Self-Directed 401k and the Controlled Group Rules

QUESTION: I currently own one corporation (sub-s) and have employees.

If I start another corporation for another business, and it doesn’t have employees, can I use the solo 401k option for me and my wife?

Thank you,

Travis P. in Arizona

ANSWER: No because of the 401k controlled group rules. The control group rules essentially require that all businesses owned be taken into account when determining if full-time employees are present; if so, a solo 401k may not be established and instead a 401k for full-time employees must be adopted.

However, we do offer a self-directed 401k for businesses with full-time employees that may be invested in alternative investments such as real estate. Please call us at 800-489-7571 for a price quote.

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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