Self-Directed Solo 401(k) FAQs

What is a Self-Directed Solo 401(k)?

At Rocket Dollar, you can open a Solo 401(k) account. You will manage your own investments and have the ability to invest beyond stocks and bonds with high contribution limits.

A Solo 401(k) is a retirement plan for business owners who have no other full-time employees other than the owner and, if married, their spouse. A Self-Directed Solo 401(k) plan is ideal for those who generate self-employed income and are interested in generous contribution limits that can grow tax deferred. Those with an S-Corp can open a SEP-IRA at Rocket Dollar.

For 2018, the total contribution limit is $55,000, with a maximum employee contribution of $18,500 and $36,500 from employer contributions.

For 2019, the total contribution limit is $56,000, with a maximum employee contribution of $19,000 and $37,000 from employer contributions.

Compared to an IRA, the annual contribution limit of a Self-Directed Solo 401(k) is 10 times that of IRAs.

 

You can also take out loans from a solo 401(k) and pay back your retirement plan.  These loans come out as unrestricted cash, not retirement dollars, and thus do not have any restrictions of prohibited transactions or prohibited investments.

The Self-Directed Solo 401(k) Structure

Traditional and old 401(k) Roth Dollars flow into the plan, then a trust, then a trust bank account to give you checkbook control over your investments. 

 

Solo 401(k) Funding (1)

 

Read more about our Self-Directed Solo 401(k)