Solo 401k / TD Ameritrade

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naaduve
Posts: 7
Joined: Tue Aug 14, 2018 8:28 am

Solo 401k / TD Ameritrade

Post by naaduve » Tue Aug 14, 2018 8:55 am

Hi All, I am a new memeber in this forum (although I have read many many discussions on this forum). Currently I have a solo401k account with TD and its managed by TD with the fee of 1% of the asset. I have this account with them since 2011 and my totol return so far is 5.08% with the aggressive portfolio. I think this is really a poor performance when I compare it with the other plan peformances discussed here. To be honest I'm hands off investor and that is the reason I let TD invest my money. I also find it very difficult to generate the performance reports or finding the fees easily. In short I would like to move into some other carrier where I can see more transparency in fees and easy to see the performances for different months, year etc. Ideally carrier with the low managed fee or the carrier with less confusing selection of funds with clear indication of costs to me so that I can manage it myself. I have about $240k in my 401k and about 30k in investments at TD. I know there are many people here who have lots experience with different carriers and I need your help in picking the carrier who meets my criteria.

Thanks
Nick

Investing.Newbie
Posts: 50
Joined: Wed Oct 11, 2017 1:23 pm

Re: Solo 401k / TD Ameritrade

Post by Investing.Newbie » Tue Aug 14, 2018 11:27 am

I have my solo 401K with Fidelity. I'm happy with them. Their website is easy to use & you can find answers to all the questions in your post in their website. I found their customer service to be very helpful as well.

The reason I choose not to go with Vangurad is because they don't offer Admiral funds in their solo 401K. They do offer roth option. I depends on what features you need. You can also google and get lots of info on popular solo 401K providers. https://thecollegeinvestor.com/18174/co ... k-options/

I hope I provided you with some useful info. :happy Good luck !

Bronco Billy
Posts: 50
Joined: Tue Jan 23, 2018 11:27 pm

Re: Solo 401k / TD Ameritrade

Post by Bronco Billy » Tue Aug 14, 2018 11:39 am

Investing.Newbie wrote:
Tue Aug 14, 2018 11:27 am
The reason I choose not to go with Vanguard is because they don't offer Admiral funds in their solo 401K. https://thecollegeinvestor.com/18174/co ... k-options/
So was you able to buy Admiral funds at FIDO?

SelfEmployed123
Posts: 183
Joined: Sun Apr 15, 2018 8:57 pm

Re: Solo 401k / TD Ameritrade

Post by SelfEmployed123 » Tue Aug 14, 2018 11:45 am

Investing.Newbie wrote:
Tue Aug 14, 2018 11:27 am
I have my solo 401K with Fidelity. I'm happy with them. Their website is easy to use & you can find answers to all the questions in your post in their website. I found their customer service to be very helpful as well.

The reason I choose not to go with Vangurad is because they don't offer Admiral funds in their solo 401K. They do offer roth option. I depends on what features you need. You can also google and get lots of info on popular solo 401K providers. https://thecollegeinvestor.com/18174/co ... k-options/

I hope I provided you with some useful info. :happy Good luck !
+1. I set up my solo 401k with Fidelity earlier this year before all of the hoopla over 0 ER funds. The site is easy to use. I had crunched my numbers and decided I didn't need a Roth option. Also, the lack of admiral class funds at Vanguard's solo 401k was a big turnoff. It's a bit of a pain to get money into the Fidelity account. You either have to mail a check in or transfer funds from your back to a Cash Management Account, wait like 5 business days, then call and ask to have them transfer it into your retirement account. Still a good experience overall.
Bronco Billy wrote:
Tue Aug 14, 2018 11:39 am
Investing.Newbie wrote:
Tue Aug 14, 2018 11:27 am
The reason I choose not to go with Vanguard is because they don't offer Admiral funds in their solo 401K. https://thecollegeinvestor.com/18174/co ... k-options/
So was you able to buy Admiral funds at FIDO?
Yes, premium class funds are available in a solo 401k at Fidelity.
"Get what you can, and what you get hold, 'Tis the stone that will turn all your lead into gold." | -Benjamin Franklin

livesoft
Posts: 62776
Joined: Thu Mar 01, 2007 8:00 pm

Re: Solo 401k / TD Ameritrade

Post by livesoft » Tue Aug 14, 2018 12:36 pm

I've had a solo 401(k) at TDAmeritrade for a few years now. I have never paid a fee to them. How did you end up paying fees? That's not right.
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RIMDBogle
Posts: 83
Joined: Thu Jul 12, 2018 10:13 pm

Re: Solo 401k / TD Ameritrade

Post by RIMDBogle » Tue Aug 14, 2018 12:40 pm

Good to know this. I too have Solo 401K with TDA. I am not paying any fees, but not happy with their Commission FREE ETFS changes.

