Checkbook IRAs, Checkbook Solo 401(k)s, Checkbook Defined Benefit Plans, & Checkbook Life Insurance: Self Directed Retirement Plans That Put YOU In Control

Checkbook-control retirement accounts enable you to directly control your retirement funds using a bank checking account. This access to your investable assets provides liquidity and enables you to pursue a variety of investment strategies – that are unavailable in a traditional account – on a tax favored basis. Learn more about self-directed retirement accounts.

While there are a variety of contributing factors, the root cause lies in the fact that retirement plans have been administered by large broker-dealers whose revenues are derived from stocks, bonds, and other exchange traded securities. Therefore, those firms, and hence all their registered representatives, have reason to restrict participants in their plans to investments that are profitable for them and easily administered by them. Learn more about retirement plan rules.

Examples of permissible investments are real estate, tax liens, private lending, merchant cash advance, asset-based loans, private equity, consumer lending, and litigation finance. Examples of prohibited assets are collectibles, which includes art, rugs, antiques, metals, gems, stamps, most coins, and alcoholic beverages. Learn more about alternative investments.

While the tax code allows retirement accounts to invest in nearly all asset classes, it does prohibit certain transactions. Broadly speaking, the prohibited transaction rules prevent individuals from deriving benefit from their retirement funds prior to distribution. Disqualified persons and entities include the plan owner, members of the plan owners family (spouse, ancestors, lineal descendants and their spouses), any person providing services to the plan, any entity in which the plan owner owns (either directly or indirectly) 50% or more, and any officer, director, 10% or more shareholder, or highly compensated employee of the 50% or more owned entity described above. Learn more about prohibited transactions.

Unrelated business income tax (“UBIT”) is an income tax levied on tax-exempt entities that engage in an active business that is not related to the entities tax exempt purpose. Unrelated business taxable income (“UBTI”) is income that is subject to UBIT. Unrelated debt-financed income (“UDFI”) is a form of UBTI that is the result of a tax exempt entity using borrowed funds to finance an investment. Retirement plans, as tax exempt entities, are subject to UBIT. An important distinction between IRAs and Qualified Plans (401k plans and Defined Benefit Plans), is that Qualified Plans do not have UDFI when investing in leveraged real-estate transactions. Learn more about UBIT, UBTI, and UDFI.