This Isn’t a Retirement Account. It’s a Tax-Free Deal Launcher.
Your CPA thinks a Solo 401(k) is where you put money to sit quietly until you’re 65. Your CPA is wrong.
The Solo 401(k) isn’t a retirement account. It’s a Swiss Army knife for tax-free investing, deal-making, and money movement. Wall Street doesn’t want you to know it exists, and almost no entrepreneurs are using it right.
While everyone else is arguing about Roth IRAs and traditional IRAs, smart money is using Solo 401(k)s to build tax-free empires. Here’s how the real game is played.
The Contribution Beast Mode
Solo 401(k)s let you contribute over $70,000 per year if you structure it properly. That’s not a typo. As both the employee and employer of your business, you can max out both sides of the contribution equation.
Even better? Bring your spouse into the business as an employee and double it. Now you’re moving $140,000+ annually into tax-advantaged territory. Most entrepreneurs are fighting over $7,000 IRA contribution limits while the Solo 401(k) is sitting there with 10x the capacity.
This isn’t defense. This is offense.
The Roth Component: Seed Money, Harvest Forever
Here’s where it gets interesting. The Roth portion of your Solo 401(k) operates on a simple principle: pay tax on the seed, never on the harvest.
You put in $30,000 of after-tax money today. That $30,000 grows to $300,000 over time through smart investments. When you access that money, the IRS gets exactly zero dollars. No taxes on the growth. No required minimum distributions. No government partnership in your success.
Peter Thiel understood this. He seeded his Roth IRA with PayPal shares when they were worth almost nothing. Those shares are now worth billions, growing tax-free forever. Mitt Romney did something similar, building his Roth to over $100 million.
The strategy isn’t complicated. The execution separates players from pretenders.
Your Own Personal Bank
Most people don’t know you can borrow from your Solo 401(k). Not only can you borrow from it, you should be borrowing from it.
Need $50,000 for a real estate deal? Write yourself a check from your Solo 401(k). Pay yourself back with interest. That interest? It goes back into your account, not to some bank.
You become your own bank, your own lender, your own financial institution. The money stays in your ecosystem while you use it to make more money.
Checkbook Control: Skip the Middleman
Traditional retirement accounts make you call a custodian every time you want to make an investment. “Can I buy this stock?” “Can I invest in this real estate deal?” “Can I fund this loan?”
Solo 401(k)s with checkbook control eliminate the middleman. You write the check. You make the investment. You control the timing.
Want to fund a private loan that pays 12% interest? Write the check. See a real estate flip opportunity? Write the check. Friend needs capital for his startup? Write the check.
All inside the tax-free wrapper. All under your direct control.
The Investment Playground
Your Solo 401(k) can invest in almost anything:
- Real estate (residential, commercial, raw land)
- Private loans and notes
- Cryptocurrency and digital assets
- Private equity and hedge funds
- Physical precious metals
- Your friend’s business (as long as you follow the rules)
- Tax liens and certificates
The only major restrictions are collectibles and prohibited transactions with disqualified persons (basically, yourself and close family members). Everything else is fair game.