Many people and advisors equate a Self-Directed IRA and a Self-Directed 401(k) as being the same. They are not — they have similarities in that both can be established to achieve checkbook control, but the manner and avenues to get to that point are quite different. One major difference that an individual should know about is that a self-directed IRA requires a custodian, while self-directed 401(k) DOES NOT. The trustee of the Self-Directed 401(k) plan calls all the shots. For example, the self-directed 401(k) plan established for John Smith will be established as the “John Smith 401(k) PSP,” with John Smith, most likely, being the designated Trustee for the plan. John Smith, should he desire, can also designate a third party to serve as the Trustee of the plan.
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