by Peter Halm

A Self-Directed IRA (Individual Retirement Account) and a Self-Directed 401(k) are both types of retirement accounts that allow for a broader range of investment options compared to traditional IRAs and 401(k)s. However, there are key differences between the two:

1. Eligibility and Establishment:

   • Self-Directed IRA: Anyone with earned income can open a Self-Directed IRA. It's established through a custodian that allows for self-directed investments.
   • Self-Directed 401(k): Also known as a Solo 401(k), this is primarily for self-employed individuals with no full-time employees other than the business owner and their spouse. It’s established by the individual who acts as both the employer and the employee. So long as you meet the eligibility requirements (the presence of self-employment activities and absence of full-time employees), you can start a business to open a Solo 401(k)

2. Contribution Limits:

   • Self-Directed IRA: The contribution limits for a...