Solo 401(k) Plan

[Sonoran]

Does anyone know if Vanguard is considering offering individual 401(k) Plans in the near future?

[tfb]

What did they say when you asked them?

[tibbitts]

What did they say when you asked them?

When I asked, they were considering "offering personal 401ks in the near future." But, that was years go (when they were first developed.) I would expect the same answer today. It didn't matter to me, however, since I would have gone with an SEP anyway.

Paul

[Gregory]

Fidelity appears to have one. Have you checked out their offerings?

http://personal.fidelity.com/products/r ... shtml.cvsr

Good luck. It's an important decision. Hopefully VG will have one available soon.

Greg

[Sonoran]

Thanks for the replies..

I haven't asked Vanguard, thought I would ask here first. One can mostly find great third-party insight and thoughtful posts here, along with the few dumb remarks.

Gregory.. yep, I checked Fidelity and it would be a good choice, but I like to stick with Vanguard for all of my investments. Just a personal preference.

Mike

[Gregory]

Two questions for you: Can you access VG funds fee-free thru a Fidelity Solo 401(k)? Would you consider rolling over a Fid. 401k to a VG IRA and then starting a VG Solo 401k when they start to offer one?

Just food for thought.

Our office has a 401k directly thru VG and we're happy with it. I know the solo 401k has great features, but if you REALLY want a VG 401k, is it possible for you to open a traditional one by yourself?

Greg

[Socrativestor]

Currently I think the best you can do is accessing Vanguard via www.401kbrokers.com for 0.25% annual fee or Fidelity for free (no additional charge) (not so bad if you stick with Spartan funds). Last time I checked, Fidelity would not do Roth 401(k) while 401kbrokers would. Since the 401kbrokers annual fee is paid outside the 401(k) account (i.e. it is not deducted from the 401(k) itself) and it is a business deduction, they offer regular and Roth 401(k), and you can stick with Vanguard, I am leaning in that direction.

Also check out their excellent FAQ:
http://www.401kbrokers.com/FAQ.htm

[not2late]

We currently have a solo 401-k w/ Fido because Vang does not offer it . Allows us to contribute more than sep or simple .

Does anyone know contacts/details about solo 401-k ROTH . Vang and Fido do not offer but they will "HOLD" ...a 3 rd party must be involved but I'm not sure about who or whether to trust . I found a 3 rd party that charges about $190 a yr but I would need much more confirmation before I move forward .
Fidelity referred me to this 3 rd party .

Anyone have insight????

not2late

[rogov4321]

Went with T. Rowe Price because they have the Roth Solo 401(K) unlike Vanguard and Fidelity. Contacted Vanguard about the Roth Solo 401(k) and the general answer is there needs to be more interest before they will offer the plan. Please write letters expressing your interest.

[not2late]

Thank You rogov4321

Will check w/TRP , however, do their higher ER bother you?
Would't a low cost provider that allows freedom to invest w/ Vang be better?
Do you see any risk w/involving 3 rd party?
Is it complicated to administer the ROTH version? (Wife has no trouble w/our current solo 401-k...only us 2 ) ?

Safest route does seem to be TRP if there are some twists/land mines out there that could cause grief later . Just don't know if and what they are?
Only thing I know, they have done a great job over complicating this stuff and making me nervous with moving forward...

Please share your thoughts and/or encouragement to my concerns

not2late

[carlsworld]

Does anyone know if Vanguard is considering offering individual 401(k) Plans in the near future?

They're planning on rolling them out this year.

[Sonoran]

Thank you all again.. just the answers I was looking for.

Mike

[Eric]

I found a provider called Single(k) that offers these plans for a flat $175 per year. There are additional charges for plan loans, Roth options, etc., but for most people it appears their total fee would be $175.

I haven't tried this provider, however, and know only what they say on their website. So please investigate for yourself before signing up.

[not2late]

Eric , thank you . Will check out your provider.



carisworld , Is this a solo 401-k for small family owned business or some complicated plan for big companies?

Why is there less interest in solo 401-k ROTH ? Why am I thinking the Roth version is of more value ?

not2late

[LH2004]

carisworld , Is this a solo 401-k for small family owned business or some complicated plan for big companies?

