Etrade Solo 401k most flexible? Problems?

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snettles
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Etrade Solo 401k most flexible? Problems?

Post by snettles »

I am planning on opening a solo 401k soon. I have been looking and it looks like etrade has the most flexibility. It has Roth, good rollovers, obviously brokerage, and loans. No one seems to have in-service rollovers out of their solo 401k's. I am fine buying vanguard ETF's and the small per trade fee is not important given how I will invest.

Does anyone have a better provider? Or find fault with the above?

Has anyone had significant problems with etrade?

I did search and read the relevant threads, so just trying to scare up new info. Thanks.

Scott
goodenoughinvestor
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Re: Etrade Solo 401k most flexible? Problems?

Post by goodenoughinvestor »

I have the very same questions. Fidelity doesn't allow Roth. Vanguard limits you to their own mutual funds (and I want to hold a Fidelity fund). So I'm not sure if there is any other choice. So it would be helpful to hear reviews from people who have used Etrade.
user5027
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Re: Etrade Solo 401k most flexible? Problems?

Post by user5027 »

goodenoughinvestor wrote:I have the very same questions. Fidelity doesn't allow Roth. Vanguard limits you to their own mutual funds (and I want to hold a Fidelity fund). So I'm not sure if there is any other choice. So it would be helpful to hear reviews from people who have used Etrade.
You can purchase Fidelity funds through a Vanguard brokerage account.
goodenoughinvestor
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Re: Etrade Solo 401k most flexible? Problems?

Post by goodenoughinvestor »

user5027 wrote:
goodenoughinvestor wrote:I have the very same questions. Fidelity doesn't allow Roth. Vanguard limits you to their own mutual funds (and I want to hold a Fidelity fund). So I'm not sure if there is any other choice. So it would be helpful to hear reviews from people who have used Etrade.
You can purchase Fidelity funds through a Vanguard brokerage account.
In a Vanguard individual 401k? My understanding after calling them was that I was limited to their own mutual funds.
FFFollower
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Re: Etrade Solo 401k most flexible? Problems?

Post by FFFollower »

I use TD Ameritrade. Easy to set up a solo 401k, has a Roth option, and comission free ETF's. I only use VT (total world) etf in this accout. I would recommend TD Ameritrade.
learnfpga
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Re: Etrade Solo 401k most flexible? Problems?

Post by learnfpga »

You are right. E-trade is most flexible and offers most options (roth 401k, loan, incoming rollover etc). In fact I advised a friend who took advantage of the loan option by rolling over IRA and eliminated his PMI.

I myself ended up with Fidelity because of spartan funds and incoming ira rollover. I didnt have any loan needs and I prefer bond funds over bond etf's and that's why i didn't go with e-trade.
sophiainvests
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

I've been researching this topic too, though have not yet talked to etrade.

Re discussion above, here are a few things I've found:

1) Vanguard Solo401k: Called yesterday: No brokerage and no admiral class funds; roth option allowed for employee contribution. So in this solo401 your only options will be only Vanguard investor class funds. However, all of them will be included. You can go to the Vanguard website for personal investors and put on the filter for investor class funds to see the options and the expense ratios. I compared the expense ratios to admiral class expense ratios (which tend to be the same in most cases as ETF expense ratios) for stock and international funds and found that, on average, investor class tends to be about 0.14% more, so if you have $100,000 invested in the solo 401k that's $140 more per year than you might pay if you had it invested outside of the 401k, but still at Vanguard in admiral or ETFs. Application needs to be received by Vanguard by Dec. 31 for one to be able to contribute before tax day in April, but both employer and employee contributions can have until tax day to be deposited.

2) Fidelity: Called today and confirmed that they still do not offer Roth option, though it's something they are discussing. They have full brokerage option with the solo 401k and I believe that would include free trading of a good number of ishares ETFs. The Spartan funds may be a good choice for those indexers who prefer mutual funds. Cannot rollover part of investments to Roth while the solo401k is active. (Think this may be IRS rule rather than plan rule.)

