What Makes Quest a Winner?

Quest Trust Company takes first place for best self-directed IRA in a “2020 Best of Notes” held by NoteInvestor.com and placed among the top 10 self-directed IRA custodians according to Wealth Advisor’s America’s Best IRA Custodians poll. 

Each year, independent surveys are sent out to each company’s list of subscribers, with over 550 participants voting in this year’s rankings. 

Voting was based on the participant’s experience with the various custodians. Other factors such as a firm’s overall reputation, length of time in business, client testimonials, and professional peer opinion are taken into consideration, as well. 

Our History with Self-Direction

Since Quest Trust opened its doors in early 2003, the biggest goal of the company has always been to provide the highest level of customer service and educate investors about non-traditional investment options. With over 25,000 active clients and $2 billion in assets under management, Quest is one of the nation’s fastest growing self-directed IRA custodians. 

Every year, investors put thousands of dollars in to their retirement plans, yet only 2% of those funds are self-directed. Self-directed IRAs allow investors to diversify their retirement and allocate their funds to more alternative assets, like real estate or notes, while getting a tax benefit from the IRA. 

Being able to move past the stock market and traditional assets can give investors the freedom to choose investments that are most familiar to them, but most people aren’t familiar with self-directed IRAs. Quest has always been one of the leaders in providing the best SDIRA education. 

Quest Education

Quest Trust Company was able to receive these two prestigious rankings thanks to many factors, one being our exceptional level of education. From our weekly webinars and updated education center to the expert level of understanding you receive from calling in and speaking to a trained representative, Quest always provides exceptional knowledge and training. 

Our clients have shared that Quest is a “fabulous company that provides a ton of training, seminars, and special events to network and learn… All the employees are well trained and always helpful to answer any questions you might have. They are very prompt at handling all your investment transactions.”

Quest Service

Our fast funding times set us apart among other custodians, too. A 24-48 hour funding time with no fee charged to expedite the transaction, we are able to provide fast service to all. Not only do we process investments faster than half of our competitors, Quest has some of the most advanced online technologies, like the online portal and investment tracker.  

Both of these companies provide IRA investors with information about why an IRA custodian is required and what some of their options are with a self-directed IRA. They also help investors and advisors with what to look for when selecting a custodian, which is why Quest Trust Company is honored to receive these two high rankings. If you’d like to get more information about Quest and want to hear more about what sets us apart from the rest, feel free to give us a call at 855-FUN-IRAS. At Quest, consultations are always free and live representatives are always available to share options about transferring to a self-directed IRA!

Top 5 Hot Alternative Investments You Should Consider in 2021

Alternatives investments are a great way to not onl diversify, but to also get a twist on a familiar investment. Some alternative investments are brand new, and others are simply weird. The best part about using a self-directed IRA to invest in alternative assets is you don’t have to be the smartest or the richest person to invest in them. Alternative assets give everyday investors the freedom to invest in things they know and understand. 

So what are some of the hottest investments to be on the lookout for your SDIRA in 2021?

Private Companies that are Making a Difference

All across the globe, now more than ever, people are coming together for the greater good. There have been countless startup companies and small businesses that have private stock. Self-directed IRAs can easily invest into private entities with a few easy steps. The beauty of investing in a small company is that you typically don’t have to have a lot of money to get involved, and you can see the social impact your investment is having on the local economy. 

Real Estate, Real Estate, Real Estate!

We can’t say it enough. Real estate is one of the best investments you can hold in a self-directed IRA, because not only is it a tangible investment, it also has some level of security that other investments (like stock) don’t have in the event of a worst case scenario. With lockdowns and work stability in question for many, the flexibility of real estate investing allows investors the chance to start taking control of how they make money! Partnering your personal funds with your IRA funds to purchase real estate can be a great way to make money now and for the future. 


One of the most uncommon, but hottest, alternative investments is farmland. The great benefit of investing in land or farmland, is that you don’t have to have a lot of money to get started. Some investment platforms allow for a minimum investment of $10k, and there are companies that can help you understand and get started. If you have always wanted to be a rancher at heart, now is your chance!

Loan, Don’t Own!