If it's for anything other than 1-employee (or 2-married-employees) companies, it's not a solo 401(k).

[Ducks]

I hope if someone sets up a Solo 401(k) with either 401kbrokers.com or theonline401k.com, they will come back to this thread and post about their experiences. I'm inclined to wait until later in the year to choose a provider in case carlsworld is correct & Vanguard begins offering the program, but information about other options is always good.

[segfault]

I've used 401kbrokers for almost a year now. They recently increased their minimum fee to $25 per quarter. Because my self-employment income is small (and acts as a cap on what I have in the 401k), I'm paying a comparatively large percentage of the account balance in yearly fees (until the balance increases).

No complaints about the service though. There is a decent amount of paperwork to be filled out.

[zzcooper123]

I have used 401kbrokers.com for two years now. Good firm, no problems. Fees are reasonable. Currently 0.25% yearly.

[TheEternalVortex]

Fidelity is a good option because they have the Spartan funds and you can buy ETFs for anything else.

[jcompton]

Does anyone know if Vanguard is considering offering individual 401(k) Plans in the near future?

They're planning on rolling them out this year.

Cite a source, please. I and many others have been told nothing so definite.

[not2late]

Thanks for the contacts...I will also check w/Vang but I'm guessing they still don't want to go there.
not2late

[rogov4321]

Will check w/TRP , however, do their higher ER bother you?

A little bit, but not enough to go to other options. (I really wanted the Roth option.) Though I like index funds, I am not opposed to managed funds. T. Rowe Price has good managers and in the context of managed funds, low ER. Their managed funds are generally cheaper than Fidelity's managed funds.

Would't a low cost provider that allows freedom to invest w/ Vang be better?

Maybe. As I mentioned, I am not opposed to low-cost managed funds. So from my perspective, a percentage fee seemed like a rip-off, just for doing some paperwork. Yes, the paper work is annoying, but that much money for doing paperwork offends me just on principles.

Also, before I opened the Roth Solo 401(k), I had a SEP-IRA with Vanguard. I left the SEP intact so keep some allocation at Vanguard. Roth IRA is also with Vanguard. So I still feel like I have 'freedom'.

Do you see any risk w/involving 3 rd party?

There were too many questions I was uncomfortable with which is another reason I went with the big institution to administer my plan.If you have lots of questions, will they answer them to your satisfaction? What will these guys do if the law changes? Do they keep up with all these changes and notify you? What if they screw up and/or the government disagrees with their interpretation of something?

(I opened the Roth Solo 401(k) the first year it was available and even T. Rowe Price's lawyers were having trouble interpreting all the clauses of the law. To their credit, their representatives spent a lot of time with me trying to make sure everything was right.)

What happens if Vanguard or anybody decides to make it more difficult for 3rd parties to administer plans? Also, I wasn't clear on what's involved if you wanted to change administrators (say Vanguard begins to offer it directly). Will there be fees or a penalty? Will they make your life a living hell trying to get out from their service? And what if these guys decide to call it quits? What happens? Or what if these guys just suddenly disappear. I don't know anything about these people. Generally speaking, I at least know who T. Rowe Price is.

This is not to say that there is anything wrong with these 3rd party services. I am just more paranoid and don't like to be a guinea pig. Maybe over time, more people will be able to share experiences and details to where I feel comfortable. But maybe by that time, Vanguard might just offer the service directly.

Is it complicated to administer the ROTH version? (Wife has no trouble w/our current solo 401-k...only us 2 ) ?

T. Rowe Price carries most of the burden on administration. I really don't do much anymore. There is no difference between the Roth and non-Roth paperwork for me except for designating whether my contribution is going to be Roth or non-Roth. Doing taxes is the only time I seem to do any work on this any more which I don't technically consider plan administration. It's not terribly difficult there either. You just need to remember to pay taxes (not defer) on Roth contributions.

[not2late]

Just talked w/ flagship rep who called over to small business dept.

They will not fully commit ; says they never would . They are,however, planning /hoping but would not announce until finalized later this year... if it doesn't fall thru. So, there is hope but I'm still thinking the 3 rd party w/ about $200 /yr fee and Vang "holding" a solo 401-k ROTH is a better offer.

