We have seen a huge surge in interest by the self-employed and small business owners seeking to establish a Solo 401(k) plan, in order to take advantage of the $100,000 tax-free and penalty-free loan option.
MIAMI BEACH, Fla. (PRWEB) April 03, 2020
IRA Financial Group & IRA Financial Trust Company, a leading financial technology Self-Directed IRA and 401(k) plan provider & custodian, has seen a surge in interest for its Self-Directed Solo 401(k) plan in light of the CARES Act signed into law on March 27, 2020. “We have seen a huge surge in interest by the self-employed and small business owners seeking to establish a Solo 401(k) plan, in order to take advantage of the $100,000 tax-free and penalty-free loan option, in light of the financial crisis caused by the COVID-19 pandemic,” stated Adam Bergman, CEO of IRA Financial.
On March 27, 2020, the President signed the $2 trillion stimulus package called the CARES Act - the Coronavirus Aid, Relief, and Economic Security Act. The primary purpose of the Act is that it boosts unemployment insurance payouts and aims to send relief checks to many Americans.
Under the CARES Act, the 401(k) loan amount was increased from $50,000 to $100,000. The loan proceeds can be used for any purpose. In addition, no payments are required to be made in 2020. However, a plan participant must show that they have been impacted health wise or financially by the COVID-19 virus. The 401(k) loan must be paid back over five years starting in 2021, at least quarterly and at an interest rate of at least 3.25% (the Prime Rate as of April 2, 2020).
Under old rules, Internal Revenue Code Section 72(p) allows an Individual 401(k) plan participant to take a loan from his or her 401(k) plan, as long as it is permitted pursuant to the business’ 401(k) plan documents. A Solo 401(k) loan is permitted at any time using the accumulated balance of the Solo 401(k) as collateral for the loan. A Solo 401(k) participant can borrow up to either $50,000 or 50% of their account value - whichever is less. This loan has to be repaid over an amortization schedule of five years or less with payment frequency no less than quarterly.
“In addition to the increase in the loan amount to $100,000, the 401(k) loan is very tax efficient and allows the plan participant to actually increase the value of the plan via interest payments, while also getting tax-free and penalty-free use of the funds,” stated Mr. Bergman.
IRA Financial Group & IRA Financial Trust Company’s Self-Directed IRA and Solo 401(k) plan platform allows investors to invest in IRS-approved alternative asset investments digitally and with no account valuation or minimum balance fees. The primary advantage of using a self-directed retirement account to make private IRS-approved alternative asset investments, such as real estate, is that one can diversify their retirement assets and invest in what one knows and trusts.
IRA Financial Group is the market's fastest growing provider of self-directed retirement plans. IRA Financial Group has helped over 16,000 clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate, cryptocurrency, and private business investments.
The IRA Financial Trust Company, a Self-Directed IRA custodian, was founded by Adam Bergman, a leading former tax attorney and leading voice in the self-directed retirement industry. Mr. Bergman is a leading expert on the taxation of retirement funds and has authored multiple articles on how to use a Self-Directed IRA to buy cryptocurrencies.
Adam Bergman, IRA Financial Group partner, has written seven books on the topic of self-directed retirement plans, including, “How to use Retirement Funds to Purchase Cryptocurrencies,” “The Checkbook IRA,” “Going Solo,” “Turning Retirement Funds into Start-Up Dreams,” “Solo 401(k) Plan in a Nutshell,” “Self-Directed IRA in a Nutshell,” and “In God We Trust In Roth We Prosper.”
To learn more about the IRA Financial Group, please visit our website at https://www.irafinancialgroup.com or call 800-472-0646.