In a study released late last year by MarketWatch, private lending was projected to grow by 30%. It is safe to say this alternative investment strategy isn’t going anywhere, and can be another top investment for 2021. Private loans are great for the investor who may have a lot going on and just wants to be passive, watching their money grow for them with interest going back to their IRA accounts. Not only are investors earning money for retirement, they are also providing an opportunity to someone who may not have been able to get a loan from a traditional bank. 

Invest in YOURSELF!

We’ve saved this for last, because it’s probably the most important one. This is the year to invest in yourself. Whether that means making a contribution and growing your account at a steady pace, investing into something that you might not have once thought about, or just taking the time to utilize free educational resources to expand your knowledge, this is the year you take control of your money goals. If you have more questions about how to get started with a self-directed IRA, give a Quest Trust Company IRA Specialist a call today at 855-FUN-IRAS

8 Important Questions to Ask Yourself Before Choosing Your Next IRA Investment

How many times have you heard the horror stories of someone jumping into something before doing the proper research or planning? Way too often this happens in the world of investing. The stock market will have a winning day, social media will buzz, and the next thing you know everyone wants to start investing with their IRA. So how do you know which investment is right for you? 

There are thousands of investment possibilities out there and each one has its own benefits to offer, but sometimes narrowing down which one is best for you can be confusing and overwhelming. Whether you’re just getting started or you’re a seasoned investor, the following remains true: no one wants to lose money because they jumped into a bad investment too quickly. Take the time to ask yourself this set of question to ensure you’re investing in the best possible assets for your goals.

  1. How much are you looking to diversify? First and foremost, decide how much you’re looking to diversify your portfolio. Most people think that diversification simply means spreading your funds across multiple different stocks, but it actually goes much further. There are certain investments that are public, meaning these are openly traded on the stock market, and there are also privately held assets which you can invest into using a Self-Directed IRA (SDIRA). Not only can diversifying your assets give you more security since your nest eggs aren’t all in just one basket, it can also give you the freedom to invest in assets you may not be able to at a more traditional custodian. 
  2. What investments interest you? –Think about what investments excite you and peak your interest. You don’t want to invest into something that you don’t necessarily like. Choosing an investment that interests you will give you more incentive and make you more excited to hold it. SDIRAs give investors options to invest into things that may interest a wider variety of things like real estate, oil and gas, or a vast multitude of private companies, which can be a great benefit. 
  3. What investments are you knowledgeable about? This one is important. Take a moment to think about investments that you know a lot about, or are interested in learning more about. Typically, these investments are going to be the ones that give you better returns. Wall Street investors make so much is because they know how the stock market works really well. Investing into the things you’re knowledgeable about will more likely than not give you better returns than if you were to invest into something you don’t understand.
  4. Can your IRA hold the type of investment you want? Not all IRAs are created equal! As mentioned above, there are certain custodians that hold public investments and others that hold private investments such as real estate. You’ll first want to determine which one is best for you. The good news is that the only thing that the IRS says that you cannot invest into are collectibles like art and life insurance contracts. That means there is an almost endless list of possibilities you CAN invest into with a Self-Directed IRA. It’s just important to understand the people you can and can’t do business with if you choose to hold a private investment in your SDIRA. 
  5. How much money do you have? Here is where we get technical. You have to ask yourself the obvious question: how much do you have to work with? It goes without saying that in order to invest you have to have money to invest with, but even if you’re just starting with a small amount of money, the investment possibilities are endless. There are even some strategies such as partnering that can help you grow your money now and for the future at the same time. Figure out how much money you can put towards an IRA each year, and you’ll quickly see how fast your account can grow when you put your money to work. 
  6. How much effort do you want to put into investing? Often times, people don’t understand how much time and effort can sometimes go into Self-Directed investing. Decide how much of yourself you are willing to give to your investments, and this will help you figure out which one might be a good fit for your lifestyle. There are those who want to dedicate a lot of their time to their SDIRA investments and others who don’t. Real estate has proven to be a great investment for people who can dedicate the needed time and effort that involves buying and selling properties. On the other hand, for those who may not have as much time to spend, a more passive approach like private loans or note investing can be a great option.
  7. What investments are you comfortable holding in your IRA? Understand that purchasing an investment isn’t the same as purchasing something from the store; you can’t just return it if you don’t like it. Before picking your investment, ask yourself if it’s something you’re comfortable holding. Does it sit right with you ethically? If something happened and you had to assume unplanned responsibility, would you feel okay with that? Don’t find yourself wishing you had thought about those things after it’s too late.  
  8. Do you know your timeline? This last one is something that often gets overlooked, but should be amongst everyone’s considerations. Determining how long you’re comfortable holding your investment can help shed light on which ones might be better suited for you and your IRA. Some long-term investments can lock your money in for a certain amount of time, which may not be the best option for you. This isn’t always necessarily a bad thing, especially if your goals are to create wealth for your future retirement. If you’re not looking to commit to something long-term, picking an investment that can produce a quicker return may be a better choice. 

