What Are the Qualifications?
| Self Directed IRA | Solo 401(k) | |
|---|---|---|
| Who can open this account? | Any working or retired person. | Must be self-employed without any full-time employees. |
| Maximum annual contributions (2023) | Age<50 = $6,500 Age > 50 = $7,500 Sep IRA = $66,000 |
Age<50 = $66,000 Age>50 = $73,500 |
| Need for custodian | Yes | No |
| Entity that holds retirement money | LLC/Trust | Trust |
| Can invest in Life Insurance | No | Yes |
| Can invest in Art/Collectibles | No | No |
| Start of RMD | By 04/15 on year after 72 | By 04/15 on year after 72 |
| Minimum Withdrawal Age | <59.5 = 10% penalty taxable distribution >59.5 = tax distribution |
<59.5 = 10% penalty taxable distribution >59.5 = tax distribution |
| Required Minimum Distributions (RMDs) | Yes, (Roth- NO) | Yes, (Roth- YES) |
| Required Contributions | No | Yes |
| Availability of funds transferred | Clears via custodian, then transfers to LLC/Trust | Directly into Solo 401k account |
| Checkbook Control | Yes | Yes |
| Personal Loan from the account | No | 50% of account value up to $50,000 |
| UBIT for active investment | Yes | Yes |
| UDFI for margin trading | Yes | Yes |
| UDFI for real estate leverage | Yes | No |
| Annual Report Filings | 5498 for current account value & contributions made; 1099R if any distributions; 990T if UBIT or UDFI |
5500-EZ only if plan assets exceed $250,000. 990T if UBIT (or non-real-estate UDFI) |
| Annual amendments needed | No | Yes |
| Annual Maintenance Fee | Paid to Custodian | Paid to Broad Financial |
| Roth component ability | Requires separate account | Can have Roth & Traditional in same account |
| Can spouse/partner make contributions/use same account | No, one person per IRA | Yes, they can use the same account |
| Consequences of Prohibited Transactions | Distribution of entire IRA | Can undo PT |
| Roth component | Income restricted | Not income restricted |
| Contributions & Distributions | Into IRA | Into Solo 401k trust account |
| Placing Investments (in & out) | LLC/Trust checking account | Trust checking account |
| Can Invest in an S. Corp | No | Yes |
Schedule a call, and one of our Broad Specialists will answer any questions you may have.
SCHEDULE A CALL
Address:
One Paragon Drive
Suite 270
Montvale, NJ 07645
Phone: (800) 395-5200
Mondays – Thursdays: 8:00 am – 6:00 pm EST
Fridays – 10:00 am – 4:00 pm EST