“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”

Franklin D. Roosevelt

Franklin D. Roosevelt was able to sum together the entire thought process of real estate investors and agents in a single sentence. Real estate business is back on its track after the last recession and property prices are faring well throughout the United States.


As a real estate agent, it is quite common to ignore retirement planning and most of the agents do not have a solid retirement plan in place. In some cases, it could be lack of awareness and in others, overestimation of one’s ability to work. However, if you are to find a retirement plan that can help you in capital funding during a period of financial drought, isn’t that wonderful?

Solo 401k is a retirement plan for self-employed individuals and real estate agents can benefit a lot from it. It has comparatively higher contribution limits and one can contribute up to $53,000 in 2015 (excluding catch up contributions).

“The best time to plant a tree was 20 years ago. The second best time is now.”

Chinese Proverb

Top 3 Benefits of Solo 401k

  • Higher contribution limits: $53,000 for 2015 (excluding catch up contributions)
  • Flexible investment options: Real estate, private business, precious metals, tax liens, traditional stock and mutual funds
  • Loan Option: Borrow up to $50,000 or 50% of fund savings

For real estate agents Loan option is one of the biggest benefits.

Solo 401k Loan Option

  • Who can borrow: Every Solo 401k plan participant can borrow up to 50% of fund savings to a maximum limit of $50,000. If you have $100,000 in your solo 401k, you can borrow $50,000. However, if you have $30,000 in your solo 401k, you would be able to borrow up to $15,000 only.
  • Interest rate for loan: In most of the cases, it is prime rate (3.25%) or primate rate plus 1% interest.
  • Frequency of repayments: A solo 401k loan is repaid on a monthly or quarterly basis with at least one payment per quarter.
  • No credit qualifications: You do not have to fulfill any credit qualifications unlike regular bank loans. For realtors, it can be difficult to get a credit during a financial drought and solo 401k loans can help them get necessary funding.
  • No tax penalties: Unlike regular retirement plan, you do not have to deal with a tax penalty on borrowing from your Solo 401k until all repayments are made on time.
  • Interest paid back to the account: The best part of solo 401k loan option is its low interest rate. Plus, instead of paying interest to another lender, your interest payment will be paid directly into your Solo 401k. Essentially, you are borrowing from yourself, and paying interest to yourself.

Real estate transactions involve different types of fees and Solo 401k loan option can help you handle those. For an instance, you might need money to cover legal costs or research work in the transaction. At the same time, it can help you grab crucial real estate opportunities and offer financial support.  

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