Best Solo 401k option?

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Loyalnine
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Best Solo 401k option?

Post by Loyalnine » Sat Apr 14, 2018 5:57 pm

Who has the best solo 401k option? I'm interested in investing in two funds: Total Stock Market and Total International. The plan must allow IRA rollovers (which knocks out Vanguard).

My top consideration set is Fidelity, E-Trade, and Schwab.

I like Fidelity's low expense ratio funds, but (based on this thread viewtopic.php?t=217342) it sounds like their contribution method is kind of a pain (electronic transfer, then call the next business day). Schwab seems to have even lower expense ratio funds, but I can't find much about their contribution method or other fees. I know the White Coat Investor recommends E-Trade, but I'm assuming that I'm either stuck with their weird commission-free ETFs or paying an extra $6.95 to get Vanguard/Fidelity ETFs, which are then higher expense ratio than Schwab's.

So, leaning towards Schwab, but I want to hear others' thoughts.

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ruralavalon
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Re: Best Solo 401k option?

Post by ruralavalon » Sat Apr 14, 2018 7:23 pm

Loyalnine wrote:
Sat Apr 14, 2018 5:57 pm
Who has the best solo 401k option? I'm interested in investing in two funds: Total Stock Market and Total International. The plan must allow IRA rollovers (which knocks out Vanguard).

My top consideration set is Fidelity, E-Trade, and Schwab.

I like Fidelity's low expense ratio funds, but (based on this thread viewtopic.php?t=217342) it sounds like their contribution method is kind of a pain (electronic transfer, then call the next business day). Schwab seems to have even lower expense ratio funds, but I can't find much about their contribution method or other fees. I know the White Coat Investor recommends E-Trade, but I'm assuming that I'm either stuck with their weird commission-free ETFs or paying an extra $6.95 to get Vanguard/Fidelity ETFs, which are then higher expense ratio than Schwab's.

So, leaning towards Schwab, but I want to hear others' thoughts.
I suggest Fidelity rather than Schwab for the solo 401k.

Fidelity has a total international stock index fund, Schwab does not have a total international stock index fund.

The differences in expense ratios between Fidelity and Schwab are tiny, and meaningless.
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Loyalnine
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Re: Best Solo 401k option?

Post by Loyalnine » Sat Apr 14, 2018 7:40 pm

ruralavalon wrote:
Sat Apr 14, 2018 7:23 pm
I suggest Fidelity rather than Schwab for the solo 401k.

Fidelity has a total international stock index fund, Schwab does not have a total international stock index fund.

The differences in expense ratios between Fidelity and Schwab are tiny, and meaningless.
Thanks - do you have direct experience with either? Good watchout on the International - I suppose I could adjust by just going 100% domestic equity and use the rest of my portfolio to get international.

My first priority is quality investment option(s)/low expense ratios, but I'm also interested in contribution method/ease of use.

PhillyBird
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Re: Best Solo 401k option?

Post by PhillyBird » Sat Apr 14, 2018 7:43 pm

I've been using Fidelity solo 401k for several years. I like it. Their index funds are as cheap as Vanguard's, but spit off more capital gains than Vanguard's (which I don't see as an issue since it's a tax deferred account). They allowed me to move pre-existing SEP-IRA into the 401k (had to go to local office and sign a paper and the money was in 401k later that day). The only weakness (IMHO) of Fidelity's 401k is inability to make deposits online. Per Fidelity's rep suggestion, I now use my bank's Bill Pay to send contribution checks automatically/scheduled interval to coincide with my payroll runs. This works just as well, and after a while you don't even think about it.

Loyalnine
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Re: Best Solo 401k option?

Post by Loyalnine » Sat Apr 14, 2018 7:51 pm

*accidentally double posted*
Last edited by Loyalnine on Sat Apr 14, 2018 8:00 pm, edited 1 time in total.

Loyalnine
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Re: Best Solo 401k option?

Post by Loyalnine » Sat Apr 14, 2018 7:53 pm

PhillyBird wrote:
Sat Apr 14, 2018 7:43 pm
I've been using Fidelity solo 401k for several years. I like it. Their index funds are as cheap as Vanguard's, but spit off more capital gains than Vanguard's (which I don't see as an issue since it's a tax deferred account). They allowed me to move pre-existing SEP-IRA into the 401k (had to go to local office and sign a paper and the money was in 401k later that day). The only weakness (IMHO) of Fidelity's 401k is inability to make deposits online. Per Fidelity's rep suggestion, I now use my bank's Bill Pay to send contribution checks automatically/scheduled interval to coincide with my payroll runs. This works just as well, and after a while you don't even think about it.
Thanks! Dumb question - anything weird in terms of dividend reinvestment? I assume that all works seamlessly?