Investing should always be a positive thing, which is why it’s important to think about your next investment before making your move. It’s always better to spend more time on the front end doing a little bit of preparation rather than wishing you had later down the road. If you ever have questions about a potential investment or want to open a SDIRA so you can do your first deal, give a Quest Trust Company Certified IRA Specialist a call at 855-FUN-IRAs (855-386-4727).

Fair Market Valuation Basics

The beginning of the year is a special time of the year for self-directed IRA owners. FMV season. Each year, they begin gathering information regarding the value of their investments, which are called Fair Markets Values, or “FMVs”. Submitting Fair Market Values to show the worth of the assets they hold in their IRA accounts is one rule Self-Directed IRAs must follow every year.

What is a Fair Market Valuation?

Fair market valuations (FMVs) are values required by the IRS for the worth of assets in your retirement account.  FMVs are required to be reported to the IRS by the Custodians each year, making it very important to submit this information. Custodians will require this end-of-year estimate for each individual asset in the IRA, and it will typically require supporting documentation, as well. 

Why Am I Required to Submit an Fair Market Valuation?

Not only are Fair Market Values important for determining the total value of your IRA for the IRS, they also help you determine other useful information about your IRA, too. For those who have to take distributions, Fair Market Values help determine the required minimum distributions for the year. Fair market values are also often utilized in taxable situations like a Roth Conversion or an asset distribution.

What Do I Need for a Fair Market Valuation at Quest?

Most Fair Market Values will require supporting documentation be submitted along with an internal custodian form that contains your signature. There will be different requirements the custodian will ask for depending on what type of asset is held in the IRA.  As a Quest client, you will be required to submit your Fair Market Valuations for the assets in your account, or have Quest take care of this for you at a small fee. 

Supporting documentation is important. Real estate investments will commonly require an appraisal, broker’s price opinion, or county appraisal value, whereas private entity investment need a balance sheet or letter from the managing member, trustee or operator which states the value of the asset. Some investments, like interest only promissory notes, simply require the unpaid principle balance. 

FMV checklist:

  • Individual valuations for each asset in your IRA – FMVs to be submitted to Quest Trust by January 15th each year.
  • Values assigned as of December 31st of the tax reporting year.
  • An independent, neutral party has completed a third-party valuation.

As a Self-Directed IRA owner, understanding FMVs and why they’re required for all account holders is necessary. Make sure you are compliant with IRS rules and submit your yearly Fair Market Valuations!

Not only will it help you see how your assets performed for the year, but it can also help influence your decisions on future investment deals. If you need help submitting a Fair Market Valuation, give us a call at 855-FUN-IRAS or email our FMV team at FMV@QuestTrust.com!

Plan Asset Regulations

Creating the biggest bucket of wealth for retirement with your self-directed IRA doesn’t just come from doing good investments. It also comes from understanding how your IRA works so you can utilize it to the best of its abilities. Learning about the freedom IRAs have is important, but knowing about their certain rules, as well, is equally as necessary. 

Plan Asset Rules 

IRAs not only follow the guidelines put in place by the IRS, but they also listen to the Department of Labor or “DOL”. A very important term called Plan Asset Rules is a set of criteria that was put in place by the DOL to limit an investor from using his or her retirement funds to transact with their own investment fund or assets. 

These Plan Asset Rules define when the assets of a certain entity are considered assets that belong to a 401k or IRA. According to these Plan Asset Rules, if an account holder owns more than a 25% of an “investment” company, the profits and assets of that entity are considered assets of the IRA or other certain accounts. This concept is sometimes referred to as the Look-Through Rule.