3) Etrade: Haven't called yet, but see that Vanguard funds require $19.99 transaction fee (investor class - no admiral available) and Vanguard ETFs require $9.99 trading fee. (Some ETFs, such as Wisdom Tree, offer free trades.) Have also heard they offer full brokerage, Roth option, and loans as the original poster mentioned. Website indicates employee contribution has to be made by Dec. 31, employer contribution by April 15 or so, but I want to double check the former - does't match with Vanguard's requirement.

4) Shcwab: From website, don't see Roth option, but have not called yet.

Really interested to hear what others are finding/thinking, since am guessing many of us would like to get this done before Dec. 31, so we can make contributions for 2013 by tax day.
user5027
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Re: Etrade Solo 401k most flexible? Problems?

Post by user5027 »

goodenoughinvestor wrote:
user5027 wrote:
goodenoughinvestor wrote:I have the very same questions. Fidelity doesn't allow Roth. Vanguard limits you to their own mutual funds (and I want to hold a Fidelity fund). So I'm not sure if there is any other choice. So it would be helpful to hear reviews from people who have used Etrade.
You can purchase Fidelity funds through a Vanguard brokerage account.
In a Vanguard individual 401k? My understanding after calling them was that I was limited to their own mutual funds.
I am not familiar with the Vanguard individual 401k. My Vanguard brokerage accounts are in taxable and rollover IRA.

Apologies for any confusion.
goodenoughinvestor
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Re: Etrade Solo 401k most flexible? Problems?

Post by goodenoughinvestor »

No problem. Everything about individual 401k options is confusing!
zrzhu111
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Re: Etrade Solo 401k most flexible? Problems?

Post by zrzhu111 »

sophiainvests wrote:I've been researching this topic too, though have not yet talked to etrade.

Re discussion above, here are a few things I've found:

1) Vanguard Solo401k: Called yesterday: No brokerage and no admiral class funds; roth option allowed for employee contribution. So in this solo401 your only options will be only Vanguard investor class funds. However, all of them will be included. You can go to the Vanguard website for personal investors and put on the filter for investor class funds to .......
What do you mean by solo401k? so If I have the brokerage account with Vanguard, I will be able to purchase amdiral class funds?
sophiainvests
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

zrzhu: by solo401k, i meant a special retirement plan/account that a self-employed person with no employees can set up. I think if you have an individual taxable account, roth IRA, a sep IRA, etc. you will have no problem to get admiral class shares if you hit the minimum required for each fund.

it's kind-of a bummer that the solo401k at Vanguard does not offer brokerage or admiral - the Vanguard person I talked to told me this is true of all their 401k plans, not just the solo.
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baw703916
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Re: Etrade Solo 401k most flexible? Problems?

Post by baw703916 »

I have an SEP IRA with E-Trade. I've been pretty happy with them. As mentioned previously, the best approach to holding Vanguard funds is via the ETF shares, Mr. Bogle's objections to ETFs notwithstanding. They do offer free reinvestment of ETF dividends, which you would probably want.

Brad
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mah001
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Re: Why don't you shop for a new plan document?

Post by mah001 »

Wouldn't a nonprototype or nonstandardized plan document give you more flexibility? You could restate your current plan onto a new plan document or just start a new plan to give you two. If you choose the former it is not considered a termination of the 'old' plan; it's a continuation of the life of plan 001 on a different document. Options are 1) a different boilerplate plan document at your current or a different vendor; 2)a somewhat less boilerplate 'volume submitter plan,' or 3)an 'individually designed plan.'
It would probably cost more for the plan document expense, but worth it if you can save more on custodians' fees and have more investing flexibility.