I think OP signed with their ameriwest managed services that charges fee. The too try to sell that to me. I did not bite it.

I hope this helps.

naaduve
Posts: 7
Joined: Tue Aug 14, 2018 8:28 am

Re: Solo 401k / TD Ameritrade

Post by naaduve » Tue Aug 14, 2018 3:37 pm

Yes, I use their managed services for which charge 1% of of the asset. I am not a savvy investor like most of you here and that is one of the main reason I let TD manage it and also I don't find enough time to do these myself as I am travelling most of the time. I am willing to learn if is simple enough to learn and manage.

livesoft
Posts: 62776
Joined: Thu Mar 01, 2007 8:00 pm

Re: Solo 401k / TD Ameritrade

Post by livesoft » Tue Aug 14, 2018 4:03 pm

I have seen that people who travel alot have a lot of time for reading. Is that true in your case? If so, then the Bogleheads reading list has a few simple books that you can read and then save yourself thousands of dollars in fees.

You might as well start saving now by calling up TDAmeritrade and tell them you no longer want to have them manage your 401(k) and to have them stop taking fees out of it.
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naaduve
Posts: 7
Joined: Tue Aug 14, 2018 8:28 am

Re: Solo 401k / TD Ameritrade

Post by naaduve » Tue Aug 14, 2018 5:41 pm

Hi Investing.Newbie. Yes I need a Roth option so I am thinking of doing the following 2 things

1) Roll over my i401k
2) Create a new roth i401k

I want to put away some after-tax money because I'm expecting some withdrawals in around 10 yrs time period for my kids college. I am thinking about roth i401k for that purpose because it will allow me to contribute more than the traditional roth IRA.

As you said, Fido does not have the roth option so I am thinking of rolling over my i401k to Fido and creating a new roth i401k plan with Vanguard (assuming Vanguard allows me to do so without having a traditional i401k with them). What I'm hearing in this forum is that Fido is easy to deal with but in my case I don't see a way to go all in with Fido. Overall im looking for some less complex process, if exist one.

Thanks
Nick

livesoft
Posts: 62776
Joined: Thu Mar 01, 2007 8:00 pm

Re: Solo 401k / TD Ameritrade

Post by livesoft » Tue Aug 14, 2018 5:51 pm

I have both a traditional i401k and a Roth i401k at TDAmeritrade with no fees.

I don't understand at all why you are rolling over anything. If you stay at TDAmeritrade that is the least complex process.

I would be very careful about using a solo 401(k) whether a Roth one or a traditional one for college expenses. I suppose if you are retired and over age 59.5 when college expenses show up, then you can withdraw without penalty. But you need to be very aware of possible penalties if you are still working and/or under age 59.5 or whatever your 401(k) plan has stated in the plan document.
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Spirit Rider
Posts: 8914
Joined: Fri Mar 02, 2007 2:39 pm

Re: Solo 401k / TD Ameritrade

Post by Spirit Rider » Tue Aug 14, 2018 6:44 pm

naaduve wrote:
Tue Aug 14, 2018 5:41 pm
Hi Investing.Newbie. Yes I need a Roth option so I am thinking of doing the following 2 things

1) Roll over my i401k
2) Create a new roth i401k

I want to put away some after-tax money because I'm expecting some withdrawals in around 10 yrs time period for my kids college. I am thinking about roth i401k for that purpose because it will allow me to contribute more than the traditional roth IRA.

As you said, Fido does not have the roth option so I am thinking of rolling over my i401k to Fido and creating a new roth i401k plan with Vanguard (assuming Vanguard allows me to do so without having a traditional i401k with them). What I'm hearing in this forum is that Fido is easy to deal with but in my case I don't see a way to go all in with Fido. Overall im looking for some less complex process, if exist one.
A 401k is a employer retirement plan, not just an account. You can not just rollover the account. You must:
  • Amend the 401k plan to the new provider.
  • Transfer the old account assets to the new account.
  • Close the old account.
Also, a single business can not have more than one 401k plan for the same class of employees.

