401k rollover to a self directed 401k or self directed IRA

[Michael Raymer]

just a quick couple of questions about this topic.. 

1 - how much do i need in my 401K to qualify for a self directed IRA.. i have around $23,000 in my 401K

2 - do i need to quit my current job to get the ball rolling on this?

3 - how much in fees?

thanks for any advice!  i know this is a broad topic so i am just looking for general answers.

[Dmitriy Fomichenko]

Michael,

1. There is no minimum, I had one client setup self-directed for his wife with just under $3000. He was using it to invest in tax liens. That was enough for him. But for most people that would not be enough to self-direct. If you can find an investment for your capital, regardless how small of the balance it might be, it probably would be worth it.

2. If you have 401k with the current employer most likely they will not allow you to transfer it out until you are either no longer employed there or reach retirement age.

3. Depends on the structure you chose. Here are your choices: 

- Custodial SD IRA, all transactions are done through a trust company, they hold the assets on behalf of your IRA and your account will be subject to custodial fees, asset-based fees, transaction fees. There is a range of fees based on the custodian you chose.

- Checkbook IRA - accomplished by using choice above and adding special purpose LLC to it. You gain checkbook control, bypass the custodian and eliminate transaction and asset based fees.

- Truly self-directed Solo 401k. If you are self-employed or have a small business w/o any full time common law employer other than yourself and your spouse this might be the best option for you. The benefits are too many to list here, but you can learn more about it in one of my blog posts here on BP:

http://www.biggerpockets.com/blogs/2810/blog_posts...

Hope this helps!