Do these vendors offer more flexibility in their plans not marketed as 'solo-k, uni-k, et al, such as a basic 401(k) plan for use by an employer with many employees? Such a plan should be at least as usable by a one person business. Do these cost more or less than the uni-k document? Are there other plans offering the desired features, e.g. Flexibility in movement of funds into and out of the plan and broader investment options? The funds in the plan are normally in a trust, one that's exempt under section 501(a), which basically is one that's a part of a section 401(a) 'qualified plan.' In addition to the very liberal federal rules on permitted plan investments, you need to consider what impact state law has. Sounds like most bogleheads funds are part of a 'master trust.'

Can't someone recommend a more user friendly plan document?

It's permissible for SEP and 401(k) to coexist. Once again it's a matter of being ok with the plan documents. Most SEPs use the latest version of Form 5305-sep as the actual plan document. But it precludes use of the form if you have another plan or are part of a controlled group, have leased employees, et al. The separate trust or custodial agreement (see various options offered for use by IRS, e.g. Form 5305-a) are identical to traditional IRA trust/custodial account, except for allowing SEP type contributions in addition to TIRA ctbns. These forms are not filed with IRS but are used as sep plan document and trust agreement. SEP is not a 401 qualified plan and should not be given a plan number except maybe for the unlikely event where a sep must file a form 5500 series 'information return,' under dept. of labor regs.
Sep is a section 408 plan of the ira family. See 408(k) for the top sep reference material out there.
Last edited by mah001 on Tue Nov 26, 2013 10:54 pm, edited 1 time in total.
sophiainvests
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

Mah001,

Thanks for your ideas on the plan document. I was told the same thing by Vanguard Small Business (yesterday), the IRS IRA specialist (today), and Fidelity (today) ---that a business cannot have more than one plan - e.g. SEP and solo 401k under same business cannot co-exist. However, I found other IRS materials online that match with what you are saying - that the problem is the standard SEP form - 5305-SEP. I have been assuming that Vanguard would have not flexibility on this, though did not ask and think I will. In one other thread a poster mentioned that Schwab may be the only one that allows a different plan for it's SEP. But this is worth researching. Have you heard of anyone successfully being allowed to adopt one of the other prototype SEP or 401k plans at places like Vanguard?
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Re: Etrade Solo 401k most flexible? Problems?

Post by White Coat Investor »

learnfpga wrote:You are right. E-trade is most flexible and offers most options (roth 401k, loan, incoming rollover etc). In fact I advised a friend who took advantage of the loan option by rolling over IRA and eliminated his PMI.
Ooh that's slick.

Great thread everyone. I just have a Vanguard one. It's okay for my needs aside from no admiral funds.
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Re: Etrade Solo 401k most flexible? Problems?

Post by White Coat Investor »

goodenoughinvestor wrote:I have the very same questions. Fidelity doesn't allow Roth. Vanguard limits you to their own mutual funds (and I want to hold a Fidelity fund). So I'm not sure if there is any other choice. So it would be helpful to hear reviews from people who have used Etrade.
Why do you say Fidelity doesn't allow Roth? The plan document talks about Roth contributions in parts 2.11 and 4.5. Did they tell you they don't do Roth contributions?

https://www.fidelity.com/bin-public/060 ... an-doc.pdf
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
sophiainvests
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

Yes, I called Fidelity small business retirement specialists group today and they told me clearly for their solo 40k, Roth employee contribution option is currently not available. Said they had been discussing it. This takes me back to Maah001's post: If they offer this for their broader 401ks, why not for the solo? Could we be allowed to set up a regular 401k (my guess is that there is an IRS rule against this, otherwise, why was legislation needed for the solo 401ks)?

Meantime, like the original poster, I am trying to learn more about Etrade and fees. In my case, seems it will be a relief just to have this all at Vanguard, but I do wonder whether over time, it will make significant difference to go instead with Vanguard ETFs in a solo 401k at Etrade or TD Ameritrade (which offers free trades for many Vanguard ETFs). Also, like the option to do bond ladders that a brokerage offers.

