How to invest in alternative assets with the Carry Solo 401k
If you want to make investments into alternative assets like crypto, real estate, and private equity outside of the Carry platform, you can easily do so through our partnership with Solera National Bank.
While we’re working to bring this checkbook control functionality natively onto our own platform soon, the current flow for gaining checkbook control access looks like this:
Step 1: Open a Carry Solo 401k Plan.
If you don’t have a Carry account yet, the first step is to create one here. The Carry Solo 401k Plan is available in all of our plans (Basic, Professional, VIP).
Once you’ve created your Carry account, open a Solo 401k plan from your dashboard. It takes under 10 minutes and can be done completely online with no paper forms.
Step 2: Fund your Carry Solo 401k Plan with the amount you want to contribute to your Solo 401k.
Connect your bank account and send funds to your Carry Solo 401k Plan first. This enables you to track your annual Solo 401k contributions in one place, inside the Carry web app.
Step 3: Open an account under the Solo 401k plan name and plan EIN with Solera National Bank.
Essentially, your Solera account is used as a separate bank account for your Solo 401k plan. It is just used to hold cash for the plan, and since all funds/accounts need to be registered in the name of the plan, and not you personally, you’ll need to make sure the account is opened with your plan name and EIN.
- To set up the Solera account, visit this link and go through the steps: https://join.solerabank.com/welcome-to-solera-banking.
- Under referral source, select Ocho/Carry.
- You’ll need your Solo 401k plan name, EIN, and trust document — all of which can be found in your Carry plan documents section here.
Step 4: Your Solera account will typically take around 1 to 2 business days to be approved. Once opened, transfer the funds from your Carry Solo 401k to your new Solera bank account.
To transfer the funds from your Carry Solo 401k to Solera, initiate a withdrawal from your Carry Solo 401k to Solera using “Off platform blank check investment” as the withdrawal reason.
Step 5: Once your funds are sent to Solera, you can invest into alternative assets with those funds with checkbook control.
Make sure any investment is also registered in the name of your Solo 401k plan, not yourself.
You can wire directly to Solera. However, at the moment we don’t have a way of tracking off-platform contributions, so they won’t be included in your contribution totals in app.
How checkbook control works
The Carry Solo 401k Plan is a self-directed Solo 401k plan with checkbook control. With checkbook control, your Solo 401k funds are kept in their own checking account. As the trustee of the plan, you can wire funds and write checks from that account when you want to make investments.
With checkbook control, you can invest in alternative assets like:
- Private equity
- Real estate
- To invest in cryptocurrencies, you can open a new account with an exchange under the name and EIN of your Solo 401k plan, and fund the account using your Solera bank account.
- To invest in startups or real estate, you can write a check or wire funds directly from your Solera bank account. Make sure all investments are in the name of, or titled to, your Solo 401k plan, not yourself.
All investments made belong to your Solo 401k plan, and it’s important that funds never be commingled with your personal funds.
Additionally, you are solely responsible for sourcing, vetting, and monitoring any investments you make in this way. You should ensure that the investments are not disqualified (for instance, investing in a company you control through your Solo 401k is usually prohibited), and are not collectibles (Solo 401ks are prohibited from holding collectibles such as wine, works of art, stamps, NFTs, etc.).
Checkbook control will soon be available directly within the Carry app.