Aloha from the Big Island of Hawaii. I'm here on my annual trek to total relaxation. Normally I don't do work during this 2-week break, but I have a little break from activities (strenuous ones, you know, like golf and scuba - more about this in a later email).
Sheila L. asks the following question: Any thoughts on... a Self-directed IRA versus a Solo 401k as a better method for reducing taxes while maximizine investment opportunities for retirement funds?
As always, a question like this prompts an important additional question - What are you going to invest in?
What you invest in has a huge impact on whether you should contribute to either a 401(k) or an IRA. If you are investing in real estate, it is almost always better to invest OUTSIDE of your IRA or 401(k). For more on this, see our course about investing in real estate in an IRA at http://www.provisionwealth.com/products.
On the other hand, if you are doing option trading, an IRA or 401(k) can be great, so long as it is a Roth IRA or Roth 401(k). In this case a solo Roth 401(k) is probably better, since you may be able to contribute more than you could to your IRA.
If you are investing in a business, normally you are better off investing outside of your IRA or 401(k). However, there are siutations where investing through your Roth IRA or Roth 401(k) can be hugely beneficial. If this is your situation, I strongly suggest you call our office at 866.467.5809 and schedule an appointment with us so we can discuss how to best help you. We have developed some unusual techniques for investing in business through an IRA or 401(k) that I have not seen elsewhere (I'm not talking just about using a C corp for this - there are even better ways for those of you reading this who are aware of the C corp IRA strategy).
I realize you did not really ask the question of whether to invest through an IRA or 401(k) versus investing outside of an IRA/401(k) but I would be remiss in not mentioning that sometimes you just don't want either one.
Thanks for sending such a great question. Glad you are thinking about maximizing your tax benefits.
Warmest regards,
Tom