Individual 401 K

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Fisherman
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Individual 401 K

Post by Fisherman » Mon Apr 29, 2013 9:33 pm

Appreciate advice from the experts on the forum regarding my retirement plans.

My old employer merged with a big organization last year. The old employer's 401 k and profit sharing plan which I contributed to will be closed this year and I have to either roll that into new employer's 401a + 403 b plan ( which is managed by fidelity and doesn't have low cost funds, except 500 index and TBM, others with average expense ratio of 1%.) or to an IRA.

I have also been contributing to non-deductable IRA for the past 6 years, hoping to backdoor Roth, now, and every year. Obviously, rolling my old employment funds to IRA may not be good in this situation.

Rolling over to my current employer plan is feasible but without good options in the plan.

I get a little bit of additional income because of speaking engagements. Can set up and roll over into Individual 401 k (to shelter from Traditional IRA), and continue non-deductable IRA contributions every year and do back door Roth.

Thanks for your all's time

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JamesSFO
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Re: Individual 401 K

Post by JamesSFO » Mon Apr 29, 2013 10:04 pm

VG's small business/individual 401K product does NOT accept rollovers.

If you have 1099/Schedule C income you likely can qualify to create/open an Individual 401K.

Fisherman
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Re: Individual 401 K

Post by Fisherman » Mon Apr 29, 2013 10:16 pm

Thanks James . My speaking income is small but can file schedule C, even then it Vanguard doesn't accept roll over? What about fidelity I 401k, they told me that they will accept, I will reconfrm, thx

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tfb
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Re: Individual 401 K

Post by tfb » Mon Apr 29, 2013 11:50 pm

Fisherman wrote:Thanks James . My speaking income is small but can file schedule C, even then it Vanguard doesn't accept roll over? What about fidelity I 401k, they told me that they will accept, I will reconfrm, thx
That's correct. Vanguard doesn't accept. Fidelity does.
Harry Sit, taking a break from the forums.

bkkchris
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Re: Individual 401 K

Post by bkkchris » Tue Apr 30, 2013 12:14 am

I was planning on opening an i401k with Vanguard as well, until I discovered they offer no rollin option and do not allow Admiral share classes or ETF purchased in their i401k.

So I opened a solo 401k with Fidelity. So far been pretty happy and have been able to rollin all my various other IRAs.

Fisherman
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Re: Individual 401 K

Post by Fisherman » Tue Apr 30, 2013 4:29 am

Thanks tfb and bkchris.
How are the investment choices and ER with Fidelity solo 401k! Hope that there won't be a problem to do backdoor Roth from TIRA to RIRA(is solo 401k shielded like employer 401k).
As IRS rules are same for every company, why Vanguard doesn't allow rollovers!
Thanks

RobInCT
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Re: Individual 401 K

Post by RobInCT » Tue Apr 30, 2013 5:32 am

Fidelity is a good sponsor, and 500 index and TBM are good funds. I would not give up the backdoor Roth option for the sake of avoiding a Fidelity 401k that offered these options.

Also check to see whether your employer has the Fidelity Brokerage Link option. If it does, you can buy pretty much whatever you want.

Fisherman
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Re: Individual 401 K

Post by Fisherman » Tue Apr 30, 2013 8:39 am

Thanks, I just called Fidelity and the plan doesn't have brokerage link option. I wish the current plan has other index choices like Tips index, treasuries etc.

Any downside to set up a Fidelity individual 401k for roll over from previous job and contiue back door Roth with nondeductable IRA every year?

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tfb
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Re: Individual 401 K

Post by tfb » Tue Apr 30, 2013 10:55 am

Fisherman wrote:Any downside to set up a Fidelity individual 401k for roll over from previous job and contiue back door Roth with nondeductable IRA every year?
No.
Harry Sit, taking a break from the forums.

bkkchris
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Re: Individual 401 K

Post by bkkchris » Tue Apr 30, 2013 12:37 pm

Fidelity solo 401k seems like a great option. I too am looking to consolidate IRA's to allow for backdoor Roth.

The Fidelity solo 401k is pretty flexible. You can buy pretty much anything you want, be it fee-free Fidelity funds (many of which mimic Vanguard Index funds er), Vanguard funds (for a fee, and higher er as Admiral class shares are unavailable), stocks, etf's (I buy Vanguard ETFs in my Fidelity account), etc., etc.

They classify their solo 401k as a Profit Sharing Keogh, so I had a bit of issue transferring in a few IRA's from other companies just due to the account classification, but Fidelity is great with their customer service and we were able to sort it out.

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dianna
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Re: Individual 401 K

Post by dianna » Tue Apr 30, 2013 12:47 pm

JamesSFO wrote:VG's small business/individual 401K product does NOT accept rollovers.
Hmmmm. FWIW, I was able to rollover a previous i-401k with another vendor into a newly established VG I-401k without any problem about 2-3 years ago. So, I am surmising that the barrier is rolling over 401k plans that are not self-employed plans.

Yes, it is disappointing that VG does not offer Admiral shares within their i-401k plan. I don't understand it. Mais, que sera sera.

~dianna

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Duckie
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Re: Individual 401 K

Post by Duckie » Tue Apr 30, 2013 9:52 pm

Fisherman, like the others I recommend rolling the old 401k into either an Individual 401k plan at Vanguard or a Self-Employed 401k plan at Fidelity.

Vanguard does allow incoming rollovers from 401/403/457 plans. It says so on page 70 of the Individual 401k New Plan Kit for employers. They just don't allow incoming rollovers from IRAs.

If you choose Fidelity, they have several excellent Spartan funds that are equivalent to Vanguard's funds.

Fisherman
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Re: Individual 401 K

Post by Fisherman » Tue Apr 30, 2013 10:05 pm

Thanks, I spoke to fidelity, like you all said they will allow it. Will call vanguard again. I have got accounts at both, overall, fidelity retirement specialists appear to be more knowledgeable in this issue.

Thanks

bkkchris
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Re: Individual 401 K

Post by bkkchris » Wed May 01, 2013 12:45 am

I agree. I love Vanguard, but Fidelity have been really knowledgeable and helpful, and so far more informed when it comes to the i-401k questions.
Fisherman wrote:Thanks, I spoke to fidelity, like you all said they will allow it. Will call vanguard again. I have got accounts at both, overall, fidelity retirement specialists appear to be more knowledgeable in this issue.

Thanks

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