Key Points 

• Rolling over a 401(k) into a Checkbook IRA enables investors to diversify beyond Wall Street products, offering more investment choices like real estate and private businesses.
• The process of rolling over a 401(k) into a Checkbook IRA maintains the tax-advantaged status of retirement savings, whether done through a direct or indirect rollover.
• Checkbook control streamlines transactions, allowing investors to manage everyday investment transactions directly through a dedicated entity and checking account.

Investing for retirement is all about finding ways to keep your financial future potentially secure while maintaining the freedom to manage your investments on your own terms. Many people with standard 401(k) accounts find themselves wanting more flexibility and options beyond Wall Street products. One way to unlock this level of control is by rolling over your 401(k) into a Checkbook IRA. With this setup, you can invest in a broader range of alternative assets—including real estate, private businesses, cryptocurrency, and more—and take a more active role in managing your retirement funds.

What Is a Checkbook IRA?

A Checkbook IRA is a Self-Directed IRA (SDIRA) that grants the account holder the highest level of control over everyday investment transactions. A Checkbook IRA includes a specialized entity, such as an IRA LLC or IRA Trust, that is owned by the IRA. You then open a dedicated checking account under the entity’s name to gain checkbook control while keeping your retirement funds and investments clearly separated from your personal funds for tax advantages.

The key difference between any SDIRA and a standard IRA is the range of investment options. While standard IRAs typically only involve stocks, bonds, and mutual funds, SDIRAs allow for portfolio diversification with alternative assets. The Checkbook IRA takes the SDIRA a step further by streamlining everyday investment transactions and reducing the involvement of the Self-Directed IRA custodian in processing transaction paperwork.

What Is a 401(k) Rollover?

A 401(k) rollover is the process of moving funds from an employer-sponsored retirement plan into another tax-advantaged retirement account such as an IRA (in this case, a Checkbook IRA). The rollover can be direct or indirect.

In a direct rollover, the 401(k) administrator sends the funds directly to the new IRA. In an indirect rollover, the 401(k) holder receives the funds and must deposit them into the new IRA within 60 days. A direct rollover is usually the easier option that many people prefer.

By rolling your 401(k) into a Checkbook IRA, you preserve the tax advantages of your retirement savings and can diversify your investments beyond the limited choices typically offered in 401(k) plans. 

If you’re looking to roll over an existing 401(k) to a Checkbook IRA, it’s important to check with your current plan administrator to see if it’s possible. If you’re rolling over a 401(k0 from a former employer, you should be able to do so. If you’re trying to roll over a 401(k) from a current employer, they may or may not allow you to roll over funds.

Steps to Roll Over a 401(k) Into a Checkbook IRA

1. Open a Self-Directed IRA

You’ll start by opening a Self-Directed IRA with our sister company, Madison Trust. They are a top rated Self-Directed IRA company with thousands of positive reviews online. Your SDIRA will be the home base for your retirement funds after the rollover.

2. Establish an LLC or Trust

Next, Broad Financial will create your entity of choice, either an LLC or a trust. The entity will be owned by your Self-Directed IRA and will serve as the investment vehicle through which you complete transactions. Broad Financial helps streamline the creation of this entity to ensure compliance with IRS regulations.

3. Fund the Self-Directed IRA

You can initiate a rollover by working with your current 401(k) administrator to process either a direct or indirect rollover. It’s important to follow all guidelines to maintain the tax-advantaged status of your retirement funds.

4. Open a Checking Account

Lastly, you’ll open a checking account in the name of your newly created entity. This is where your rolled-over funds will be held when Madison Trust moves the funds from your SDIRA at your direction. You’ll use this account to place everyday investment transactions.

5. Invest

With the funds in your Checkbook IRA's dedicated checking account, you can begin placing investments. Whether it’s real estate, private businesses, or other alternative assets, you now have the autonomy to act quickly on investment decisions.

Explore the Possibilities

Rolling over your 401(k) into a Checkbook IRA offers you the opportunity to gain greater control over your retirement strategy. By expanding your investment options beyond the usual selections found in employer-sponsored plans, you gain the flexibility to invest in areas that align with your vision and interests, while receiving tax advantages. Ready to get started? Contact us today!