To stay fully at Vanguard and reduce the impact of the no admiral and no brokerage solo401k situation, one option may be if Vanguard will allow a SEP with a different prototype doc (per Maah001's post) - one that would allow you to simultaneously have the solo401 k and the SEP. Then, the employee contribution could go in the solo401k, while the employer one could go in the SEP, which will have access to both admiral and brokerage. If the solo business does well, more and more of the max allowed $51,000 or so per year could go into the SEP and thus have access to the admiral and the brokerage and potential rollover to roth. I am just guessing Vanguard would never allow it. But maybe some pressure can be applied. The person I spoke with at Vanguard Small business say it is a good idea for us to express our feelings / offer feedback about lack admiral in the solo 401k. However, I'm guessing they are more likely to yield on the SEP alternative plan than offering admiral in 401ks, since that may impact all of their 401ks not just solo ones -- and wow, that is probably a lot of ERs! On the other hand, also read the Dept. of Labor is pressuring providers to offer access to lower cost funds in the 401ks - seems it is an industry trend to squeeze a bit more out of captive audience in the 401ks.
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Re: Etrade Solo 401k most flexible? Problems?

Post by White Coat Investor »

I'm convinced. Etrade is best. They'll even incentivize you to move your solo 401K there. $200 for a $25K solo 401K. I'll probably move mine in a year or so when it gets that big.
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sophiainvests
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

hmmm... i'm still on the fence for my solo 401 k - vanguard vs etrade (or maybe TD Ameritrade if they have Roth option). One thing I've noticed on the net is some complaints about unexpected etrade fees - including inactivity fees each quarter. I am not sure if they have done away with this or if perhaps it doesn't apply to retirement accounts - did not see it on their site. However, in past years some complained that etrade liquidated their full holdings in a stock to get this fee ($40 per quarter, tbc). so, wonder if this is not the type of place for a very infrequent trader (perhaps just a handful of trades one time per year).

it's good to realize that moving the solo 401 k may be an option... I had been thinking that since each place offers its own "plan document," it may be more difficult to move than a roth or SEP so that therefore it is a semi-irreversible choice (e.g. too hard to change..), but sounds like it's not.
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Re: Etrade Solo 401k most flexible? Problems?

Post by SGM »

E*TRADE solo 401k is flexible. One can get Vanguard ETFs that have lower ERs than investor class Vanguard MFs. Over the long haul that is a significant cost savings even with the brokerage fee for a purchase. You can also purchase individual stocks, if you so choose.

The only negatives to me with ETFs are the spread, which can either be in your favor or not, and having small amounts of cash idle. With a MF you usually can purchase a small amount with no fee and put small contributions to work immediately. If you have to pay a fee to purchase the MF then some cash will be better left on the sideline until you have enough to make a bigger purchase.

You can trade ETFs during the day. Maybe that is a plus or a minus.

I bunch up my contributions so it is not such a big issue, but if you are making contributions paycheck by paycheck you may have more cash on the sideline for longer. I am sure there are no cost to purchase MFs available through E*TRADE, probably with higher ERs. Any Vanguard MFs at E*TRADE would be investor class only and have purchase fees.

Fidelity did not offer a Roth. Their solo 401k is flexible too. You have no cost to purchase Fidelity MFs and you can buy Vanguard ETFs or individual stocks. Fidelity recently opened added some other company ETFs to no purchase fees, I believe.

When I started a solo 401k Vanguard only allowed it via a 3rd party. That has changed thank goodness. Only being able to use investor class funds is troublesome. I would only use Vanguard for a solo 401k if I could buy the ETFs.
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sophiainvests
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

EDIT AFTER POSTING THE FIRST TIME: I just noticed snettles (original post of this thread) found that no one seems to offer in-service rollovers out of the solo-401ks. So, not sure if what I found below at E-trade (rollover out any time) today is true - want to double check it. However, I did learn today that as of 2013 there is a new IRS rule that allows roth rollovers from 401ks - Vanguard confirmed this, but noted that Vanguard does not yet allow Roth rollovers out of their i401ks. Maybe since it's a new rule, they will be revising their plan document soon. 2ND EDIT: Now I'm reviewing the ETRADE "Plan Document" and "Adoption Agreement", it seems that no early distributions are allowed for "elective deferrals" and "qualified non-elective deferrals" - but isn't that everything we'd be doing with the i401k? - apologies for creating confusion. It's making me realize we can't really depend in all cases on what the retirement specialists are telling us.
***************************************************************************

Great input on this good question!

