Legally speaking, a self-directed 401(k) is no different than any other 401(k). Having a self-directed 401(k) simply means that you are allowed to direct the investments of the 401(k). Many financial institutions claim that they allow you to self-direct your 401(k) investments but then turn around and restrict what you can invest in. A truly self-directed 401(k) allows you to make the decisions without restriction. And, think of the benefits associated with having a plan where you can literally make traditional and non-traditional investments from one account….now, that is truly self-directed.
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