Does anyone know if a husband/wife sub-s can just note to the minutes and terminate an existing solo 401-k and start afresh next yr with either the vang solo or a 3 rd party solo 401-k ROTH?

[Socrativestor]

Fidelity is a good option because they have the Spartan funds and you can buy ETFs for anything else.

But you can't have a Roth Solo 401(k) -- which for me is a dealbreaker.

OTOH, I believe you have TRP brokerage accounts for your TRP Trad Solo 401(k) and Roth Solo 401(k) -- either for no or small annual fee -- and then access Vanguard (and other) ETFs to your heart's content. If you limit purchases to once a year, shouldn't be too expensive.

Now that I think about it, if this is true, then TRP might be be best overall (if VG itself is not available):
* Trad and Roth Solo 401(k)s
* large institution / no 3rd parties
* low cost access to low cost funds/ETFs

[peter71]

Fidelity is a good option because they have the Spartan funds and you can buy ETFs for anything else.

But you can't have a Roth Solo 401(k) -- which for me is a dealbreaker.

OTOH, I believe you have TRP brokerage accounts for your TRP Trad Solo 401(k) and Roth Solo 401(k) -- either for no or small annual fee -- and then access Vanguard (and other) ETFs to your heart's content. If you limit purchases to once a year, shouldn't be too expensive.

Now that I think about it, if this is true, then TRP might be be best overall (if VG itself is not available):
* Trad and Roth Solo 401(k)s
* large institution / no 3rd parties
* low cost access to low cost funds/ETFs

Socratc! Where have you been on the TIAA-CREF boards to gloat over the fact that everyone (me included) has been moving out of the TIAA Real Estate Account (not that we lost any money in it, but still )

All best,
Pete

[not2late]

To clarify , Vang might offer 401-k but extremely unlikely to offer the ROTH version (Fido hasn't come w/it in the 2 1/2 yrs I've been w/ their 401-k solo)

rogov4321...thank you. Your wise points and being a little paranoid myself ,
have quickly got this concern into the right file . This is not something I
want to risk any chance of screwing up...these stupid govt regulations changing nearly monthly is sad . I wouldn't think this stuff is rocket science?

Think I will either go w/ TRP (index only) for the Roth or forfeit the Roth , stay w/Fido's 401-k until and if Vang offers theirs.

[Eric]

One advantage of the "Single(k)" provider I mentioned above is that they offer a Roth option for a one-time (not recurring) $99 fee. Again, I don't know enough about that provider to endorse it, but their package is intriguing.

[carlsworld]

Cite a source, please. I and many others have been told nothing so definite.

I talked to a small business representative at Vanguard in January. She said Vanguard has been working on designing the product and that I should try calling back in several months to see about it.

She also mentioned I could use a third-party in the meantime. I looked into the third parties, and the annual fees they charge (lowest I found was 0.25% pa) exceed what I pay in commissions to buy Vanguard ETF's from my Fidelity self-employed 401(k), so I didn't see the point in switching to a third party.

I called another small business representative at Vanguard in March to see if there was any new info, and he also said Vanguard was working on the product, but couldn't give any information about it. I suppose they don't want their customers to plan for a product that could get delayed or canceled, so that's probably why they're being quiet.

That's why I said they're planning to roll one out. There are no guarantees.

[linenfort]

Does anyone know if Vanguard is considering offering individual 401(k) Plans in the near future?

Hi Sonoran -
I don't know about the future, but I did ask Vanguard about this very recently when my accountant told me about Solo 401k's. I begrudgingly started setting up a new account with Fidelity. (This is all mentioned here at this forum. If you search for Solo, you'll find it).

I'd like to keep everything with Vanguard, but I will probably just buy VEU and VTI from the Fidelity Solo.

Good luck to you.
l.

[not2late]

I will tend to follow the excellent comments by rogov4321 per 3 rd party involvement. Thank you 4321 for great insight and warning .

Talked w/TRP at length today but I have decided that the ER of their funds
and the charges they impose for "transactional" cost for fund families not approved (Vang & Fido are only ones I asked about) was cost prohibitive over the long run .

Conclusion IMO...