Wanted to add a point that I also discussed in the "looking at solo 401k and SEP options - which and where" thread:

Further adding to the Etrade Solo401k flexibility argument, a retirement specialist there told me today that their i401k plan allows rollovers out at any time (from either the deferred or roth portion of the i401k). This even beat Schwab (which told me their i401k rollover policy is 2 years after first investment for employee portion and 5 years after first investment) and of course Vanguard and Fidelity, which both told me no rollovers out until the plan is closed down. Etrade does have a transfer fee of $60 each time if someone wanted to rollover out of Etrade. I do want to double check the Etrade plan to make sure my current understanding is correct.

I am surprised at how different the rules are at different places. Shows you the plan really is the thing in many cases rather than IRS rules as you might guess on first glace. Am impressed that Etrade is so flexible compared to everyone else and wondering why. Have not talked in detail with TD Amertrade or WellsTrade (has anyone?), but hope to before making a final decision. Having all my other retirement funds at Vanguard, preferring Vanguard Funds and ETFs and feeling confident about them makes it hard to go somewhere else, but it is also nice to have as much flexibility as possible for the solo401k, particularly because solo-preneurs don't always know their income from year to year and may want the option of doing Roth conversions in down years.
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Re: Etrade Solo 401k most flexible? Problems?

Post by mah001 »

Etrade likely has the two year/5 year rule too, based on a couple of revenue rulings from the 1980's---1) the plan can permit distribution of funds once they've been in the plan two years; 2) the plan can permit distribution of funds once the employee's been a plan participant for 5 years. Elective deferrals by employee have different rules....age 59 1/2, etc.

Everybody should pay attention when the prototype plan sponsor prompts you to amend the plan. The prototype sponsor only infrequently will be able to amend plan without timely signature of the sponsoring employer.
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Re: Etrade Solo 401k most flexible? Problems?

Post by PaddyMac »

I haven't read all the details, but wanted to add that you can have a SEP-IRA AND a Solo 401k, so long as you open the SEP FIRST. This gives you lots of flexibility.

For the SEP-IRA (easy to set up, and free) you can easily open one at any brokerage. We have ours at Wells Fargo/self-directed brokerage, and can buy almost anything in it with 100 free trades a year. Here we save the employER contributions (roughly 20% of net profit when you do the worksheet). This is the SAME space as the employER contributions in the Solo 401k.

Then we have our Individual 401k at Vanguard (also free to set up), and save the employEE portion here, and their funds are fine. They charge $20 per year per fund, so keep it simple. (When you make a contribution, be sure to click the employEE option.)

But then I found that if I move $50,000 or more into a Vanguard taxable account, they waive ALL fees in the 401k account. So I did that, and now we can add more funds and all without fees. (This is a little confusing on their site; it's not $50K in your 401k that waives the fees, it has to be saved outside the 401k.)

hope that helps.

If you do this, be sure to open the SEP first - it's against the law to open a SEP if you already have a "qualified retirement plan". (I did a lot of research on this, asked my CPA and even the IRS. Lots of threads in August 2011 I believe.)
Code Commit
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Re: Etrade Solo 401k most flexible? Problems?

Post by Code Commit »

FFFollower wrote:I use TD Ameritrade. Easy to set up a solo 401k, has a Roth option, and comission free ETF's. I only use VT (total world) etf in this accout. I would recommend TD Ameritrade.
FFFollower, would you be able to elaborate a little more on the contribution process at TD Ameritrade? e.g. are you able to make employee and employer contributions completely online? Do they keep track of yearly employee/employer contributions? I appreciate any insight you could provide.