This means that if your IRA owns a quarter or more of the membership interests of a LLC engaged in passive investments like hedge funds or real estate funds, the assets of the company can reasonably be considered the property of the retirement account.

If the Plan Asset Rules cause the assets of an investment company to be deemed to be assets of the IRA/401(k), any exchange involving the investment company and someone who isn’t allowed to participate (known as a disqualified person) will be a prohibited transaction. 

Plan Asset Rules can come into play if:

  • 100% of an “operating company” is owned by any combination of IRAs or 401Ks and disqualified persons. If this happens, all of the company’s assets are deemed plan assets and they belong to the IRA or 401K.
  • 25% or more of an “investment company” is owned by IRAs or 401Ks and disqualified persons. Similarly, if this happens, all the assets of the “investment company” are deemed Plan assets (assets of the IRA/401(k)). When the DOL determines whether the 25% mark is met, all IRAs/401(k) owners are considered, even if they are owned by unrelated individuals.

Way to get around Plan Asset Rules?

There are exemptions to the Plan Asset Rules. The Plan Asset Rules do not apply if the entity is an “operating company” (which refers to a partnership, LLC, or other business structure in which the main goal and method of money-making is via venture capitalism, real estate investments, or making or providing goods and services) or if partnership interests or membership interests are available to members of the general public. 

In other words, if an IRA or 401(k) Plan owns less than 100% of an LLC that is engaged in an active trade or business, the Plan Asset Rules would not apply. The investment could still be treated as a prohibited transaction and potential Unrelated Business Income Tax could still apply.  

How does it affect my IRA?

Plan Asset Rules affect everyone, but most investments involving IRA funds will not kick in the Plan Asset Rules. The Plan Asset Rules are usually only triggered if the IRA or 401(k) Plan assets will own greater than 25% of an investment company (i.e. a passive investment fund) or will own 100% of an operating company, like in the examples above.

There can be serious consequences to violating the Plan Asset Rules. If your self-directed IRA or 401k investment involves an investment that violates the Plan Asset Rules, all of the assets of the entity will now be owned by the IRA or 401K, meaning all transactions between the investment entity or its assets and a disqualified person may be prohibited.

Plan Asset Rules are important for any investor looking to self-direct. To get more information about Plan Asset Rules, our Certified IRA Specialists are happy to help! For more questions, give us a call at 855-FUN-IRAS (855.386.4727).

2021 Contribution Limits: IRAs and Beyond

Self-Directed IRAs (SDIRAs) are some of the best vehicles when it comes to receiving tax benefits when we use them to invest. Common ways to fund an IRA are by using methods such as rollovers from previous employers or transfers from other IRA accounts, but personal contributions may also be another way to help these accounts grow. 

Although it would be nice to contribute as much as we wanted, every year specific limitations are set by the IRS on how much money individuals can contribute to their IRAs and other tax advantaged retirement accounts. Now that the 2021 contribution limits have been announced, we’ve listed those limits here for you.  

Personal Plans

Traditional and Roth IRAs are both considered personal plans, and often follow similar guidelines on their limits. For 2021, the contribution limits for Traditional and Roth IRAs remained the same as 2020, but some other accounts did see an increase. 

The 2021 contribution limit for Traditional and Roth IRAs is $6,000, with a catch –up contribution of $1,000 ($7,000 total) if you’re age 50 or older. In order to make a contribution to these two accounts, one must have “earned income”. Earned income includes money such as wages, salaries, bonuses, commissions and self-employment income. Disability retirement benefits can also be considered earned income in some cases. 

Anyone can contribute to a Traditional IRA if they have earned income, but in some cases, you may not be able to directly contribute to a Roth IRA if you make too much money. Certain limitations have been placed on Roth IRAs that state if your income exceeds a specific amount, you are ineligible to directly contribute. 

2021 Traditional IRA Deduction Limits
2021 Roth IRA Income Limits

If you find that you do make too much money in 2021 to contribute to a Roth IRA directly, there’s always another option. A “Back Door Roth Conversion” could allow you to fund a Traditional IRA by making a non-deductible contribution and then convert it to a Roth account afterward, allowing you the benefits of a Roth IRA. If you have questions on Roth Conversions, don’t hesitate to contact one of our Certified IRA Specialists.