1. If moving forward ask a lot of questions

2. I think I'll stay w/ Fido's non-roth solo 401-k and kill it at end of 2009 and convert as many of our various IRA to Roth as deemed appropriate and crank up the best plan available at that time. If Vang, in fact ,comes with a non-ROTH 401-k for 2009 , I'm definitely interested ( my guess 50/50 they will ) , however, I would not give them a 1 chance in 100
at coming w/ the ROTH version.

[Socrativestor]

Inspired by this thread I emailed Vanguard to inquire. Their response in relevant part:

Vanguard does plan to offer an Individual 401(k) plan later this year. At
this point, we do not have any other information available. However, when
the information becomes available it will be posted on our website.

To my mind this is great news. The only remaining questions are:
1) will they offer a Roth version in addition to the Traditional version?
2) will this be in place in time to take advantage of this year? (e.g. it's of little good if they open for business it on Dec 25).

I guess all we can do is wait.

* * *

On a related front I also contact TRP. You can have a brokerage account for $30/yr in which you can hold ETFs and/or non-TRP funds.

However, due to current limitations in their system or something, you *cannot* have 2 brokerage accounts: one for Trad 401(k) and one for Roth 401(k). The Roth 401(k) must be held in TRP mutual funds. I was told, however, that they are working on it and hope to offer full flexibility "soon".

* * *

So, by the end of this year apparently all "big 3" (Vanguard, Fidelity, T. Rowe Price) will be in the Individual 401(k) biz, though perhaps only the latter will be offering Roth option.

Thanks for all the good info, inspiration, etc.

[MossySF]

Talked w/TRP at length today but I have decided that the ER of their funds and the charges they impose for "transactional" cost for fund families not approved (Vang & Fido are only ones I asked about) was cost prohibitive over the long run .

TRP has a few index funds that aren't too bad.

Equity Index 500 - 0.35% ER
Extended Equity Market Index - 0.40% ER
Total Equity Market Index - 0.40% ER
International Equity Index - 0.51% ER
U.S. Bond Index - 0.30% ER

But of course, if you can even lower ERs with a Fidelity Solo 401K, not much point in choosing TRP unless you want the Roth Solo 401K option.

[not2late]

1 more comment...

There are unique differences between a small business owner and the various problems/decisions we face vs most diehards. I get over loaded at times in digesting just this sites very valuable info..._ell, my business consumes me !

Can this sight meet other needs we have. Would it be appropriate or allowed,
how can it be flagged for my attention(I just don't have time to read all the info provided here . Are there other sites for this purpose that have the EXPERT advise and good folks here??? As a small business owner, there
are many subjects that could be explored.

I have found this thread very informative but I'm thinking there are many more opportunities.

Your comments , please

[rogov4321]

However, due to current limitations in their system or something, you *cannot* have 2 brokerage accounts: one for Trad 401(k) and one for Roth 401(k). The Roth 401(k) must be held in TRP mutual funds. I was told, however, that they are working on it and hope to offer full flexibility "soon".

I forgot about that one since I don't have a brokerage account with them. I'm glad you mentioned that. I did ask about that once. They said the problem was that they contract out the online brokerage service to a 3rd party and the third party was not setup to deal with mixed pre-tax/post-tax holding. The Roth Solo 401(k) it is technically one account, and not two separate accounts (which works to your advantage when dealing with fund initial minimums). As a plan administrator, T. Rowe Price is required to keep track of the Roth and traditional money since an account may comprise of both. (All of the 20% 'employer' contributions must be tax-deferred.)

This in itself isn't entirely interesting. T. Rowe Price needs to fix this problem. But I wouldn't be surprised to see Fidelity, Vanguard, and anybody else rolling out a Roth Solo 401(k) to have these same kind of problems at first. That may partly explain Fidelity's and Vanguard's reluctance to offer the plans.

So please keep writing letters to Vanguard (I hear real letters, not email counts more).

[Socrativestor]

However, due to current limitations in their system or something, you *cannot* have 2 brokerage accounts: one for Trad 401(k) and one for Roth 401(k). The Roth 401(k) must be held in TRP mutual funds. I was told, however, that they are working on it and hope to offer full flexibility "soon".

