A self-directed 401(k) for self employed business owners isn’t the same as an employer-funded retirement plan.And if you’re a kick-ass entrepreneur, a solo 401(k) is a kick-ass way to save for retirement. Why? Because this unique plan offers the ability to use retirement funds to make any type of investment on your own without requiring the consent of a custodian.The following are some examples of the types of investments you can make with your solo 401(k) :Loans (personal, private, hard & soft, etc.)Foreclosure property.Stocks, Bonds, Mutual FundsTax liensGoldMortgagesRaw landDeedsPrivate loansPrivate businessesLimited Liability Companies & PartnershipsResidential or commercial real estateMortgage poolsPrivate placementsMost currenciesIndeed, you can make just about any type of investment except art and collectibles. Who Benefits The Most From a Solo 401(k) Plan?The solo 401(k) plan is designed specifically for small, owner-only businesses. It’s a tax efficient and cost effective plan that offers all the benefits of a self directed IRA, and includes a couple of unbeatable benefits, such as high contribution limits (up to $60,000 or $54,000 depending on your age) and a $50,000 loan feature.There are many benefits and features of the solo 401(k) plan that make it useful to self employed individuals. These features and benefits are what make the solo 401(k) plan so popular:Roth Type ContributionsRoth IRAs have historically been unavailable to people with high income. But if you have a solo 401(k) , you can use the built in Roth sub-account which can be contributed to regardless of how much money you make.Flexible Investment OptionsAs I mentioned above, you can make almost any type of investment, including real estate and private stock, and then channel them back into your solo 401(k) tax free.Loan FeaturesI also mentioned earlier how the solo 401(k) allows participants to borrow up to $50,000 or 50% of their account value (whichever is less) for any purpose. The interest rate on this loan will be the prime interest rate, which is around 4% give or take.But be careful, failing to pay back this loan will “displease” your friends at the IRS to say the least!UDFI ExemptionMost IRAs generate Unrelated Debt Financed Income (a type of Unrelated Business Taxable Income) when they buy real estate. Which means they’ll end up paying more taxes. Thankfully, a solo 401(k) plan is exempt from UDFI.Sky High Contribution LimitsUnder the 2017 solo 401k contribution rules, if you’re under the age of 50 you can make a max contribution of $18,000. This amount can be made in pre tax or after tax dollars.On the profit sharing side, a business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined max of $54,000, if you include the employee deferral.If you’re over the age of 50 everything is the same, except your contribution limit is $60,000 instead of $54,000.ConsolidationA solo 401(k) can accept rollovers of funds from any other retirement account, such as an IRA, a SEP, or a previous 401(k) .Employee Elective Deferrals & Employer Profit SharingFor 2017, you can contribute up to $18,000 per year through employee elective deferrals. An additional $6,000 ($24,000) can be contributed for persons over age 50. These contributions can be up to 100% of your self employment compensation.As an employer you can make an additional contribution up to 25% of your self employment compensation.Total LimitAs I mentioned earlier, the contributions to a solo 401(k) are capped at a max of $54,000 per year or $60,000 for persons over age 50.But if your spouse also participates in the Solo 401(k) with you and earns compensation from the business, the spouse is allowed to make separate and equal contributions. This would increase your combined annual contribution limit to $108,000 (or $120,000 if both spouses are over the age of 50).Cost Effective AdministrationThe solo 401(k) is not only easier to administrate, but it’s also cheaper! There are no annual filing requirement unless your solo 401(k) plan exceeds $250,000, in which case you will need to file Form 5500.Do Self-Employed Solo 401(k) Owners Need a Custodian?Nope! The most cost effective benefit of the solo 401(k) is that it does not require you to hire a bank or trust company to serve as trustee. This allows you to serve in the trustee role.This means that all assets of the 401(k) trust are under your sole authority. You won’t have to pay fees, or wait for a custodians consent, unlike most other people with retirement accounts! And then you’ll also be able to invest in almost anything by simply writing a check.Click here to watch videos on Solo 401(k) and other retirement planning toolsAre There Any Administration Cost or Maintenance Fees With a Solo 401(k)?Yes and no. You won’t have to pay a custodian, so that kills 90% of the fees right there. As for maintenance cost, there is generally no annual filing requirement unless your solo 401(k) plan exceeds $250,000 in assets. If you have more than $250,000, you’ll need to fill out Form 5500.Besides the $250,000 filing rule, you’re not required to do anything else. However, I would advise you to keep all records, receipts, and contracts related to your solo 401(k) and its investments on file. So if you hire someone to do those things for you, that will probably be your biggest administrative cost.Do you want to learn more about solo 401(k) to see if it’s the right option for you? Check out our previous article to find out if you’re eligible for the solo 401(k).