You can not have a one-participant 401k plan at more that one provider. You can not have a Fidelity Self-Employed 401k at the same time as a Vanguard Individual 401k.

naaduve
Posts: 7
Joined: Tue Aug 14, 2018 8:28 am

Re: Solo 401k / TD Ameritrade

Post by naaduve » Tue Aug 14, 2018 6:47 pm

Hi Thanks. I will think about whether I need to continue with TD or not but so far my experience with them is very bad in terms of transparency and getting any reports out of their system.

I will be 54 yrs old when I take the money out of my roth 401k investments. I am thinking of rolling over my roth 401k to roth IRA before I do so. I know there is a rule that roth ira account need to be at least 5 yrs old before using it for the penalty free withdrawals. I will open this roth ira account way before than to avoid this situation. Also I know that roth ira gives better investment options as well. Only purpose of the roth i401k is that I can contribute more as a self-employed person. Am I missing anything here :( ?

Thanks
Nick

naaduve
Posts: 7
Joined: Tue Aug 14, 2018 8:28 am

Re: Solo 401k / TD Ameritrade

Post by naaduve » Tue Aug 14, 2018 7:02 pm

Spirit Rider wrote:
Tue Aug 14, 2018 6:44 pm
naaduve wrote:
Tue Aug 14, 2018 5:41 pm
Hi Investing.Newbie. Yes I need a Roth option so I am thinking of doing the following 2 things

1) Roll over my i401k
2) Create a new roth i401k

I want to put away some after-tax money because I'm expecting some withdrawals in around 10 yrs time period for my kids college. I am thinking about roth i401k for that purpose because it will allow me to contribute more than the traditional roth IRA.

As you said, Fido does not have the roth option so I am thinking of rolling over my i401k to Fido and creating a new roth i401k plan with Vanguard (assuming Vanguard allows me to do so without having a traditional i401k with them). What I'm hearing in this forum is that Fido is easy to deal with but in my case I don't see a way to go all in with Fido. Overall im looking for some less complex process, if exist one.
A 401k is a employer retirement plan, not just an account. You can not just rollover the account. You must:
  • Amend the 401k plan to the new provider.
  • Transfer the old account assets to the new account.
  • Close the old account.
Also, a single business can not have more than one 401k plan for the same class of employees.

You can not have a one-participant 401k plan at more that one provider. You can not have a Fidelity Self-Employed 401k at the same time as a Vanguard Individual 401k.
Hi Spirit Rider, yes I read your replies in other threads regarding this subject and I completely forgot about it. Thanks for reminding me.
I will go with just one provider now. (I hope I can have solo 401k and solo roth 401k at the same provider) With the roth plan in place I have limited choices now; either stay with TD or move to Vanguard. When I was speaking to Vanguard few weeks back they said they will handle all the roll over process for me. I don't know how much truth in it, may be the devil is in the details.

Thanks
Nick

livesoft
Posts: 62776
Joined: Thu Mar 01, 2007 8:00 pm

Re: Solo 401k / TD Ameritrade

Post by livesoft » Tue Aug 14, 2018 7:17 pm

naaduve wrote:
Tue Aug 14, 2018 6:47 pm
Hi Thanks. I will think about whether I need to continue with TD or not but so far my experience with them is very bad in terms of transparency and getting any reports out of their system.

I will be 54 yrs old when I take the money out of my roth 401k investments. I am thinking of rolling over my roth 401k to roth IRA before I do so. I know there is a rule that roth ira account need to be at least 5 yrs old before using it for the penalty free withdrawals. I will open this roth ira account way before than to avoid this situation. Also I know that roth ira gives better investment options as well. Only purpose of the roth i401k is that I can contribute more as a self-employed person. Am I missing anything here :( ?

Thanks
Nick
Yes, I think you are missing many things. I don't think you will get any reports out of any of the other vendors. I use the free MS Money to create all my own reports from all my financial institutions. I think the only thing one can expect are monthly account statements which all vendor make available to clients.

With the TDAmeritrade solo 401(k) I can invest in anything and so can you. You seem to think you are limited, but you are not. A Roth IRA and a TDAmeritrade Roth 401(k) can invest in all the same investments.