I forgot about that one since I don't have a brokerage account with them. I'm glad you mentioned that. I did ask about that once. They said the problem was that they contract out the online brokerage service to a 3rd party and the third party was not setup to deal with mixed pre-tax/post-tax holding. The Roth Solo 401(k) it is technically one account, and not two separate accounts (which works to your advantage when dealing with fund initial minimums). As a plan administrator, T. Rowe Price is required to keep track of the Roth and traditional money since an account may comprise of both.

OK, so let's go back to square one for a minute.

Are you saying / is it true that the Roth component of a Solo 401(k) is not held in a technically distinct (sub-)account? e.g. you could contribute $5,000 pre-tax and $5,000 post-tax to the same mutual fund account rather than into two distinct accounts of the same fund? i.e. 2 VFINX accounts of $5,000 each rather than 1 VFINX account of $10,000?? If so, how could anyone possibly keep track of the two components over time?? This way lies madness!

If there are distinct (sub-)accounts then I don't see why they'd have a hard time letting you have two brokerage accounts. Or even more wildly, *even if* both components are in a single "account" why couldn't you have two sub-accounts that inherently kept the separate funds separate? e.g. brokerage account 123456789-T and brokerage account 123456789-R whcih together constitute Solo 401(k) account 123456789??? Isn't this another road to Dublin?

[jcompton]

e.g. you could contribute $5,000 pre-tax and $5,000 post-tax to the same mutual fund account rather than into two distinct accounts of the same fund? i.e. 2 VFINX accounts of $5,000 each rather than 1 VFINX account of $10,000?? If so, how could anyone possibly keep track of the two components over time?? This way lies madness!

That can happen even in IRAs with both deductible and non-deductible contributions, which you can commingle in the same fund if you are so inclined.

Any plan with an employer contribution already has to keep track of different sources inside the same investment account, down to the individual fund level. This strikes me as not being terribly different.

[not2late]

There are definitely 2 distinct accounts ( account #'s ) with a roth solo 401-k IRA...1 for the employee portion which comes from / out of paycheck and another totally distinct acc # for your co. contribution ...never to be intermingled . The employee piece is the Roth piece...never to be taxed on principle or growth forever . The employer piece is deductible but the contribution and the future growth, etc will incur your or your heirs ordinary tax bracket rates upon withdrawal. Each can have a corresponding brokerage
acc that can flow back and forth ( sweep ) if you make investment selections outside the "FAMILY OF FUND" . There is no need of the brokerage acc if you buy only the TRP or Fido or Vang fund offerings .However, watch the cost they will impose if you don't buy w/in their family . That's the catch in my opinion .

This is the way I understand it...but I'm not the brightest light here...

you experts respond

[not2late]

1 last note and I'm in bed for tonite...

Has everyone read Ed Slott's book ( Parlay Your IRA Into A Family Fortune).

I stumbled across this book before finding the "Diehards"

This is a must read if looking at the financial aspects of any type ROTH.

The Diehard site seldom brings up this info and I am certainly not knowledgeable enough to start a post... but there are definitely some interesting concepts which I personally think are as valuable as the insight and value offered by the Diehards with sound investment strategies .

I am just beginning to see some of all this light ( I hope ) .

I don't think this post and struggles many of us face is relevant to a vast majority of Diehards .

Hence, do we , as business owners, struggle with similar issues that we can share and gain knowledge and strength from?

Have a good sleep
not2late

[Socrativestor]

e.g. you could contribute $5,000 pre-tax and $5,000 post-tax to the same mutual fund account rather than into two distinct accounts of the same fund? i.e. 2 VFINX accounts of $5,000 each rather than 1 VFINX account of $10,000?? If so, how could anyone possibly keep track of the two components over time?? This way lies madness!

That can happen even in IRAs with both deductible and non-deductible contributions, which you can commingle in the same fund if you are so inclined.

Any plan with an employer contribution already has to keep track of different sources inside the same investment account, down to the individual fund level. This strikes me as not being terribly different.

Are these really the same? The IRA has a "basis" which is the total non-deductible contributions. Everything above the basis is taxed at withdrawal -- i.e. *all* earnings (regardless of source) plus deductible contributions. A VA works the same way.

For a 401(k), the Roth component (non-deductible contibutions + attributable earnings) is not taxed at withdrawal, while the Traditional component (deductible contribution + attributable earnings) are fully taxed at withdrawal. There is no "basis". Or rather the basis keeps changing to include Roth earnings. This seems like an accounting nightmare, but maybe I'm mistaken.

