One factor for us was that Schwab allows in service distributions. I'm not sure if all do.
Interesting, so you've actually rolled schwab solo 401(k) funds out into an IRA while keeping the 401(k) open? If so, that's a pretty cool feature I haven't heard about from any premade solo 401(k) yet. It might be useful if I need to do some small Roth conversions to optimize the new pass through deduction.
Good point about using 401k to Roth with the sec 199 business deduction. I'd not thought to call that out in this conversation but was aware of that technique as it may apply to us in 2020 or beyond.
I've not actually done the in service distributions but quizzed reps during sign up pretty throughly. Reps can be wrong so I checked plan docs. They look good.
https://www.schwab.com/public/file/P-619651/BDL50374-04-NC_PPA_401k_Basic_Plan_Doc_Final_Web.pdfSection 5.01 part c says:
C. Distributions During Employment
1. In-Service Distributions—A Participant may elect to receive an in-service distribution of all or part of their Individual Account attributable to Employer Contributions, other than those described in Plan Sections 5.01(A)(2), upon meeting one of the following requirements.
a. Participant for Five or More Years—An Employee who has been a Participant in the Plan for fi ve or more years may withdraw up to the entire Individual Account.
b. Participant for Less than Five Years—An Employee who has been a Participant in the Plan for less than fi ve years may withdraw only the amount that has been in their Individual Account attributable to Employer Contributions for at least two full Plan Years, measured
from the date such contributions were allocated.