Author Topic: i401k For Self Employed - Looking For Recommendations  (Read 1350 times)

brazos2016

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i401k For Self Employed - Looking For Recommendations
« on: November 15, 2017, 07:19:43 AM »
Hello, I am looking for some recommendations for what to invest in using a i401k via Vanguard (unless there is a better source) specific to being self employed and also with the current market being very high right now. I started my company last spring (2016) and things have been good thus far so I am finally looking to open an i401k for myself and my wife. Prior to now I just wasn't comfortable due to the high amount of cash flow I have to keep in order to stay in business as a general contractor in commercial construction.

I am also interested in some type of after tax basic investment account for money that can be accessible if needed. I've read a lot of the information on here and posted this once before and was told to invest in 100% VTI's, but was one, hoping to get some other opinions, and two, looking to see if anyone's recommendations have changed based on the current status of the market and opening new accounts like this. I am 33 and am not trying to retire by 40 or 45, but would like to be smart about my money of course. I can probably open my i401k with about $10,000 max this year and my wife's would be $3,000 and another $3,000 for the taxable investment account. Going forward I would make monthly deposits into these accounts. Thank you for any advice or input.

BlueDove

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Re: i401k For Self Employed - Looking For Recommendations
« Reply #1 on: November 15, 2017, 09:47:21 AM »
I'm in the same boat and posted the results of my research and my remaining question here if you want to have a look:

https://forum.mrmoneymustache.com/investor-alley/solo401k-higher-fees-or-a-midcapsmall-cap-fund/

I'm leaning towards Etrade over Vanguard because of the high expense ratio in the Vanguard solo 401k. 

brazos2016

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Re: i401k For Self Employed - Looking For Recommendations
« Reply #2 on: November 15, 2017, 12:03:27 PM »
Thanks, this is helpful. I will definitely look into Etrade for the i401k. That was my concern as well regarding the expense ratio and no Admiral shares. I thought I read somewhere that was changing, but apparently not. My main problem too is that I should have been dumping money into retirement accounts long before now and didn't so I'm buying in at a high point in the market to really start these accounts which sucks, but it is what it is I suppose. I read an article saying right now is a good time for dollar cost averaging but my issue is being self employed I need to stick a lump sum of money into the market before the end of the year for tax purposes so I can't do averaging right now really, next year I suppose, but we'll see. My only other retirement account is a S-IRA I have from my previous employer, but it is through Ameriprise and has only performed so-so. I appreciate your reply!

fiStressRelief

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Re: i401k For Self Employed - Looking For Recommendations
« Reply #3 on: November 15, 2017, 12:25:32 PM »
I went with Fidelity because of the lack of vanguard admiral funds.  So far so good.  As far as downsides, there is no online contribution mechanism and they classify it as some odd Keogh product.

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DavidAnnArbor

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Re: i401k For Self Employed - Looking For Recommendations
« Reply #4 on: November 15, 2017, 06:40:54 PM »
I find Fidelity is very helpful.

I link my Fidelity cash management account with my bank account. Money gets transferred from bank to cash management.
Then I call up Fidelity for them to transfer from cash management account to the individual 401k, and then I direct them to invest in either total stock market index, or international index.

Telecaster

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Re: i401k For Self Employed - Looking For Recommendations
« Reply #5 on: November 15, 2017, 07:13:45 PM »
^ Fidelity has great service (my solo 401(K) is there, FWIW), but it would be nice to simply transfer the money online instead of going through the step of calling them or stopping by a Fidelity office to make a deposit. 

AK

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Re: i401k For Self Employed - Looking For Recommendations
« Reply #6 on: November 16, 2017, 06:20:16 AM »
I have a non-prototype solo 401K and Fidelity is the custodian. To transfer funds from my business checking account into it as an employee contribution, I use bill pay and it sends a physical check by the desired date for free. It takes 5 or so business days to complete but is easy to do.

For some reason, Fidelity doesn't allow electronic transfers for it and I would have to pay my bank a wire fee to transfer the funds. My payroll provider won't do it either even though they'll transfer money into an HSA.

AK

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Re: i401k For Self Employed - Looking For Recommendations
« Reply #7 on: November 16, 2017, 06:25:10 AM »
With Fidelity, I invest in FSTVX which is there equities, low cost index fund and has almost the same return performance as VTSAX because there are no transaction fees and a slightly lower expense ratio. Buying Vanguard mutual funds or ETFs have fees.

harvestbook

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Re: i401k For Self Employed - Looking For Recommendations
« Reply #8 on: November 16, 2017, 05:03:21 PM »
I didn't realize Fidelity doesn't allow online contributions. While Vanguard is a little more expensive due to lack of admiral funds, I just use LifeStrategy Growth for the 80/20 AA at 0.15 ER. Keeping it simple since our taxable and tIRA buckets will probably end up being more valuable in the end and everything else was already at Vanguard. Easy to set up and administer, happy so far.

Fuzz

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Re: i401k For Self Employed - Looking For Recommendations
« Reply #9 on: November 22, 2017, 10:47:03 AM »
I'm happy with Vanguard. Yes, you could find something with lower fees, but it works and at some point, just starting the damn thing is more important than figuring out how to save .08 on your management fee.

Since Fidelity didn't offer online contributions, that's a dealbreaker for me.