Invest a Solo 401k in an Annuity

Just like IRAs, 403b, and 45b plans, a solo 401k may also invest in annuities whether fixed or variable annuities. Following are the general steps that apply in investing a solo 401k in annuities.

1. Type of Annuity: You can invest in either fixed or variable annuities through your Solo 401(k). Decide which type aligns with your retirement goals and risk tolerance.
2. Choose a Provider: Select a reputable insurance company or financial institution that offers the type of annuity you want. Ensure they allow investments from Solo 401(k) plans.
3. Make the Investment: When completing the annuity policy paperwork, make sure to list the solo 401k as both the owner and the beneficiary. The solo 401k participant/trustee is generally the annuitant.

It's important to note that while investing in annuities is allowed, you should consider the fees and terms associated with them, as they can vary significantly between providers. Always consult with a financial advisor to ensure that this investment aligns with your long-term retirement goals.

Lastly, if the annuity company does not allow for annuity investments through a solo 401k, another option is to process a partial transfer/direct-rollover of your solo 401k to an IRA with the annuity company and to then make the investment through the IRA. However, make sure your are age 59 1/2 or older before processing the transfer from the solo 401k to the IRA so that penalties don't apply.