Reason why Solo 401k or Individual 401k is sometimes called IRS Solo 401k

A solo 401k is commonly referred to as  ” IRS Solo 401k  ” because all solo 401k plan documents must be reviewed and approved by the IRS through the issuance of a determination letter.

A Solo 401k is also referred to as an “IRS Solo 401k” because on the IRS website you can find specific language that confirms the business owner can act as trustee of his or her own solo 401k plan.

Here’s the link to the IRS web page containing language with respect to who can act as trustee of a Solo 401k plan.—Plan-Sponsors—Starting-Up-Your-Plan

And here is the specific language regarding the solo 401k business owner serving as trustee of his or her own self-directed solo 401k.

IRS Language
“Trusts and trustees. 401(k) plans are funded through a trust established to hold and invest the plan’s assets. At least one trustee is appointed to have responsibility for the activities of the trust and its assets. This is a serious responsibility with considerable potential for liability. Trustees might include the business owner, an employee, or a financial or trust institution.”

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>


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