Why do you think you can take money out of a Roth 401(k) without penalty when you are 54 years old? That's news to me. If you are still self-employed, then I don't even see how you can roll it over to a Roth IRA.
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Investing.Newbie
Posts: 50
Joined: Wed Oct 11, 2017 1:23 pm

Re: Solo 401k / TD Ameritrade

Post by Investing.Newbie » Wed Aug 15, 2018 10:30 am

Bronco Billy wrote:
Tue Aug 14, 2018 11:39 am
Investing.Newbie wrote:
Tue Aug 14, 2018 11:27 am
The reason I choose not to go with Vanguard is because they don't offer Admiral funds in their solo 401K. https://thecollegeinvestor.com/18174/co ... k-options/
So was you able to buy Admiral funds at FIDO?
I just bought Fido spartan funds.

naaduve
Posts: 7
Joined: Tue Aug 14, 2018 8:28 am

Re: Solo 401k / TD Ameritrade

Post by naaduve » Wed Aug 15, 2018 5:55 pm

livesoft wrote:
Tue Aug 14, 2018 7:17 pm
naaduve wrote:
Tue Aug 14, 2018 6:47 pm
Hi Thanks. I will think about whether I need to continue with TD or not but so far my experience with them is very bad in terms of transparency and getting any reports out of their system.

I will be 54 yrs old when I take the money out of my roth 401k investments. I am thinking of rolling over my roth 401k to roth IRA before I do so. I know there is a rule that roth ira account need to be at least 5 yrs old before using it for the penalty free withdrawals. I will open this roth ira account way before than to avoid this situation. Also I know that roth ira gives better investment options as well. Only purpose of the roth i401k is that I can contribute more as a self-employed person. Am I missing anything here :( ?

Thanks
Nick
Yes, I think you are missing many things. I don't think you will get any reports out of any of the other vendors. I use the free MS Money to create all my own reports from all my financial institutions. I think the only thing one can expect are monthly account statements which all vendor make available to clients.

With the TDAmeritrade solo 401(k) I can invest in anything and so can you. You seem to think you are limited, but you are not. A Roth IRA and a TDAmeritrade Roth 401(k) can invest in all the same investments.

Why do you think you can take money out of a Roth 401(k) without penalty when you are 54 years old? That's news to me. If you are still self-employed, then I don't even see how you can roll it over to a Roth IRA.
Hi LiveSoft, I did speak to many people and according to them - the same withdrawal rule applies to Roth 401K as the Roth IRA except the RMD. (RMD rule applies to roth 401k but not for roth ira) That means I can withdraw from Roth 401k penalty free for qualified higher education even before i'm 59.5 yrs old. I did verify this many articles on the internet as well.
What you said about the rollover from roth 401k to roth ira is correct, its not possible without having a qualified event like closing my company/plan etc. My main goal is the withdrawal for the college education and if I can do that with the Roth 401k then I don't even have to think about the rollover to roth ira. Another option that I have is non-roth after tax contribution (mega backdoor), I will do that later only when I max out my 401k contributions. My goal is to keep things simple as much as possible.

About TD, yes I would like to come out of their managed services as everyone recommending here. Do you have any recommendation on the allocation/funds ?

Thanks

Spirit Rider
Posts: 8914
Joined: Fri Mar 02, 2007 2:39 pm

Re: Solo 401k / TD Ameritrade

Post by Spirit Rider » Wed Aug 15, 2018 7:43 pm

naaduve wrote:
Wed Aug 15, 2018 5:55 pm
Hi LiveSoft, I did speak to many people and according to them - the same withdrawal rule applies to Roth 401K as the Roth IRA except the RMD.
I don't know who you talked to, but they were wrong.

There is a distinct difference in non-qualified distribution rules between the two. The Roth IRA has ordering rules; contributions, conversions, rollovers from qualified plans and earnings. Tax-free distributions first. Non-qualified Roth 401k distributions are subject to pro-rata taxation from first dollar.
That means I can withdraw from Roth 401k penalty free for qualified higher education even before i'm 59.5 yrs old. I did verify this many articles on the internet as well.
You are wrong here as well. That only applies to a Roth IRA. You can qualify for a Roth 401k hardship withdrawal only if you have exhausted all other college funding options. Even then hardship withdrawals from a Roth 401k are subject to the 10% early withdrawl penalty and non-qualified taxation.

naaduve
Posts: 7
Joined: Tue Aug 14, 2018 8:28 am

Re: Solo 401k / TD Ameritrade

Post by naaduve » Thu Aug 16, 2018 11:59 am

Hi Spirit Rider. Thanks again.

