Self-directed 401k strategies

[David M.]

Hello everyone,

Any investors out there who can explain how they used or can use this investment strategy? I'll be retiring soon from the military and civil service. Thank you.

[Chris Tabanico]

Hi David, 

First off, thank you for your service!

As for your question, it really depends on what you are trying to accomplish. Can you elaborate a little on what your goals are?

A self directed 401k, also called a solo 401k, is really just another version of a qualified retirement plan. The benefit is that you can choose pretty much anything to invest in as long as you follow the IRS rules. 

Right now, your retirement plan most likely has minimal choices to invest in (some stock funds, bonds, ETFs if you are lucky) so you are rather limited in choosing an investment vehicle that will help you reach your goals.

From first hand experience, I can tell you that getting a solo 401k was rather easy and I have checks that I write to pay for properties free and clear or to put a down payment if I want to get a loan. You have to find lenders (and there are plenty of them in Arizona to choose from) that offer non-recourse loans where the solo 401k account is listed as the buyer (not you as an individual). The best part is that the gains, if you done correctly are tax free just like a traditional 401k (non-Roth). I set mine up through mysolo401k.net and they helped me along the way to open a fidelity account with checkwriting capability.

A good resource I used before doing this was as follows: https://www.mysolo401k.net/solo-401k/the-process/

If you can provide a little more context, I’ll do my best to help out. We can chat on the phone if you’d like as well. 

Apologies in advance for the lengthy post but I hope it helps.