June 9, 2012
BY: Lars Forsberg,
Why are the prices all over the map for the creation of Solo 401k’s and Self Directed IRA LLC’s?
Like any product or service, the perceived quality of the product and/or the level of service determines the price.
Often promoters of self directed retirement products have ulterior motives. These promoters will sell their plan establishment services cheap, with the intention of pushing other investment products on clients down the road. These guys are kind of like drug dealers who give people cheap introduction pricing on drugs, knowing that once addicted, the people will return to purchase more. Beware the self directed plan pusher who tries to convince you to pursue risky investments or behavior that may invite the scrutiny of the IRS.
If it appears that a promoter of self directed retirement products pushes only real estate investing on their website, or encourages ROBS (Roll Overs as Business Startups) strategies, consider their motives. This is not to say that any particular alternative investments are always superior to others. To the contrary, beware the “expert” who knows how you can skirt the rules and “make a fortune” doing this or that.
Other promoters provide little or no after-sale service. These companies will sell you their retirement products, then set you loose. While self directed investing is fairly straightforward once you understand what is acceptable and what is not, initially you will have questions, and you will need answers to avoid pitfalls.
You should not limit your choices to the companies that have the most spectacular web site or marketing. You should not limit your choices to the companies with the most familiar names. Whatever you do, don’t look for bargain basement pricing.
Choose a self directed retirement package that fits your personal needs. Be sure that the plan you choose gives you the most power and flexibility. Choose a company that you are comfortable with. Choose a company that will support you after the sale, rather than try to sell you on other products. When you are dealing with a decision as important as this one, take your time, do your research.