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Can I invest my self-directed 401k funds in public stocks and mutual funds?
A self-employed individual with no full-time w-2 employees working for the business may open a Solo 401k.
Whether the solo 401k funds can be invested in a particular investment depends on two factors: (i) what’s allowed under the 401k rules generally and (ii) what’s allowed under the Solo 401k plan document
A solo 401k plan is a legal entity (i.e. it is a retirement trust where the assets are held in trust for the future benefit of the solo 401k owner).
While some solo 401k plan limit what the Solo 401k plan assets can be invested in, our Solo 401k plan documents allow for whatever investments are allowed under the 401k rules.
Moreover, we help our clients open accounts for the solo 401k at the bank or brokerage of their choice.
As such, even though the account for the 401(k) might be at Schwab, which of course that means the Solo 401k funds may be invested in stocks, mutual funds, ETF’s, etc. but can also be invested in alternative investments such as real estate, crypto, notes, private placements, etc.