This post confirms what you said
https://www.investopedia.com/ask/answer ... enalty.asp

This and some other posts confirm what I said
https://www.sensefinancial.com/solo-rot ... r-college/

But I think you know this stuff and I tend to agree with you. Looks like this avenue is closed for me now

So do you think the mega-backdoor option is the better option to go about it ? (https://momanddadmoney.com/mega-backdoor-roth-ira/)

Thanks

AlmstRtrd
Posts: 49
Joined: Fri Dec 08, 2017 4:57 pm

Re: Solo 401k / TD Ameritrade

Post by AlmstRtrd » Thu Aug 16, 2018 12:20 pm

I too have both a Solo 401(k) and a Solo 410(k) Roth with TDA. I tried to set up these two accounts with Fidelity in 2014 when both my wife and I started them, but Fido didn't (and still does not) offer the Solo 401(k) Roth option.

Does anyone know why this is? I plead with them about once a year to give me a reasonable explanation but only ever get an answer along the lines of, "It's something that we know about and I will certainly pass your concerns along."

And no fees for me either in these TDA accounts.

RIMDBogle
Posts: 83
Joined: Thu Jul 12, 2018 10:13 pm

Re: Solo 401k / TD Ameritrade

Post by RIMDBogle » Thu Aug 16, 2018 12:59 pm

AlmstRtrd wrote:
Thu Aug 16, 2018 12:20 pm
I too have both a Solo 401(k) and a Solo 410(k) Roth with TDA. I tried to set up these two accounts with Fidelity in 2014 when both my wife and I started them, but Fido didn't (and still does not) offer the Solo 401(k) Roth option.

Does anyone know why this is? I plead with them about once a year to give me a reasonable explanation but only ever get an answer along the lines of, "It's something that we know about and I will certainly pass your concerns along."

And no fees for me either in these TDA accounts.
Thanks for sharing.

How does TDA separate 401K & Roth asset/funding for IRS reporting?

Does this arrangement support mega backdoor Roth avenue?

Thanks again.

SelfEmployed123
Posts: 183
Joined: Sun Apr 15, 2018 8:57 pm

Re: Solo 401k / TD Ameritrade

Post by SelfEmployed123 » Thu Aug 16, 2018 1:09 pm

AlmstRtrd wrote:
Thu Aug 16, 2018 12:20 pm
I too have both a Solo 401(k) and a Solo 410(k) Roth with TDA. I tried to set up these two accounts with Fidelity in 2014 when both my wife and I started them, but Fido didn't (and still does not) offer the Solo 401(k) Roth option.

Does anyone know why this is? I plead with them about once a year to give me a reasonable explanation but only ever get an answer along the lines of, "It's something that we know about and I will certainly pass your concerns along."

And no fees for me either in these TDA accounts.
Fidelity's administrative costs would rise if they offered a Roth option in their individual 401k plan. Fidelity already offers their Spartan index funds with rock bottom ER to solo 401k participants. Vanguard offers the Roth option but no Admiral Shares. TD Ameritrade does offer the Roth but you will be paying trading fees unless you stick with their commission free funds. There's no free lunch.
"Get what you can, and what you get hold, 'Tis the stone that will turn all your lead into gold." | -Benjamin Franklin

nyclon
Posts: 307
Joined: Fri Oct 02, 2015 5:30 pm

Re: Solo 401k / TD Ameritrade

Post by nyclon » Thu Aug 16, 2018 1:12 pm

naaduve wrote:
Tue Aug 14, 2018 8:55 am
Hi All, I am a new memeber in this forum (although I have read many many discussions on this forum). Currently I have a solo401k account with TD and its managed by TD with the fee of 1% of the asset. I have this account with them since 2011 and my totol return so far is 5.08% with the aggressive portfolio. I think this is really a poor performance when I compare it with the other plan peformances discussed here. To be honest I'm hands off investor and that is the reason I let TD invest my money. I also find it very difficult to generate the performance reports or finding the fees easily. In short I would like to move into some other carrier where I can see more transparency in fees and easy to see the performances for different months, year etc. Ideally carrier with the low managed fee or the carrier with less confusing selection of funds with clear indication of costs to me so that I can manage it myself. I have about $240k in my 401k and about 30k in investments at TD. I know there are many people here who have lots experience with different carriers and I need your help in picking the carrier who meets my criteria.

Thanks
Nick
You can search this forum for similar questions and feedback. I use etrade and am very satisfied.

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