What is the “Pocket 401(k)?”
The IRA Financial Pocket 401(k) is essentially a Solo 401(k) in the palm of your hands. The Solo 401(k) is an IRS-approved retirement account designed specifically for self-employed individuals. No longer are you stuck in investing in the traditional assets most financial institutions offer. These are generally limited to stocks, bonds, mutual funds, exchange traded funds and the like. With the Pocket 401(k), you can invest in alternative assets, such as real estate and precious metals. In the following, we’ll detail all the advantages of the Solo 401(k) and why everyone who is self-employed should have one.
Why Choose the Pocket 401(k)?
You’re no longer tethered to your desk when making investments with your retirement plan. In fact, using the IRA Financial app allows you to cut the cord and do everything from your mobile device.
Furthermore, if you don’t have a Solo 401(k) yet, you can use the app to start one! All maintenance can be done with your device as well. IRA Financial has a working partnership with Capital One, so you know your funds are in good hands. IRA Financial is the only self-directed retirement custodian that can open your Solo 401(k) bank account. Lastly, all our retirement experts are ERISA and tax specialists who can answer any questions that may arise.
Establishing the Pocket 401(k)
An IRA Financial specialist will help you through the entire process of creating the Pocket 401(k):
First, establish your IRA Financial Solo 401(k) through our company, in conjunction with Capital One bank, right from the app. Next, it’s time to fund the new account. You can simply request a rollover from your current retirement account provider to IRA Financial Trust. The funds are transferred to your Solo 401(k) checking account. Your 401(k) specialist will help you open the plan account with Capital One.
Then, since you are trustee of the Solo 401(k), you can open the plan bank account with any bank. Lastly, you will now have checkbook control of your 401(k) funds. This gives you the ability to invest in just about anything you want, anytime you wish!
Benefits of the Pocket 401(k)
- Establish the plan and maintain it quicker and more securely than ever
- The ability to manage your account and make investments right from the app
- No need to ever step foot in a bank. IRA Financial will take care of all necessary paperwork
- Fund your plan right from the app – whether with a rollover or direct contribution
Investments You Can Make
As we touched on earlier, you do not have to make traditional investments with your Pocket 401(k). However, as with any plan, you must follow the rules set forth by the IRS. The IRS doesn’t say what you are allowed to invest in, only what you cannot. These are known as the prohibited transaction rules. In addition to our information on them, you can read more on the IRS website.
Essentially, you cannot invest in most collectibles, such as art, rugs and classic cars. Further, you cannot make a Pocket 401(k) investment involving a disqualified person. These include you, your spouse, parents and children. Unlike IRAs, you may invest in life insurance, to a certain extent.
So long as the investment doesn’t fit one of these categories, you can probably invest in it. Based on recent client surveys, here are the most popular investments being made with the Pocket 401(k):
- Real Estate (both residential and commercial)
- Precious metals, including gold, silver and palladium
- Private businesses and franchises
- Peer-to-Peer Lending/Hard money loans
- Cryptocurrencies, especially Bitcoin
- Tax Liens and Deeds
We know not everyone embraces technology, especially the older generation. However, we feel the IRA Financial app is simple enough for everyone to use! If you have any questions about the Pocket 401(k) or the app itself, don’t hesitate to contact us. You can give us a call anytime at 800.472.1043 for any reason!