Author Topic: Solo 401K provider recommendation besides Vanguard?  (Read 2730 times)

AK

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Solo 401K provider recommendation besides Vanguard?
« on: September 30, 2016, 07:44:55 AM »
Fellow Mustachians,

The usual advice is to open a solo 401K with Vanguard. However, when I spoke to a rep, he mentioned they only offer investor level mutual funds in it and my preference is the total stock market index fund and bond fund. The investor level expense ratio is .16% vs .05% on the admiral level total stock fund. Also, they don't offer a brokerage account to buy equivalent ETFs so I'm considering opening the solo 401K elsewhere to buy cheap index funds or equivalent ETFs.

Does anyone have other provider recommendations and considerations? I am leaning towards Fidelity for their iShare offerings or TDAmeritrade for their commission free vanguard ETFs and both have low to no maintenance costs.

Jack

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Re: Solo 401K provider recommendation besides Vanguard?
« Reply #1 on: September 30, 2016, 07:47:14 AM »
I'm about to open one with Fidelity.

Gin1984

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Re: Solo 401K provider recommendation besides Vanguard?
« Reply #2 on: September 30, 2016, 07:48:06 AM »
I'm about to open one with Fidelity.
I too, like Fidelity.  Especially if you have a small amount.

Hbfan

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Re: Solo 401K provider recommendation besides Vanguard?
« Reply #3 on: October 02, 2016, 08:44:48 PM »
Can you buy any stock, etf, or mutual fund in fidelity solo 401k, or is there only a certain list you can buy frim?

bacchi

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Re: Solo 401K provider recommendation besides Vanguard?
« Reply #4 on: October 02, 2016, 09:52:42 PM »
Anything. I held their Spartan funds and their commission-free ETFs (mostly low expense ratio iShares).

TrulyStashin

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Re: Solo 401K provider recommendation besides Vanguard?
« Reply #5 on: October 06, 2016, 10:32:06 AM »
I left law firm employment last year and hung out my own shingle.  Vanguard would not allow me to rollover my firm-401k to a solo-401k.  Fidelity did allow me to do that and so that's what I did.  I have it invested in an index fund (it's only $13k so its all in one fund).  It has been a good experience so far.  You can buy any fund or individual equity that you want.

Fees:

$7.95 one time trading fee to buy shares in index fund
No annual fee or account opening fee
Index fund fee = .5% (KLD, a little higher than typical index funds but the index is MSCI ESG select -- companies that outperform on environmental, social, and governance metrics and I'm willing to pay a little more to invest in companies with strong ESG performance as they are a better long term value with lower volatility)

terran

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Re: Solo 401K provider recommendation besides Vanguard?
« Reply #6 on: October 06, 2016, 11:16:02 AM »
I also have mine with fidelity. They have many index funds that are comparable to vanguard admiral class shares. Here's a good place to start: https://www.bogleheads.org/wiki/Fidelity

They also allow incoming IRA rollovers which could be helpful if we ever aren't eligible for roth IRA contributions and want to clear out traditional IRAs in preparation for doing a backdoor roth contribution.

Unlike vanguard, fidelity doesn't offer a roth solo 401k which might be a disadvantage depending on your feelings about roth vs traditional (I'm in the traditional beats roth camp). I think etrade might be an option that both allows incoming rollovers and roth, but I think there may be more trading fees (not sure about that though).

Vanguard would not allow me to rollover my firm-401k to a solo-401k.  Fidelity did allow me to do that and so that's what I did.  I have it invested in an index fund (it's only $13k so its all in one fund).

Too late now, but for others who might be thinking the same thing, this may have been a mistake. I believe employer sponsored plans (and IRA's rolled over from employer sponsored plans) have better liability protection than solo 401k's. This might depend on the state, and I don't know how big a difference it would really make, but it would be worth looking into for anyone thinking about rolling an employer sponsored plan into a solo 401k.




Miss Piggy

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Re: Solo 401K provider recommendation besides Vanguard?
« Reply #7 on: October 06, 2016, 12:16:07 PM »
Mine is with T Rowe Price.

TrulyStashin

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Re: Solo 401K provider recommendation besides Vanguard?
« Reply #8 on: October 06, 2016, 12:50:25 PM »
I also have mine with fidelity. They have many index funds that are comparable to vanguard admiral class shares. Here's a good place to start: https://www.bogleheads.org/wiki/Fidelity

They also allow incoming IRA rollovers which could be helpful if we ever aren't eligible for roth IRA contributions and want to clear out traditional IRAs in preparation for doing a backdoor roth contribution.

Unlike vanguard, fidelity doesn't offer a roth solo 401k which might be a disadvantage depending on your feelings about roth vs traditional (I'm in the traditional beats roth camp). I think etrade might be an option that both allows incoming rollovers and roth, but I think there may be more trading fees (not sure about that though).

Vanguard would not allow me to rollover my firm-401k to a solo-401k.  Fidelity did allow me to do that and so that's what I did.  I have it invested in an index fund (it's only $13k so its all in one fund).

Too late now, but for others who might be thinking the same thing, this may have been a mistake. I believe employer sponsored plans (and IRA's rolled over from employer sponsored plans) have better liability protection than solo 401k's. This might depend on the state, and I don't know how big a difference it would really make, but it would be worth looking into for anyone thinking about rolling an employer sponsored plan into a solo 401k.

What do you mean by "better liability protection"? 

My company's 401k had relatively high fees and few investment options.  And, since I was no longer employed there, I could not continue to contribute to it and I'd have to open a solo 401K anyhow.  Wouldn't these issues outweigh any improvement in "liability protection"?