IRAs can have checkbook control. We’ll even help you setup one to do so if it’s your only option. …but the Solo 401k also offers direct checkbook control and is a much better tool for self direction for a couple reasons we cover here.
Basic ideas covering your two (very different) checkbook controlled options:
- Solo 401ks don’t need a custodian. This saves you a pile of paperwork and money.
- Solo 401ks have an ‘Administrator’ and a ‘Trustee’. The Administrator records participant’s contributions/distributions. The Trustee handles money in and out of investments. You can be both and it’s simple and straightforward.
- Solo 401ks can make investments (in insurance and in different types of precious metals) that an IRA can’t. There are no investments an IRA can make that a Solo 401k can’t.
- Nearly anyone who doesn’t have W-2 employees can have a Solo 401k. If you have employees we can create a similar checkbook controlled plan for your whole company.
- Virtually any type of retirement account can be rolled over to a Solo 401k or IRA. We’ve made a handy chart you can review here. The notable exception is the Roth IRA (due a glitch in code terminology they can’t roll to anything but another Roth IRA). Congress is expected to correct this in 2014.
Basic ideas related to checkbook control or custodial ‘self control’ and when each is best:
- Checkbook control lets you invest in ways basic self directed accounts can’t. Tax lien or deed sale? The best deals in the counties that require you to be there and pay in full at the time of bidding. Something you can only do with cashier’s checks already in your hand. Buy real estate, cars, tools, gold or silver coins… just as easily as if the funds were in your pocket. Negotiate a note and execute the contract; no waiting for funds or investment packages to get signed off.
- Custodial accounts are best when you’re making one or two casual, hands off investments. This would generally mean buying an asset where the seller wants to sell to you and it’s something like raw land. Or where it’s a large offering (like a TIC) where they can hold a space for your IRA without issue. We recommend two custodians above all others because of great service and low fees. Just contact us and we can sort which will be a better fit for your needs.
We’ve been doing this 10 years. Our business is largely from financial planners, CPAs, and attorneys. We really like what we do, and we really do offer the only money back guarantee in the industry. Call us. Email us. Explore our site and FAQ. Ask some questions. You’ll be glad you did.