Top 5 Solo 401 K Investments for Self-Employed

Solo 401 k tax benefits

Solo 401 k is one of the best retirement plans for self-employed not just because of its tax benefits and retirement cover it offers but because of the wide investment opportunities it provides. All of this along with complete control over your investment and no need of consent from the custodian. There are over a dozen investments that are allowed within your solo 401 k; however, some outmatch others and we are going to discuss them.

Real Estate

There is no doubt that real estate is one of the top choices among all the available investment categories. As per the IRS rulings, you can invest in real estate land and it is as simple as buying a property with a check. The property gains are tax-deferred and in case you have a Roth solo 401 k plan, you can enjoy all the profit at the time of retirement. Any profit that you make on the property goes directly into your retirement plan.

Investing in Private Businesses

Do you pay attention towards private business and invest in them? You are free to purchase a part or interest in a private business. However, make sure to keep IRC 4975 ruling and avoid Disqualified Person or any Prohibited Transaction in your way. You should ask for professional help and get the best possible solo 401 k tax structure for your investments.

Investing in Foreign Currencies

Investors made a considerable amount of money by investing in the Japanese Yen over the past few years. Are you interested in foreign currencies? The good news is that you can invest in foreign currencies with your existing solo 401 k plan. Foreign currency investments are known for earning opportunities and the advantage of liquidity over other investments. Your Forex gains are tax-deferred until distribution and tax free for Roth solo 401 k plans.

Tax Liens

You can purchase tax liens and tax deeds with your solo 401 k. Any profits generated out of your purchase are tax-deferred and you can pay taxes at the time of distribution (70 years age or earlier). You get Checkbook Control with your plan, which allows you to invest pretty much anytime you see an investment opportunity.

Investing in Coins and Precious Metal

Precious metals and coins have offered a hedge against inflation and other market nightmares. They tend to increase in value with the rate of inflation, which makes them an idea investment. You can even deposit them against the name of your solo 401 k in a safety deposit locker.