There are definitely 2 distinct accounts ( account #'s ) with a roth solo 401-k IRA...1 for the employee portion which comes from / out of paycheck and another totally distinct acc # for your co. contribution ...never to be intermingled . The employee piece is the Roth piece...never to be taxed on principle or growth forever . The employer piece is deductible but the contribution and the future growth, etc will incur your or your heirs ordinary tax bracket rates upon withdrawal. Each can have a corresponding brokerage
acc that can flow back and forth ( sweep ) if you make investment selections outside the "FAMILY OF FUND" . There is no need of the brokerage acc if you buy only the TRP or Fido or Vang fund offerings .However, watch the cost they will impose if you don't buy w/in their family . That's the catch in my opinion .

This is the way I understand it...but I'm not the brightest light here...

you experts respond

I'm no expert, but I think you are confusing two things: employer vs employee contributions and Traditional vs Roth contributions. Yes, the employer contribution must be Traditional (not Roth), but the employee contribution can be either at the employee's discretion. It's a 2x2 chart with 1 cell precluded.

Code: Select all

                                 TRAD                  ROTH

EMPLOYER                                             XXXXXX

EMPLOYEE

In other words, both the employer and employee bits *could* be in a Traditional account. After all, they had to have been prior to the Roth 401(k) innovation. Would they still have had 2 account numbers?

Sounds more like you are confirming my suspicion that Trad and Roth components are given separate account numbers never to be commingled and that you have put your employee portion exclusively in Roth. But a Trad-only (or the Trad-component of a) 401(k) might well (?) have a single account that did in fact commingle the employer and employee bits -- because the tax treatment of the withdrawals is identical.

Anyway, that's how it looks to me. Willing to be corrected of course.

[rogov4321]

e.g. you could contribute $5,000 pre-tax and $5,000 post-tax to the same mutual fund account rather than into two distinct accounts of the same fund? i.e. 2 VFINX accounts of $5,000 each rather than 1 VFINX account of $10,000?? If so, how could anyone possibly keep track of the two components over time?? This way lies madness!

That can happen even in IRAs with both deductible and non-deductible contributions, which you can commingle in the same fund if you are so inclined.

Any plan with an employer contribution already has to keep track of different sources inside the same investment account, down to the individual fund level. This strikes me as not being terribly different.

I think this is a very good observation.

So let me step back and try to simplify things.
For T. Rowe Price, yes I believe it is only one account. (I only see one account number.)

Yes, they combine pretax and post-tax money into one account. So if there is a $10,000 minimum to get into a fund, I can combine $5000 pretax + $5000 post-tax. It just looks like a single blob.

Yes, this is madness (but the whole tax system is madness). This is why their brokerage service doesn't work with these accounts yet. Internally T. Rowe Price is responsible for tracking the pre-tax and post-tax separately. This also includes tracking how distributions are distributed among the two. They don't show me this stuff in my statements. However, I have been able to request the information so I can track it too.

There are definitely 2 distinct accounts ( account #'s ) with a roth solo 401-k IRA...1 for the employee portion which comes from / out of paycheck and another totally distinct acc # for your co. contribution ...never to be intermingled . The employee piece is the Roth piece...never to be taxed on principle or growth forever . The employer piece is deductible but the contribution and the future growth, etc will incur your or your heirs ordinary tax bracket rates upon withdrawal. Each can have a corresponding brokerage
acc that can flow back and forth ( sweep ) if you make investment selections outside the "FAMILY OF FUND" . There is no need of the brokerage acc if you buy only the TRP or Fido or Vang fund offerings .However, watch the cost they will impose if you don't buy w/in their family . That's the catch in my opinion .

This is the way I understand it...but I'm not the brightest light here...

you experts respond

I'm no expert, but I think you are confusing two things: employer vs employee contributions and Traditional vs Roth contributions. Yes, the employer contribution must be Traditional (not Roth), but the employee contribution can be either at the employee's discretion.