Also, I read in my original post that someone had had luck with a quasi-electronic process. Quoted below - have you explored this?
Spirit Rider wrote:
Mon Apr 24, 2017 11:50 pm
You don't have to mail checks at Fidelity. You can make electronic contributions to a Fidelity SE 401k. It is a fast, but two step process. Make an electronic transfer to a Fidelity Cash Management Account in the name of the business. If the pull request from Fidelity is in by 4:00PM ET, the funds will be there the next morning. You will then have to make a phone call to transfer it to the SE 401k account. Still, you can easily have the funds available for investment in one day.

livesoft
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Re: Best Solo 401k option?

Post by livesoft » Sat Apr 14, 2018 7:53 pm

I think TDAmeritrade is still the best.
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Loyalnine
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Re: Best Solo 401k option?

Post by Loyalnine » Sat Apr 14, 2018 8:00 pm

livesoft wrote:
Sat Apr 14, 2018 7:53 pm
I think TDAmeritrade is still the best.
Oh? What do you like about it?

livesoft
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Re: Best Solo 401k option?

Post by livesoft » Sat Apr 14, 2018 8:03 pm

1. Local office.
2. Free ETF trades
3. Accepted my rollover
4. Roth option (I am not using it)
5. Loan option (I am not using it)
6. Excellent web site
7. Convenience for me since I have many other accounts with TDAmeritrade

I don't think WCI info on solo 401(k)s is up to date.
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Loyalnine
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Re: Best Solo 401k option?

Post by Loyalnine » Sat Apr 14, 2018 8:08 pm

livesoft wrote:
Sat Apr 14, 2018 8:03 pm
1. Local office.
2. Free ETF trades
3. Accepted my rollover
4. Roth option (I am not using it)
5. Loan option (I am not using it)
6. Excellent web site
7. Convenience for me since I have many other accounts with TDAmeritrade

I don't think WCI info on solo 401(k)s is up to date.
How do you make your contributions?

livesoft
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Re: Best Solo 401k option?

Post by livesoft » Sat Apr 14, 2018 8:11 pm

I go out to lunch and step into the local TDAmeritrade office and hand them a check. I have nice chat with the person I know there. I don't even know if there are other ways to make a contribution, but there probably are.
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PhillyBird
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Re: Best Solo 401k option?

Post by PhillyBird » Sat Apr 14, 2018 8:15 pm

Loyalnine wrote:
Sat Apr 14, 2018 7:53 pm
PhillyBird wrote:
Sat Apr 14, 2018 7:43 pm
I've been using Fidelity solo 401k for several years. I like it. Their index funds are as cheap as Vanguard's, but spit off more capital gains than Vanguard's (which I don't see as an issue since it's a tax deferred account). They allowed me to move pre-existing SEP-IRA into the 401k (had to go to local office and sign a paper and the money was in 401k later that day). The only weakness (IMHO) of Fidelity's 401k is inability to make deposits online. Per Fidelity's rep suggestion, I now use my bank's Bill Pay to send contribution checks automatically/scheduled interval to coincide with my payroll runs. This works just as well, and after a while you don't even think about it.
Thanks! Dumb question - anything weird in terms of dividend reinvestment? I assume that all works seamlessly?

Also, I read in my original post that someone had had luck with a quasi-electronic process. Quoted below - have you explored this?
Spirit Rider wrote:
Mon Apr 24, 2017 11:50 pm
You don't have to mail checks at Fidelity. You can make electronic contributions to a Fidelity SE 401k. It is a fast, but two step process. Make an electronic transfer to a Fidelity Cash Management Account in the name of the business. If the pull request from Fidelity is in by 4:00PM ET, the funds will be there the next morning. You will then have to make a phone call to transfer it to the SE 401k account. Still, you can easily have the funds available for investment in one day.
Dividend reinvestment is easy. Set it once to reinvest automatically and no further action required. And I did not explore the two-step process - don't have a Cash Mgmt account so it wouldn't be an option for me.

Loyalnine
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Re: Best Solo 401k option?

Post by Loyalnine » Sat Apr 14, 2018 9:03 pm

PhillyBird wrote:
Sat Apr 14, 2018 8:15 pm
And I did not explore the two-step process - don't have a Cash Mgmt account so it wouldn't be an option for me.
Is there a downside to creating a Cash Management account that you know of? Seriously pursuing this, so just trying to understand all my options.

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LadyGeek
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Re: Best Solo 401k option?

Post by LadyGeek » Sat Apr 14, 2018 9:07 pm

This thread is now in the Personal Finance (Not Investing) forum (Solo 401(k))
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GeraniumLover
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Re: Best Solo 401k option?

