In our last blog post, we dived into the reason to invest in the market. Today, Wealth CAP, a unique investment platform incorporating access to traditional market investments, alternative investments, and safe investments, explores Self-Directed 401k’s in the small business market space. Contact us today to learn more!
THE BIRTH OF THE SELF-DIRECTED SOLO 401(K)
In 2001 Congress amended a self-employment law that allowed for the establishment of the Solo 401(k). It was designed for employers who have no full-time employees other than their spouse. The law allowed for both a brokerage Solo 401(k) and a self-directed Solo 401(k). The self-directed Solo 401(k) offers greater investment options than the traditional brokerage version, including real estate, oil & gas, precious metals, private loans, cryptocurrencies, and private business investments.
SELF-DIRECTED LEAP FROM SOLO TO SMALL BUSINESSES WITH EMPLOYEES
In order for small businesses with employees to offer a self-directed 401k plan, they must find a custodian willing to:
- create an open-architecture 401k plan and do the complex reporting required under ERISA Law.
- have a prototype plan document that supports allowing all investments permissible under ERISA Law; ie: market investments, alternative investments, and safe investments.
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