We have seen a growing number of solo 401(k) plan clients looking to take advantage of the loan feature in order to pay down growing household debt
NEW YORK (PRWEB) August 15, 2018
IRA Financial Group, the leading financial technology provider of self-directed solo 401(k) plans for self-employed and small business owners, has seen a growing number of self-employed and small business clients seeking to use the solo 401(k) plan loan option as a way to pay off higher interest rate household debt. With IRA Financial Group Solo 401(k) loan option, one can use up to $50,000 of their retirement funds tax-free to help pay off existing household debt which is subject to higher interest rates.
According to the Federal Reserve Bank of New York’s quarterly report on household debt and credit Debts rose by $82 billion in the second quarter, driven by rising mortgage, credit-card and auto-loan balances. “We have seen a growing number of solo 401(k) plan clients looking to take advantage of the loan feature in order to pay down growing household debt,” stated Adam Bergman, President of the IR Financial Group.
Internal Revenue Code Section 72(p) allows a Solo 401K Plan participant to take a loan from his or her 401K Plan so as long as it is permitted pursuant to the business’s 401K Plan documents.
A solo 401k loan is permitted at any time using the accumulated balance of the solo 401k 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 5 years or less with payment frequency no less than quarterly. The lowest interest rate that can be used is Prime as per the Wall Street Journal, which is currently 5%. “The ability to use the Prime interest rate as part of the 401(k) loan feature is quite attractive to many households who have significant credit card debt at higher interest rates.
With IRA Financial Group’s Solo 401K plan loan feature, an entrepreneur who is self-employed individual or small business owner with no employees can borrow up to $50,000 tax-free and penalty free. There are no penalties or taxes due provided loan payments are paid on time.
IRA Financial Group’s Solo 401k Plan documents will allow a self-employed individual to use a loan from your Solo 401k for any investment purposes, including real estate, funding your business or a new business, tax liens, private placements, etc.
IRA Financial Group is the market's leading provider of self-directed retirement plans. IRA Financial Group has helped thousands of 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.
Adam Bergman, IRA Financial Group partner, has written seven books 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 http://www.irafinancialgroup.com or call 800-472-0646.