Remember. You are never required to contribute the maximum amount allowed, but in order to contribute up to the contribution limit, you must have enough earned income to cover the contribution you make. 

Employer Plans

Traditional and Roth IRAs are not the only plans with contribution limits. Self-employment plans are also subject to potential income changes. Retirement accounts such as the SEP IRA, SIMPLE IRA, and Solo 401(k) contribution limits were also reviewed for 2021. 

For SEP IRAs, the IRS increased the limit from $57,000 in 2020 to $58,000 for 2021. Like the SEP IRA, Solo 401(k)s followed the same pattern. The Solo 401(k) salary deferral amount stayed the same at $19,500 but the defined contribution maximum limit increased from $57,000 to $58,000, with an additional $6,500 catch-up contribution ($64,500 total) for those 50 or older. 

The Savings Incentive Match Plan for Employees, also known as the SIMPLE IRA, is the final employer plan offered at Quest. This account, often used by small businesses, did not see a change for 2021. The contribution limits for SIMPLE IRAs remained the same for 2021, which means employees under 50 can contribute up to $13,500, while those 50 and over get a $3,000 catch-up ($16,500 total). 

SIMPLE plans typically require the employer to match each employee’s salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee’s compensation, also. For more information about employer matching contributions and any 2021 changes, visit the IRS website on SIMPLE IRAs. 

Special Plans

Health Savings Accounts (HSAs) and Coverdell Education Savings Accounts (ESAs) are the two final tax-advantaged accounts that Quest offers, both which follow the IRS contribution rules and guidelines. For these accounts, when you take the funds out for qualified medical or educational expenses, the distributions are tax-free! So, how much can you put contribute to them in 2021?

The annual limit on HSA contributions for 2021 saw a minimal increase. It will be $3,600 for self-only and $7,200 for family coverage, which comes out to be right around a 1.5% increase from limit in 2020. For those over the age of 55 or older, there is an additional $1,000 that can be contributed to the account. 

Minimum deductibles for HSAs saw no change for 2021, yet maximum out-of-pocket amounts did increase by $100 for individuals with self-coverage. It increased by $200 for those who have family coverage.

Lastly, the Coverdell ESA has a contribution limit of $2,000 per year per child. This means, each child in one household could each receive a $2,000 contribution to their ESA per year. There was no change from 2020 to 2021. 

Key Takeaways

Although each plan works a little bit different, the existence of a contribution limit remains a similarity. Understanding contribution limits will not only allow you to maximize your retirement account each year, it will also help you grow you future wealth faster! For more contribution questions, check out the helpful chart below or call an IRA Specialist at 855-FUN-IRAs (386.4727) and start preparing for your 2021 contributions!  

2021 IRA Contribution Limits

In Kind Transfers: How They Work and When to Use Them

Opening a brokerage account and beginning to invest in assets can help individuals grow their wealth and save for retirement. According to information from the PEW Research Center, over 50 percent of U.S households are currently invested in the stock market. 

Brokerage accounts give individuals the ability to buy and sell securities on the financial markets. Investors will deposit money and instruct the broker on what assets to buy or sell. But, what happens when you want to transfer to a different brokerage? 

Selling your equity can get expensive with all the taxes and fees, luckily there’s another option – in kind transfers. Keep reading this guide to learn more about in kind transfers and when you should use one.

What Are In Kind Transfers?

When it comes to transferring assets, you have a few options, either you can sell your investments and transfer the remaining cash balance to a new brokerage, or you can use what is called an in kind transfer. 

Individuals will transfer to another brokerage for a number of reasons, including:

  • Lower fees
  • More variety
  • Minimum requirements
  • Better service 
  • Promotions

An in kind transfer doesn’t involve any selling – it’s simply just moving your investments from one brokerage to another. This is as opposed to doing a cash transfer, where you sell out of your positions and simply open a new account. However, selling out of investments can be costly with added taxes and fees.

How it Works

Transferring assets to another brokerage is a fairly straightforward process. It involves first selecting your new brokerage and opening a new account with them. Then, gather your account statement so you have all the information you will need at hand. 

Depending on the brokerage you ultimately decide to go with will determine how you proceed next. Most online brokerages have a fairly straightforward process for transferring your investments. Keep in mind it can take time for your funds to transfer over after you initiate it. 


