A solo 401(k) is a powerful retirement savings vehicle for self-employed business owners.
Ubiquity's Single(k)® plan allows you to invest in a wide range of options through a self-directed brokerage account.
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Solo 401(k) plans allow investors to put money into gold and other precious metals to generate higher returns for the portfolio. A unique benefit of precious metals compared to investments like stocks or bonds is that you directly own a highly portable, permanent, tangible asset–not just a paper claim. On the downside, you have the cumbersome task of storing and protecting your physical assets.
Physical metals are:
There is no single “perfect” investment. Potential downsides of precious metal investment include:
According to IRC 408 (m), a Solo 401(k) plan owner may invest in:
The value of gold used in jewelry, dentistry, electronics, and currency is determined 24 hours a day, 7 days a week, and changes based on hoarding. People tend to buy up gold during times of economic uncertainty, inflation, war, or political crisis.
The value of silver fluctuates in a more volatile way than gold, determined by industrial supply and demand. Innovations, emerging markets, production, and new applications can drive up the value.
The value of platinum is driven by demand in the automotive sector, jewelry, chemical refining, and computing. Cartel activity in the platinum mines of South Africa and Russia can artificially drive up prices, making platinum the most volatile of the precious metals.
The value of palladium depends upon its use in electronic and industrial product manufacturing. Mines are located in the US, Russia, South Africa, and Canada.
In addition to buying up the physical metals, you can also invest in:
The precious metal you invest in must have a fineness equal or exceeding at least 995 parts per 1,000. Most gold coins meet this standard, but several types of coins are disallowed, including:
These coins are considered “collectibles” and are therefore not able to be held in a 401(k) or IRA.
Precious metal bars must be stored in a bank, credit union, or depository-taking institution. Coins can be stored at home in a personal vault, in a bank safety deposit box, or at a third-party storage firm like Brinks. Your choice will depend upon how much security you need and how much access you want to have.
Ubiquity is a top Solo 401(k) plan provider for entrepreneurs and the self-employed. Contact us to inquire about starting a Solo 401(k), which allows investment in gold and other precious metals. We never charge AUM fees, instead relying on the industry’s most affordable monthly flat-fee model.