Self-Directed Investor Society News Feature: Can Self-Directed Retirement Plans “Buy the Dip” in Stocks?

Tim Berry is a self-directed IRA and 401(k) attorney with more than 20 years' experience working with self-directed investors. He serves as legal counsel for SDI Society, and we are honored to have his timely commentary on this topic. 
 
As I'm typing this the market is down well over 20% from the beginning of the year.

A direct result of this market is that my phone and email are being blown up by our clients. Their main question is if their self-directed retirement plan (that includes self-directed 401ks as well as self-directed IRAs) can invest in the stock market.

The simple answer is of course.

The beauty of a self-directed retirement plan is that you are free to invest in almost anything that you want to. Not only can you make money on real estate and hard money loans, but you can bet the airlines and cruise lines are going to get bailout money to buoy their stock prices as well.

The actual steps are easy.

In the case of a self-directed 401k, contact the broker of your choice and tell them you have your own retirement plan documents and want to establish an account with them. It is super important you tell the brokerage firm you have your own documents as otherwise they are going to force you to use their non-self-directed documents for your account.

In the case of Schwab you want to ask for the Company Retirement Account; TD Ameritrade tell them you want a non-Erisa Trust account.
Once you have the account set up you can wire/transfer/write a check from your current 401k account to the new account.

Some people get confused and think that the accounts are the 401k. That's not the case. The 401k is a trust and as such it can have 10,000 different accounts,. The accounts are just another investment for the self-directed 401k.

Watch Tim's video on this topic here
Author: Tim Berry
Tim Berry is a self-directed IRA and 401(k) attorney with more than 20 years' experience working with self-directed investors. Email him directly at [email protected] 
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