Self Directed 401ks Give Small Business Owners Peace of Mind

Sense Financial recommends self directed 401ks and alternative investments for lower risk

At the end of August, the stock market experienced a stiff drop across all indexes, including domestic and international sectors. Many experts see it as a market correction movement that should not harm retirement portfolio in the long run. However, the occurrence called for a reassessment of the stock allocation in retirement portfolios.

Many financial advisors are now recommending higher stock exposure as the life expectancy increases. Retirees need their funds to last longer. Investing in low-interest fixed-income assets may not be enough to sustain their savings. On the other hands, overexposure in the stock market can increase the risk and even wipe out a retiree’s life savings.

To solve the issue, many investors are now looking beyond the stock market for other investment options. For example, precious metals are added to guard against inflation and increase diversity. Many investors also invest in real estate, such as rental properties. These investments can offer much higher return than bonds and mutual funds and with more predictable income and risk.

The issue is that traditional retirement plans may not allow such investment assets to be held inside a 401k or IRA. Sense Financial have received many clients who wanted to make the switch to a self directed retirement account, such as the Solo 401k plan.

With the self directed 401k for small business owners, alternative investments become available. As the trustee of the plan, the plan owners can decide how to invest their money without having to get approval from a custodian. Many took advantage of this flexibility to invest in rental properties, private lending, mortgage notes and more.

Having a diversified portfolio in different assets can greatly reduce the risks of losing everything. Plus, for real estate investments such as mortgage notes or rental properties, often the income is secured with the property itself. In the worst case scenario, plan owners can foreclose or sell the property to recover the initial investments. With proper due diligence, self directed 401ks plan owner can have a peace of mind when investing in assets they know best.

Sense Financial is California's leading provider of retirement accounts with "Checkbook Control": the Solo 401k and the Checkbook IRA. Over the years, they have assisted hundreds of clients obtain checkbook control over their retirement accounts while providing them with the ability to invest in virtually any investment class, including real estate, private lending, mortgage notes and much more without the need for custodian approval.

To learn more information about Solo 401(k) for self-employed real estate agents, please visit sensefinancial.com.