What investment options are available if you want to self-direct your 401k plan?

There is no limit to what investment options are available inside a self-directed 401k plan, withstanding a few prohibited investments. According to the Internal Revenue Code (IRC) retirement accounts cannot be invested in life insurance contracts, a S-corp, or collectibles. These are considered prohibited investments. Excluding these prohibited investments, the plan participant can invest in anything that is allowed in the plan documents. Here are some examples of what some people consider investments for their 401k plan:
  • Real Estate
  • Tax Liens
  • Private Mortgages
  • Farmland
  • Timberland
  • Air Space rights
  • Mineral rights
  • Precious metals (gold and silver)
  • Private businesses or Franchises (LLCs or C-corps)
  • Private Equity or Venture Capital
  • Medical Equipment leasing
  • Horses
  • Livestock
  • Payday Loans or Title Loans
  • Your creativity is virtually your only limitation.

    Do you have to use the investments provided by the Group 401k?

    No. We will add any prudent investment option you want added.

    How can you self-direct your 401k?

    You will manage your self directed investments through the Charles Schwab Personal Choice Retirement Account Platform.

    How can your company offer additional choices to your employees?

    If you are a plan trustee / owner for your company, then you have a lot of control over what you choose to offer to the plan participants. There are some suitability requirements which you must follow, but overall there is a lot of flexibility in the plan choices which can provide the employees a high-quality self-directed 401k option.

    In addition to a self directed 401k plan, you can also consider a secret retirement plan that your advisors have never told you about. This retirement plan is called a defined benefit plan.

    How can you use your 401k or IRA to start a business?

    A 401k plan can potentially be used to invest in a new business, although the method of doing this is complicated. It also requires that the person works with a professional who fully understands the details of making this investment properly in order to prevent creating a prohibited transaction.