Is there anyone in the San Diego area that is/or can recommend a custodian for self-direct plans?
First, custodian is only required for self-directed IRA, and is not required for truly self-directed Solo 401k plan. It can be set up as a trust allowing you to have checkbook control over your retirement funds.
Second, location is of little importance here, this is a niche that not too many are familiar with, find a provider who offers great service and knowledgeable in this field, rather than looking for someone in your backyard.
The key is service and expertise as you will likely have questions regarding how to invest in real estate or alternative investments.
Here is a post that answers frequently asked questions regarding self-directed 401k plans: https://www.biggerpockets.com/blogs/9552/82969-the-self-directed-401k-faqs
It is often helpful to look at the expenses associated with choosing and adopting a plan, periodic restatement, etc. Also, be aware that all banks do not handle the account type used by 401(k)s with the same facility. I can help you get started if you would like to send me a private message.
I am happy to share my contact that helped me out. I pay ZERO fees yearly and have 100% control over my investments. DM me if you want the name of the person that set mine up for me.
If you're self-employed, you might be eligible for a Solo 401k, which offers many benefits over a self-directed IRA:
- Compared to an IRA, Solo 401k contribution limits are roughly ten times higher.
- There is no custodial requirement for the 401k.
- You don't need the additional expense and administration of an LLC to have checkbook control.
- There is a built in-Roth component whereas IRAs are either traditional or Roth, not both.
- A spouse can also participate in the same Solo 401k plan.
- The Solo 401k has additional tax benefits over an IRA when investing into real estate using leverage.
- The penalties for prohibited transactions are less severe, though it's best not to utilize this benefit :)
I'd recommend you reach out to a few providers who regularly post here on BP to get a better understanding of your options.
@Justin Windham . thanks for the insite. I have been really noticing the benifits of the 401k compaired to the IRA. I thought i would qualify, but it seems i need to find a self employment job.
"The penalties for prohibited transactions are less severe, though it's best not to utilize this benefit :)"
For all following this post. There have been some great answers here, but I came across this webinar (now recording) in the BP marketplace, and found it incredibly insightful
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