There are several reasons why investors would consider doing an in kind transfer rather than a cash transfer. The most significant benefit is not having to sell your assets and liquidate them. 

The problem is when you sell investments you’re subject to capital gains taxes and other fees that can take a percentage of the gains you have made, leaving you with less to invest when your funds are transferred over. Another reason investors take this route is that once you sell your initial investment, there is no guarantee you will be able to purchase it at that price again – you may have to pay more. 

For example, say you hold 100 shares of Apple with an average price of $100. You decide to switch brokerages and sell out of your positions. Between the time you sell your shares and open a new account, the price of Apple stock may already be $115, meaning you missed out on $15 per share.

Looking to Open a Brokerage Account?

It’s recommended to start saving for retirement as soon as possible. The more time you give for wealth to accumulate, the better results you will have. If you find yourself needing to transfer assets, remember in kind transfers can save you much needed time and money.

If you are looking to open a retirement account, contact a Quest IRA specialist today, and we can help get you started on a path towards financial freedom.

The Value of Gold Family

Fees. It is never a fun subject to discuss, but they are something you’ll run into any time you choose to self-direct your IRA into privately held assets. Whether fees range on the higher end or the low end, knowing what to expect from the fee option you choose and understanding all your choices is important. This way, you can make the best decisions for your investment plan.   

Not all fee plans are created equal! Some options work better for others, considering factors like the number of assets or the value of an account, but one fee plan that has provided the most value to our clients is the Quest Gold Family plan. For the active investor that doesn’t want to deal with a fee for each transaction, the all-inclusive Gold Family Plan is the one people turn towards. Encompassing nearly all transactional fees except for a handful, the Gold Family plan makes it easy and inexpensive for an active family of investors to self-direct their investments. 

What is the Gold Family Plan?

At Quest, we offer different options for investors depending on the investments they plan to do. The third administrative fee option available with Quest Trust Company is the Gold Family plan, which allows up to 10 accounts (those belonging to you or your immediate family) to be covered by the single fee package. One of the great benefits of this option, is that clients don’t have to worry about most overhead fees that would be expected with most custodians.

By being on the Gold Family plan, many of the fees are already included in the flat annual fee. Fees like transaction fees, check fees, and account opening fees are just a few examples of expenses that would be included. Not having to worry about which fees are associated with each transaction makes the Gold Family plan highly sought after for those who plan to be active investors with their SDIRAs. 

The True Value of Gold Family

We all want to get the best deal, but there is more to “value” than just saving money! With the Gold Family plan, not only do you get benefit from the fee savings, you also get a special level of customer service designed specifically for our Gold Family members. 

The Gold Family Department was created to provide a “Gold Member Concierge” service, to ensure business is handled properly and in a timely manner for Gold Family member accounts, providing the highest level of value and exceptional customer service. Not only do these members have access to a select group of representatives available to assist with any questions, they also have a personal email they can send any requests or concerns too. 

Becoming Part of the Gold Family

Making the switch to the Gold Family option is quick and easy! If you would like to look over the fee structure in more detail to see the true value of this plan, you can access our Fee Schedule by clicking here!

For more information about getting started, you can always reach out to a Quest Trust IRA Specialists by emailing IRASpecilaists@QuestTrust.com.

What Is a SEP IRA and How Does It Work?

Have you talked to your friends lately about their retirement plans? Many people today have started investing and saving for retirement by utilizing IRAs. We all need to know how this works. 

Don’t be left out when it comes to understanding different accounts, funds, and prospects. You may be interested in a Simplified Employee Pension or a SEP IRA. If you do not know what this is, you are in luck. We are here to help! 

What is a SEP IRA?

Exactly what is a SEP IRA? If you are like most people, understanding how an IRA works may be a daunting task. You need experts who do this all the time and will help you gain knowledge to take care of your IRA or trust. 

In simple terms, a SEP IRA is a savings plan. As a self-employed individual, this is a plan you can set up for yourself or small business. You make tax-deductible contributions to your employees’ plans. Employers make contributions but employees make the decisions on how the IRA is managed.

A great thing about having a SEP IRA is that they have higher annual contribution limits than standard IRAs. Additionally, these accounts are easy to set up and the costs of administration are typically quite low.

Who Can Have a SEP IRA?