My experience with:
Vanguard: Online. There is small-biz site that you use to add employee/employer contributions. Also, both the small-biz and personal site will clearly report your employee/employer contributions for any year. This is where I have my current plan.

Fidelity: Used it from 2005 to ~2011. There was no online process for contributing to solo 401k. I had to fill a paper form and hand over a check. Even after that, they really didn't keep track of employee or employer contributions. Not sure if they have improved this.

I would like to give TDAm a shot. I like the Vanguard ETFs available there and have sizeable rollover IRAs with them, which I would like to get inside a 401k (for future backdoor Roth).

Etrade: I haven't used them in years, so I am hesitant to add another broker to my active list. Loan provision is not attractive enough for me, to give up commission-free Vanguard ETFs.
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

I just called TD Ameritrade re their Solo 401k. Here's what I learned:

-employer and employee contributions available
-Roth available for employee contribution
-loan available
-on "rolling out," the "short story" is that you can't roll anything out until you close down the plan (sorry, forgot to ask about "rolling in")
-all the same benefits as other TD Ameritrade Accounts: brokerage, $10 ETF/Stock trades, >100 commission free ETFs, $50 mutual fund transaction fee, >2500 transaction free mutual funds (have to check but I think the transaction free mutual funds may include many Vanguard investor class funds - EDIT - I WAS WRONG ABOUT THE FOREGOING and the ETFs several Vanguard ones EDIT - WAS RIGHT ABOUT THE ETFS )
-downside(?): the retirement specialist emphasized this plan is for individuals. If you got employees, you would need to use a 3rd party to help with plan doc, though could keep the same plan with TD Ameritrade. The third party would probably charge in the hundreds per year (can't remember if it was $200-ish or $600-ish)
-contributions need to be in by tax day, plan set up by end of year
-no minimums or minimum activity fees (I do think there is a $60 for transferring the account elsewhere)

If TD Ameritrade really does have a good selection of transaction free Vanguard funds [EDIT - I WAS WRONG ABOUT THIS - VANGUARD FUNDS ARE NOT ON THE TD AMERITRADE TRANSACTION FREE LIST], this may make them the top pick for me, since there would then be less advantage of the Vanguard solo401k, unless one wanted a larger selection of Vanguard funds or to have all the money in the same place or if Vanguard has better options for transitioning once you have employees.

Re Etrade solo 401 comparison, the thing that was sounding better about Etrade was the possibility of "rolling out" of the 401k, but I feel less certain whether that is correct and need to check. If anyone knows the real rules, please let me know! If you're into Vanguard ETFs and funds, TD Ameritrade may otherwise be preferable. I do have a few wisdom tree funds, which Etrade offers commission free trades on. Think Etrade also has a fee for transferring account out. I believe Vanguard doesn't.
Last edited by sophiainvests on Tue Dec 03, 2013 2:58 pm, edited 1 time in total.
Code Commit
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Re: Etrade Solo 401k most flexible? Problems?

Post by Code Commit »

sophiainvests wrote: -downside(?): the retirement specialist emphasized this plan is for individuals. If you got employees, you would need to use a 3rd party to help with plan doc, though could keep the same plan with TD Ameritrade. The third party would probably charge in the hundreds per year (can't remember if it was $200-ish or $600-ish)
Is that really a downside? (given that Individual 401k's are only meant for self-employed individuals or small businesses with no outside employees except owner/spouse. If you got other employees, Individual 401k's are not allowed at any broker. That is an IRS rule).

By the way, thank you for all the digging you are doing and making the information available to all of us.
sophiainvests
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

Hi Code Commit,

Agreed - everyone has emphasized to me that these plans are only for one person (or one person and spouse). I just wasn't sure if conversion to multi-person plan would be possible without annual fee to third party at other places.

