Expert Interview with Rick Pendykoski on Self Directed Retirement Plans

Retirement plans

Rick Pendykoski, founder of Self Directed Retirement Plans LLC, doesn’t think retirement savings will look all that different in the future than it does now. But he hopes there’s a big difference in how children are educated about money management in the coming years.

“If only high school students were taught how interest works, compound interest works, and credit scores DO count, I think the next generation will be better prepared to save,” he says.

At Self Directed Retirement Plans, Rick helps clients take control of their retirement savings rather than relying on a traditional financial advisor. Here, he discusses how self directed retirement plans work and who should be using them.

Tell us about Self Directed Retirement Plans LLC…what services do you offer?

Our company creates true checkbook-controlled retirement plans. This can be in the form of a self directed IRA with the underlying LLC, self directed 401(k) profit sharing plans – commonly called Solo, Roth or I k’s. These type of plans are perfect for our self-employed clients. We also create company-sponsored self directed 401(k) profit-sharing plans for our clients who have businesses with full-time employees. We are very experienced in all three types of plans.

What is a self directed retirement plan? How do they differ from the types of retirement plans most of us are familiar with?

Self directed plans have been around for along time. The main reason most people are not aware of them is: The normal financial advisor will not educate their clients because they must represent the investment products in their broker dealer’s pouch. I used to be that financial advisor many years ago, and if I educated an investment product not on my broker dealer’s list, it would be considered “selling away.”

What are the advantages of self directed IRAs or 401(k)s?

We get asked that question a lot.

First, the advantages: total checkbook control. If you see an investment opportunity you are comfortable with, write a check and take advantage immediately. You don’t have to ask a custodian for permission and slow things down. With either a self directed IRA or a self directed 401(k), you are in total control.

What are the drawbacks of self directed plans?

We also get asked that a lot – the disadvantage is “you are self directed.” If you make a good decision, you can pat yourself on the back, but if you make a bad decision, you are the one to kick yourself a little. Self directed plans are not for everyone. Our normal client has a nest egg and for various reasons wants control. I would say 90 percent want to invest in real estate directly or indirectly. Someone in their 40s or 50s has probably purchased two or there homes; they understand what a realtor does, what escrow is, inspectors, etc. Why not put them into a position where they can now use their retirement funds for investments they actually understand.

What are the major differences between a self directed IRA and a self directed 401(k)?

Many people think they are the same, but although they share similarities, there are also many differences.


  • MAGI (Modified Adjusted Gross Income) limits contributions
  • No personal loans
  • UBIT (unrelated business income tax) applies on leveraged real estate
  • 100 percent matching


  • Contribution limits increase to $17,500 or $23,000
  • MAGI does not apply
  • 100 percent matching
  • Personal loans allowed, up to 50 percent of account balance up to $50,000
  • One self directed plan allows both spouses to participate and rollover both sets of qualified dollars into the one account
  • UBIT does not apply
  • Is a standalone entity with its own EIN and can have its own checkbook

What advice do you have for maximizing your retirement savings?

Start as soon as you can. Learn the rule of 72 and apply it. Learn about ROTH vs. TRADITIONAL.

What type of person do you think is best suited to manage a self directed retirement plan? What background knowledge or habits are helpful to successfully managing these investments?

Normally our clients come on board with considerable assets. If they acquired these assets in a former 401(k) and managed it, they would be a good client. If they just let the 401(k) “do their thing,” they might not be good stewards of money, and it would be a shame for them to squander away their retirement assets.

What do you think are the biggest misconceptions or myths Americans have about their retirement savings plans?

Most don’t even think about these plans until they reach their 40s. I just talked to a young man, 27, earning about $75k, and he knew nothing about IRAs in general, let alone a self directed IRA or 401k.

How do you think the Great Recession changed the way Americans view how they save for retirement?

Wages have stayed flat, costs have gone up, and retirement planning is not a tangible thing you can touch and feel. I think most people would like to save more, but they just can’t.

As of today, 32 percent of people polled think the economy is the No. 1 concern for them and their families. National Security is down to 23 percent, so the average American wants to do better but can’t figure out how.

Follow Rick on YouTube and LinkedIn.

NewRetirement Planner

Do it yourself retirement planning: easy, comprehensive, reliable

NewRetirement Planner

Take financial wellness into your own hands and do it yourself retirement planning: easy, comprehensive, reliable.

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