Good afternoon, my wife will soon be changing
employers. I'm considering opportunity for her to open Self-Directed 401k and
have a few questions.
QUESTION 1:
Does her current plan qualify for your Self-Directed 401k product since it is a 403b rather than a 401k?
QUESTION 2:
Can I set up her new 401k at new employer in this fashion as well?
Thanks,
Marc
ANSWER to Q1: Self-Directed 401k also known as Solo 401k or Individual 401k can be
funded by a transfer/rollover from a 403(b) in addition to other retirement plans
such as 401(k) from former employer, Defined Benefit Plan, Government 457(b)
plan and all IRAs except for Roth IRA. For full list of retirement plans that
may be rolled over to Solo 401k visit Consolidating Retirement Plans.
ANSWER to Q 2: Since 401k plans are offered by
employers, chances are her new employer offers 401k plan to their employees. However, her new employer probably doesn't offer Self-Directed
401k, which refers to 401k plans that allow the 401k participants
to invest their 401k funds in alternative investments such as rental
properties, fixer-uppers, condos, family homes, as well as precious metals,
trust deeds, tax liens, private placements, etc.
On the other hand, if
your wife is starting her own business and will not have any full-time
employees, she can open Solo 401k with
a Solo 401k provider like us and transfer her 403(b) to it as well as make
ongoing annual contributions from earnings generated from her self-employed
business. She could then invest her Solo 401k in alternative investments such
as real estate in addition to the alternative investments mentioned above,
because as a Solo 401k provider our Solo
401k plan document allows for investing in alternative investments.
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