I was wrong about Vanguard mutual funds at TD Ameritrade. These are not on the transaction free list. However, there are commission free Vanguard ETFs - but for some reason I can't access the full list on TD Ameritrade's site.
sophiainvests
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

Hi everyone, I did a bit more follow up on Solo 401k "in service" distributions (since in comparing the options, also wanted to compare the flexibility of moving $$ out to other retirement accounts - particularly since at Vanguard I have mostly admiral shares in my other retirement accounts).

IRS website indicates 401 k employee contributions ("elective deferrals") cannot have "in service" distributions until age 59. So seems to be an across the board rule regardless of 401k provider - your employee contributions need to stay put in the plan until age 59 or you close it down. For employer contributions, the IRS website indicates the minimum age for distributions is determined by the plan doc, so seems this will depend on the provider of the doc.

Here's what I found about distribution of employer contributions:
Vanguard - have twice told me it's not allowed (the second time told me there's an amendment to the plan document even though the plan document seems to allow it). Forgot to check if they even allow it at age 59 - am assuming so.
E-trade, Schwab, and TD Ameritrade - all seem to allow distribution of employer contributions in 2 years (amount contributed only) or 5 years (up to full amount). E-trade indicates this in its plan summary, Schwab in its solo-401 k distribution request form, TD Ameritrade in its plan summary. (Note: Of these, Schwab is the only one without a Roth option for the solo-401k.)

For me, still considering TD Ameritrade or E-trade if I want to move towards Vanguard ETFs (right now in my VG accounts, I only have ETFs when there's a good reason, otherwise all admiral shares). TD Ameritrade probably preferable due to the good number of commission free Vanguard ETFs (looks like about 30 out of the total of 50+). (On the other hand, for those transferring in a good amount, Etrade offers $600.) Yet, am also considering sticking with Vanguard despite the lack of admiral shares, in order to stick with mutual funds. Have been browsing the threads on mutual funds versus ETFs. So far I've only bought into ETFS on one occasion (but bought substantial positions) - these were mostly those including international stocks, like VSS - and I do think there were some issues with substantial premium to NAV and spread. SO am wondering back on the solo 401k question, when you put premium to NAV and spread together, whether the Vanguard ETFs at say TD Ameritrade will still win out over investor class at Vanguard. For the long run buy and hold investor (>=15 years), I guess the answer is probably?
Code Commit
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Re: Etrade Solo 401k most flexible? Problems?

Post by Code Commit »

FWIW, I would not move my i401k from Vanguard to TD Ameritrade just for ETFs. It will have to be for allowing incoming rollovers from IRAs (to make way for backdoor Roth if/when I need it). Also, a good cash incentive would be nice.

But again, I have not needed the backdoor Roth yet. This year, after maxing out employee contributions for me/spouse + sizeable employer contribution (+ other business deductions like HSA), we were able to do the normal Roth contributions. So, I don't seem to have compelling reason to switch.
marbles100
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Re: Etrade Solo 401k most flexible? Problems?

Post by marbles100 »

sophiainvests wrote:Think Etrade also has a fee for transferring account out. I believe Vanguard doesn't.
ETrade fee for transfer of entire account $60, partial transfer $25.
Correct, Vanguard does not charge any fee for transferring account out.
link not working (?)
Code Commit
Posts: 138
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Re: Etrade Solo 401k most flexible? Problems?

Post by Code Commit »

marbles100 wrote:
link not working (?)
Working for me (I use Chrome). I get a PDF and I am not logged into TDAm or anything.
sophiainvests
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

Code Commit wrote:
marbles100 wrote:
link not working (?)
Working for me (I use Chrome). I get a PDF and I am not logged into TDAm or anything.
Not working for me and I also use Chrome. Very odd.
Code Commit
Posts: 138
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Re: Etrade Solo 401k most flexible? Problems?

