Question 1

What is a self-directed 401(k)?

Accepted Answer

A self-directed 401(k) is a type of retirement account that allows you to invest in a wider range of assets beyond just stocks, bonds, and mutual funds. With a self-directed 401(k), you have the flexibility to invest in real estate, precious metals, private placements, and other alternative assets.

Question 2

What are the benefits of a self-directed 401(k)?

Accepted Answer

The main benefits of a self-directed 401(k) include greater investment control, the ability to diversify your portfolio, potentially higher returns, and the ability to hold alternative assets like real estate and precious metals. Self-directed 401(k)s also offer tax-deferred growth and the same contribution limits as a traditional 401(k).

Question 3

What types of investments can I hold in a self-directed 401(k)?

Accepted Answer

With a self-directed 401(k), you can invest in a wide range of assets beyond just stocks, bonds, and mutual funds. This includes real estate, precious metals, private placements, LLCs, and other alternative investments. The key is that the investments must be permissible under IRS rules.

Question 4

What are the fees associated with a self-directed 401(k)?

Accepted Answer

The fees for a self-directed 401(k) can vary depending on the provider, but they typically include an annual account maintenance fee, transaction fees, and potentially other administrative fees. It's important to understand the fee structure before opening a self-directed 401(k) account.

Question 5

How do I set up a self-directed 401(k)?

Accepted Answer

To set up a self-directed 401(k), you'll need to work with a provider that specializes in these types of accounts. The provider will help you establish the account, provide guidance on eligible investments, and handle the administrative tasks. You'll also need to ensure that your employer allows for a self-directed 401(k) option.

Self Directed Retirement Plans

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Frequently Asked Questions about Self Directed Retirement Plans

What is a self-directed 401(k)?

What are the benefits of a self-directed 401(k)?

What types of investments can I hold in a self-directed 401(k)?

What are the fees associated with a self-directed 401(k)?

How do I set up a self-directed 401(k)?

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