The Solo 401k can invest in almost anything, from Real Estate to traditional stocks and bonds to cryptocurrencies like bitcoin to private mortgage notes and lending.
Contrary to the vast majority of 401(k)s and even Solo 401(k)s, a your Solo 401(k) can invest into anything allowed by law. Our plan documents don’t place any additional restrictions on your activities. This leaves you free to invest in real estate, private businesses, mortgage notes, and more. The acquisition of traditional assets such as stocks, bonds, and mutual funds is also permissible. The main restriction is on “self dealing” which means you cannot direct your Solo 401(k) to transact with (or benefit) you or most of your family members. Such a transaction is called a prohibited transaction.
What EIN (business or Trust) do I use when I’m doing transactions with my 401k Trust?
The 401k trust has its own EIN (or employer identification number) and this is different from any EIN or taxpayer ID for the employer that adopts the plan. When you are transacting with your 401k trust, you will use the 401k trust EIN as the taxpayer ID.
Can I open a brokerage account?
Your Solo 401k can have a brokerage account, and we're happy to hep you set one up. You will use the 401k trust name and 401k trust EIN when opening the brokerage account. The account will be funded with money from your 401k trust (usually the checking account you have at the bank in the name of the 401k trust).
What about real estate?
The process to purchase real estate (as well as other assets) with your Solo 401(k) is fairly simple. There is no special real estate contract needed for retirement account purchases, for example. The main difference between purchasing an asset with the retirement plan and purchasing an asset in your name personally is that the buyer on the contract (or any other paperwork) will be the Solo 401(k) trust instead of you. Any earnest money deposits and expenses will be paid by the Solo 401(k) trust. All assets purchased by the retirement account will be titled in the name of the Solo 401(k) trust.