Yes, Socrativestor is correct here. 'Employer' contributions must be tax-deferred, but 'Employee' contributions can be either/or or both. I get to choose my own allocation between tax-deferred and after-tax. One strategy one might play is if they are on the edge of a tax bracket, split the employee contribution to tax deferred just enough to keep under the bracket. Then put the rest as Roth.

Also, as self-employed, I am both the employee and employer. (The terminology is really stupid.) I have one fund account number and one bank account number. T. Rowe Price has a little selection box to let you specify if a contribution will be Employer, Employee deferred, or Employee Roth.

[not2late]

Sorry guys for confusion...

I have never had a Roth but in investigating this 401-k roth I have never considered anything other than an after tax employee contribution...Just didn't know employee had a choice.Just wife and I and we would do after tax.

Again, we don't have 1 now but spent over 30 minutes w/the TRP guy yesterday(retirement dept) and he clearly explained after tax and before tax would be kept seperate . Frustrating when the source , itself , gets confused.

[rogov4321]

Sorry guys for confusion...
Again, we don't have 1 now but spent over 30 minutes w/the TRP guy yesterday(retirement dept) and he clearly explained after tax and before tax would be kept seperate . Frustrating when the source , itself , gets confused.

Well, I don't think the TRP guy is confused. He is technically correct that the pre-tax/post-tax will be kept separate. A plan administrator is required to track this. What I'm saying is that to the end user, it is one giant blob in one account, not 2 or 3 separate accounts.

[aainvestor]

I don't think the TRP guy is confused. He is technically correct that the pre-tax/post-tax will be kept separate. A plan administrator is required to track this. What I'm saying is that to the end user, it is one giant blob in one account, not 2 or 3 separate accounts.

That is how my Roth 401(k) looks. The statment breaks out totals of pre and post tax money but the shares are all mixed together as one account.

I would second the desire for some sort of seperate account for pre vs. post tax money.

F-

[rs2007]

Fidelity Solo 401k handles all the paperwork with no annual fee and is nice because you get buy ETFs (like Vanguard ones!) using their regular commission schedule, which at $50k in household assets is $10.95/trade.

Add a 0.25% expense ratio on top of a Vanguard mutual fund account, and comparing with using the equivalent ETFs + $11/trade and using Fidelity Spartan for certain index funds, I chose Fidelity.

[not2late]

Just spent time w/Vang's small business dept on issues w/ consolidating several old Ira's . In kicking around several ideas the rep mentioned that they were definitely looking at the solo 401-k and he felt it was definitely better than a 50/50 chance later this year . He then said if it did , in fact, come out , the ROTH version would be included...I nearly fell out of my chair.

Seemed more on top of these developments than any one I had previously
talked with.

I'm now giving this a 90% chance ( both of them ).

[chaser]

Just spent time w/Vang's small business dept on issues w/ consolidating several old Ira's . In kicking around several ideas the rep mentioned that they were definitely looking at the solo 401-k and he felt it was definitely better than a 50/50 chance later this year . He then said if it did , in fact, come out , the ROTH version would be included...I nearly fell out of my chair.

Seemed more on top of these developments than any one I had previously
talked with.

I'm now giving this a 90% chance ( both of them ).

ooh. they tell you when to check back?

[not2late]

I'm sure there would be an announcement but it might not be a big one . I do not want to change plans in mid year anyway. I'll check back about Oct..- Nov .

I get the impression the switch to this plan ( if it becomes reality ) can be done very quickly w/ out many problems . However , we're a husband/wife
only business...I have no idea how complicated this could be as the # of employees increase.

[Clevelander]

Anyone heard any news from Vanguard on this subject? I currently have a Self Employed 401(k) with Fidelity, but would likely move it over to Vanguard if and when they finally decide to offer one.

[VGRunner]

Anyone heard any news from Vanguard on this subject? I currently have a Self Employed 401(k) with Fidelity, but would likely move it over to Vanguard if and when they finally decide to offer one.

VG does not offer personal 401k's yet. That doesn't mean they wont...

[not2late]

Clevelander

I become frustrated until I rememberer and realize not to worry about things out of my control . Have a bad habit with this one . We all love Vang but Fido is a very close 2 nd and certainly better than other options IMO .

We'll be patient for now ...another 1 I need to grasp ... me learning patience is much more important than when or whether Vang moves on this .