Not everyone can participate in a simplified employee pension. You have to be at least twenty-one years old and you have to work for your company for three years. That is the rule of the IRS. 

Individual companies can be less restrictive but not more restrictive than what the IRS allows.  Employers can decide to exclude certain types of employees from the program, such as union workers. 

Importance of Getting Started

Sometimes the hardest part of retirement is getting started. Many people fail to take this vital step and continue to put it off. The best way to add funds to your retirement is to open an account today. 

If you have a self-directed IRA set up, you might be more likely to contribute money to it. It is like a garden you plant and want to watch it grow. Like that garden, your retirement account takes time to grow. 

Why a SEP IRA Is a Good Option

When it comes to different types of IRAs, things can be confusing. By choosing a simplified employee pension employers can contribute more money. Since all employees have to receive the same contribution, a SEP IRA is mostly used by small companies with no or few employees. 

This type of plan lets employers contribute to their employees’ retirement as well as their own. It is a traditional IRA and follows the same general rules as other traditional IRAs. 

The Time Is Now

If you have been thinking about starting a SEP IRA, now is the time to take the plunge! The longer you wait the less money you will contribute. This means the results of your retirement could be much less than you need or want. 

Options for retirement can seem confusing but they don’t have to be. Contact a Quest IRA specialist today and let us show you how we can help!

How Solo 401(k)s Work

Since the creation of the Solo 401(k) in 2002, self-employed individuals and small business owners have been able to utilize these accounts to grow their retirement wealth exponentially. 

The Solo 401(k) is one of the most powerful IRA accounts to self-direct and has many financial benefits. These advantages include exemptions from certain Unrelated Business Income Tax (UBIT) and the ability to have checkbook control. 

While the Solo 401(k) may be very beneficial to some, it is critical that you understand all of the qualifications and maintenance required by a 401(k) before deciding to open the account at a financial custodian.

To establish a Solo 401(k), certain qualifications must be met. An individual must be either self-employed, a company owner that receives W-2 wages, or an individual with no common-law employees. Once these requirements have been met, you can start to take a look at whether a solo 401(k) is the best option for you. 

Benefits of a Solo 401(K)

Solo 401(k)s are powerful investments and wealth-building vehicles. Some of their advantages include:

Checkbook Control:

Maintaining this type of checking account allows for check writing authority by the trustee. Using a 401(k) is a great way to obtain checkbook control, without the dangers of the IRA LLC Checkbook Control model that has come under fire recently. 

Larger Contribution Limits:  

The business owner wears two hats in a Solo 401(k) plan: employer and employee. Contributions can be made to the plan in both capacities, allowing up to $57,000 in contributions for 2020. 

Loans to yourself: 

Unlike with your IRA, you can borrow money from your Individual 401(k). You are able to loan yourself the lesser of 50% of your account balance or a maximum of $50,000. Loans are based on a 5-year amortization at market rates.

Exemption from UDFI:  

One of the major benefits of real estate investing through your Individual 401(k) is the exemption from Unrelated Debt-Financed Income (UDFI) taxation.

Disadvantages of a Solo 401(K)

Conversely, there are some serious potential disadvantages that come along with maintaining a Solo 401(k). Some key dangers to be aware of while evaluating your need for a 401(k) include: 


In order to legitimize a newly established 401(k), the employer or employee must make a contribution for the tax year in which the account was established. See IRS Publication 560 for minimum funding requirements.

Reporting requirements:

The account holder has sole responsibility when it comes to tax reporting requirements. A 1099-R must be filed if any distributions are taken from the 401(k) and a 5500 or 5500EZ must be filed once the account value reaches $250,000+.

Dangerous responsibility:

Your transactions are not overseen by your custodian, allowing more room for potential trouble or prohibited transactions. 

Record keeping:

Careful record keeping must be kept for the multiple accounts held in the 401(k). Often time this bookkeeping is tedious, so it’s important to make sure good records are kept. 

In Summary

The Solo 401(k) is one of the most powerful retirement accounts you can have, and understanding how they work is the first step in deciding if it’s the right investment strategy for you. 

For all of your further Solo 401 (k) questions, please feel free to call a Solo 401(k) Specialist at 855-FUN-IRAS (855-386-4727). Click here to view our Solo 401k FAQ page.