are all solo 401k’s created the same?

3 Replies

I have decided to roll my 401k over to a Solo 401k. That way I can use it for real estate investments. I’ve started to do a little research. However, I figured I would ask the experts if there is one that stands above the pack.

@Mitchell Flaherty

No, not all Solo 401k plans are create the same. If your goal is to have a truly self-directed Solo 401k plan for alternative investments (including real estate), you will probably benefit by reading this discussion: 

https://www.biggerpockets.com/...

@Mitchell Flaherty

All Solo 401k's are not created equal. There are several brokerage firms that can create 401k plans but they cannot invest into real estate. Most of them do not allow for Roth contributions or Roth conversions. I am not aware of any brokerage firm's Solo 401k plans that allow for after tax (Non Roth) contributions and some do not even allow for participant loans. On the other hand, if you work with a self-directed Solo 401k provider, these plans will allow for investment into alternative assets such as real estate, and most of them allow for all of the features I mentioned. There can be quite a difference between one Solo 401k document and another. It is important to check with the company you are thinking about working with to make sure the plan has the provisions you need.