Post by Code Commit »

sophiainvests wrote:Not working for me and I also use Chrome. Very odd.
Odd for sure. How about this? https://research.tdameritrade.com/grid/ ... ftNav=true

Here you can filter by fund category, fund family, etc. and then there is also a "Download Commission-Free ETF List" link to the PDF. Hope that works.
sophiainvests
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

Code Commit wrote:
sophiainvests wrote:Not working for me and I also use Chrome. Very odd.
Odd for sure. How about this? https://research.tdameritrade.com/grid/ ... ftNav=true

Here you can filter by fund category, fund family, etc. and then there is also a "Download Commission-Free ETF List" link to the PDF. Hope that works.
Thank you so much - this is working for me now! (Think I was there earlier, but it was not working for me then. Double checked the other link and it still is giving me error message.) Looks like a good list. I do invest in VG's Europe and Asia Pacific funds, so was hoping those two would be there (they aren't), but otherwise happy to see most of the Vanguard funds I invest in (6 out of 9) available in commission free ETFs at TD Ameritrade. I also invest in ishares developed countries large value (EFV) so was glad to see that on there as well. I also appreciate that the PDF shows both market returns and NAV returns. I am assuming that the market returns reflect effect of buying/selling at premium/discount to NAV issues, so that if those returns are close to NAV returns you can worry less about that issue and just focus on making sure the bid-ask spread is reasonable? EDIT ADDED LATER: Hmmm comparing those market returns and NAV returns does show a significant gap in some cases - perhaps worth considering in the ETF versus mutual fund decision.
Code Commit
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Re: Etrade Solo 401k most flexible? Problems?

Post by Code Commit »

sophiainvests wrote: I do invest in VG's Europe and Asia Pacific funds, so was hoping those two would be there (they aren't),...
I see VGK (Europe) on the list, but not VPL (Pacific).

I use ETFs only for equity funds and premium/discounts are usually tight for all the ETFs I use (except VSS where the premium is significant at times). The other consideration is whether one is okay with bond ETFs. There have been threads in the past where folks reported bond ETFs developing significant discounts at wrong times due to liquidity issues. That would be another reason for me to stay with Vanguard (i.e. to hold my bond funds).
sophiainvests
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

By the way, still researching the options and one other difference to note for Etrade and TD Ameritrade may be brokerage fees for bonds. E.g. looks like TD Ameritrade charges $25 for US Treasury Auction purchase while free at Etrade?

Also was talking to TD Ameritrade rep today re issues with transferring solo 401 k from one institution to another. If I understand correctly, you may actually have to officially cancel one (with IRS) and then start a new one. Not sure the implications of that or if in the Vanguard case that means you could not transfer the funds from another one solo 401k in, but sounds like it may be the case. Has anyone done this?
mah001
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Re: Etrade Solo 401k most flexible? Problems?

Post by mah001 »

For IRS purposes, a plan's existence can be continued by 'amending and restating' the plan onto a different document at a different vendor. It's not necessary to terminate one plan and start a new one.
sophiainvests
Posts: 94
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Re: Etrade Solo 401k most flexible? Problems?

Post by sophiainvests »

mah001 wrote:For IRS purposes, a plan's existence can be continued by 'amending and restating' the plan onto a different document at a different vendor. It's not necessary to terminate one plan and start a new one.
Thanks Mah001! That's good to know. If it is true the employer contribution can be rolled out after 2 (contribution from time made) or 5 years (total) at some places, then lifetime of the 401k does matter and better not to have to start over.
Topic Author
snettles
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Re: Etrade Solo 401k most flexible? Problems?

Post by snettles »

First, thanks to everyone who contributed to this thread as well as the simultaneous related thread. Very informative.

Just thought I'd circle back and say I have decided to go with eTrade for my solo 401k. For me the roll-in and Roth options outweigh the minor inconvenience of needing to use ETFs. I already use them in my Vanguard accounts for some things, so just not a big deal for me. Your milage may vary...

Thanks.

Scott
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