Once you have a retirement plan in place, investing is easy. You can set up automatic transfers to build up wealth without even thinking about it. You can sit by and watch your investments grow year after year. You can enjoy the comfort and security of knowing that your financial future is well in hand and well prepared for. Using tools like the Self Directed Solo 401k, this is a piece of cake.
The problem is, not many people have a retirement plan in place. We at AmericanIRA.com understand that many people come to our site because they don’t have a plan in place. They come here because they want to read about different retirement accounts and learn how they can seize control of their financial destiny. That’s why we make the process of starting up an account like a Self Directed Solo 401k as easy to understand as possible. All you have to do is complete the following steps:
- Know your Self Directed Solo 401k eligibility.
You can check out our comprehensive web page on these types of accounts to better understand your eligibility for an account like this. We’re not going to rehash the benefits of this specific 401(k), because we assume that if you’ve come to this article, you already have some knowledge about what they are.
But you will have to understand your eligibility if you’re going to proceed. That eligibility includes:
- Being self-employed;
- Not employing anyone full-time, save for a spouse;
It’s important to know these basics before you even think about continuing.
- Open your account.
Complete a Solo 401(k) Application Kit to get the process of opening an account started. These kits might sound intimidating, but they typically ask for only the information required to establish your eligibility, your identity, and the like. Obviously there will be some initial capital (read: investment) needed to start up the account, but this can often be accomplished through the following steps.
- Transfer your funds, tax-free.
Completing a Transfer Form (usually Trustee to Trustee Transfer from like plans) will allow you to put some funds you have saved for retirement into the new account. You can complete a rollover form to make sure that a rollover is effective and complete. You’d be surprised at how easy this is to accomplish, even though many people unfamiliar with retirement investments can have trepidations at first.
- Select an investment.
In a Self Directed Solo 401k, you’ll have a lot of freedom here. There are, in fact, many investments for you to choose from because the IRS allows you many different investments within your retirement accounts. You’ll want to do some research before completing this step, making sure that you’re investing in something you believe in, and something that will help you provide yourself with financial security for many years.
- Submit the paperwork for your chosen investment.
Limited Liability Companies, Secured Notes, Precious Metals—each of them will require paperwork so that your investment is on the books.
- Payment Authorization Forms.
Completing a Payment Authorization Letter will help you manage the expenses related to the asset you’ve chosen.
- Deposit income generated from the asset requires a Deposit Coupon.
Completing a Deposit Coupon form might sound scary, but it’s a straightforward process.
If you’re unsure about any of these steps, be sure to read through them at our Self Directed Solo 401k guide. If you have questions about this type of account, be sure to call us at 828-257-4949 to learn more about how you can build a better retirement for yourself.