Diversifying Retirement Savings with the Self-directed Solo 401k Plan

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Potential investment capability of the retirement plan was the focus of recent event. Presentation by Sense Financial Services highlighted the virtually unlimited investment capability of the plan as well as the Solo 401k loan feature.

Financial Freedom

Financial Freedom

Participants can borrow up to $50,000 from their Solo 401k

Making money in today’s market was the focus of a recent event in Los Angeles. The event was held on Tuesday, February 26, 2013 in Culver City, CA. Attendees learned various strategies to generate passive income, such as investing in notes. The seminar included a presentation on “The Ultimate Retirement Account” which focused on the advantages of self-directed retirement plans, such as the Solo 401k loan feature.    

The self-directed Solo 401k allows participants to access retirement funds to invest in almost every investment class, including real estate, private businesses, precious metals, and notes. The IRS-qualified plan is designed for the self-employed and small business owner with one employee, with the possible exception of a spouse. As a 401k, it is subject to the same rules as traditional plans while giving more options to its participants because of its structure.

Event attendees learned of the plan’s potential to invest in notes. As an investment, notes present a relatively straightforward and profitable opportunity. The plan trustee determines the terms of the note, which includes the loan amount, the rate of interest, the maturity date, the payment dates, and the guidelines for dealing with possible default. Notes can be secured to an individual or a business entity, using real estate or equipment as collateral. As trustee, the plan participant is responsible for setting these terms. All income, profit, and gains from the note are returned to the Solo 401k account, to keep the account from being taxed.

Investing in notes differs from the Solo 401k loan feature. Notes are considered an investment; the funds from the account are invested in the promissory note to a third party. The Solo 401k loan feature allows participants to borrow from the Solo 401k. A loan can be made in any amount up to $50,000 or 50% of the account, whichever is less. This loan can be for any use, such as repaying personal debt or financing a business. The date of repayment is based on when the loan was initiated and can span up to five years from the loan date. The repayment schedule can be determined by the participant, but must be at least quarterly, and must be paid in full, including interest. The loan is paid back to the Solo 401k account.

Investing in notes can be a way to generate passive income in today’s market. Self-directed retirement accounts such as the Solo 401k allow participants to access funds to invest in these opportunities. The plan also includes other advantages, such as the Solo 401k loan feature. Event attendees learned these strategies to diversify their retirement savings at the Los Angeles event.

About Sense Financial Services:

Sense Financial is California's leading provider of retirement accounts with “Checkbook Control”: the Solo 401k and the Checkbook IRA. Over the years, they have assisted hundreds of clients obtain checkbook control over their retirement accounts while providing them with the ability to invest in virtually any investment class, including real estate, private lending, mortgage notes and much more without the need for custodian approval.

To learn more about the solutions they provide, please contact: (949) 228-9393.

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Minna Nah
Sense Financial Services
(949) 228-9326
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