How a self-directed 401k can help you beef up retirement investing, with Dmitriy Fomichenko

Hack Your Wealth

#54: In all my prior jobs except the current one, I can now say in hindsight that my 401k sucked.

It only offered 10-15 fund options…which is like being forced to shop for weekly groceries in a gas station mini-mart when you know that Kroger is on the other side of the street.

Their fund expense ratios were mediocre, even for the passive funds. You couldn’t beef up pre-tax money with additional after-tax money. There was no mega-backdoor Roth conversion option.

These are really easy ways for companies to create value for employees via 401k plans. Why they are so often deficient when it comes to these things, I’m sure I don’t know.

Luckily, there is a way you can take greater control over your 401k money (or IRA for that matter) to invest more freely and build wealth.

It’s called a self-directed retirement account.

This week, I chat with Dmitriy Fomichenko, a financial planner who specializes in using self-directed retirement accounts “with checkbook control” to beef up your investing and retirement planning strategy.

What you’ll learn:

• What is a self-directed retirement account, the different types that exist, key risks, and how they differ from traditional retirement accounts
• The process for setting up a self-directed retirement account, and how to fund it
• Maintenance costs associated with self-directed accounts
• The role of the custodian / trustee / administrator for self-directed accounts
• How to access your self-directed account funds to invest (and key differences here between 401k vs. IRA versions)
• What kind of assets you can invest in with a self-directed account, and how income and expenses generated by those investments are treated
• Why mixing outside funds with self-directed account funds is such a big no-no, and the consequences if you do

Check it out here:

https://hackyourwealth.com/self-directed-retirement-account-401k-IRA
Are you satisfied with your 401k? Why or why not? Does a self-directed account sound appealing? Why or why not? Let me know by leaving a comment when you’re done.

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Links mentioned in this episode:

• Sense Financial free consultation
• List of non-recourse lenders
• Everything you need to know about 401Ks (HYW003)
• IRAs, Roth IRAs, and how to get the tax benefits of BOTH (HYW004)
• 18 real estate investors share what they wish they knew at college graduation
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.