Advantages of 401Ks over SDIRAs in buying notes

[Gail Greenberg]

Found out at #NoteCamp in a presentation by Tyler Carter from Nuview IRA that compared to a SDIRA, with a 401K, you can....

1. Contribute up to $53,000 ($59,000 if you're over 50) in a year to a 401K where the annual contribution to an IRA is capped at $6500.

2. Borrow money to use along with 401K funds and NOT trigger a UBIT type tax as you would with an IRA

3. Have checkbook control for free without attracting the attention of IRS auditors

4. Make contributions as traditional (tax-deferred) because it affects the amount you need to contribute for your employees but then convert it to Roth within the 401K

5. Be able to leave money in your Roth 401K tax free forever for your heirs. You never have to take it out, unlike required distributions under an IRA.

[Dmitriy Fomichenko]

@Edward B.

When you become self-employed you are both the business owner and the employee of your own business. Solo 401k is "employer sponsored plan" and allows both contributions: as an employee and as the business owner. $53,000 is the total contribution limit for the Solo 401k in 2016.

You can contribute up to $18,000 as am employee (plus additional $6K if you are over 50). This part is called "elective deferrals", can go pre-tax or post-tax into Roth account of your 401k. Business can contribute additional 20% of your compensation (25% for corporation), this part is called "profit sharing". 

Regarding your rollover question... the correct term to use here is "conversion", not rollover. If the plan allows this, your pre-tax contributions can be converted into Roth. This would be taxable event, but from that point on the investments will grow tax-free in the Roth account.