Post by GeraniumLover » Sat Apr 14, 2018 9:10 pm

I have a Fidelity solo 401(k) and it drives me crazy that I need to call them to make contributions rather than being able to transfer cash online from my sole proprietorship or brokerage accounts.

Loyalnine
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Re: Best Solo 401k option?

Post by Loyalnine » Sat Apr 14, 2018 9:29 pm

GeraniumLover wrote:
Sat Apr 14, 2018 9:10 pm
I have a Fidelity solo 401(k) and it drives me crazy that I need to call them to make contributions rather than being able to transfer cash online from my sole proprietorship or brokerage accounts.
Have you explored setting up the cash management account to allow for electronic transfers? Sounds like you still have to do phone, but at least you don't have to mail checks. If so, how hard/painful/expensive is it?

MJW
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Re: Best Solo 401k option?

Post by MJW » Sat Apr 14, 2018 11:57 pm

livesoft wrote:
Sat Apr 14, 2018 8:11 pm
I go out to lunch and step into the local TDAmeritrade office and hand them a check. I have nice chat with the person I know there. I don't even know if there are other ways to make a contribution, but there probably are.
This sounds very convenient. I had not considered them but after seeing your post above I found that they have an office nearby. I'm assuming setup and rollover are likely to go more smoothly by walking in and talking to someone?

txranger
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Re: Best Solo 401k option?

Post by txranger » Sun Apr 15, 2018 9:31 am

I been using fidelity — not bad. Call them once a year and deposit lump sum for max contribution and done w it.

livesoft
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Re: Best Solo 401k option?

Post by livesoft » Sun Apr 15, 2018 10:20 am

MJW wrote:
Sat Apr 14, 2018 11:57 pm
This sounds very convenient. I had not considered them but after seeing your post above I found that they have an office nearby. I'm assuming setup and rollover are likely to go more smoothly by walking in and talking to someone?
It will depend on the staff in the local office. In reality, they have a solo 401(k) expert based in corporate HQ who can answer all your questions. The locals will probably refer you to that person, but they can get them on speaker phone. Certainly my rollover was done in a few minutes with a phone call.
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ruralavalon
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Re: Best Solo 401k option?

Post by ruralavalon » Sun Apr 15, 2018 12:05 pm

Loyalnine wrote:
Sat Apr 14, 2018 7:40 pm
ruralavalon wrote:
Sat Apr 14, 2018 7:23 pm
I suggest Fidelity rather than Schwab for the solo 401k.

Fidelity has a total international stock index fund, Schwab does not have a total international stock index fund.

The differences in expense ratios between Fidelity and Schwab are tiny, and meaningless.
Thanks - do you have direct experience with either? Good watchout on the International - I suppose I could adjust by just going 100% domestic equity and use the rest of my portfolio to get international.

My first priority is quality investment option(s)/low expense ratios, but I'm also interested in contribution method/ease of use.
I didn't comment on contribution method/ease of use because I have no experience with Fidelity, Schwab, or E*Trade.
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brother7
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Re: Best Solo 401k option?

Post by brother7 » Sun Apr 15, 2018 12:27 pm

Someone already did the research on Solo 401k plans. (click here)

As much as it pains me to say it, Etrade sounds like the winner in terms of flexibility.
  • Roth option? Yes!
  • Loan option? Yes!
  • Rollover option? Yes!
Sifting through their no-load no-transaction fee (NTF) funds, I was surprised to discover a wide selection of Schwab funds.
To build your desired portfolio, use:
  • Schwab Total Stock Market Index (SWTSX)
  • Schwab International Index Fund (SWISX)

numberman
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Re: Best Solo 401k option?

Post by numberman » Sun Apr 15, 2018 2:21 pm

livesoft wrote:
Sat Apr 14, 2018 8:11 pm
I go out to lunch and step into the local TDAmeritrade office and hand them a check. I have nice chat with the person I know there. I don't even know if there are other ways to make a contribution, but there probably are.
You can also make electronic contributions at TDA. ACH transfer to a taxable account, and then do an internal transfer from a taxable account to the solo 401k (after the cash has settled).
brother7 wrote:
Sun Apr 15, 2018 12:27 pm
Someone already did the research on Solo 401k plans. (click here)

As much as it pains me to say it, Etrade sounds like the winner in terms of flexibility.
  • Roth option? Yes!
  • Loan option? Yes!
  • Rollover option? Yes!
Sifting through their no-load no-transaction fee (NTF) funds, I was surprised to discover a wide selection of Schwab funds.
To build your desired portfolio, use:
  • Schwab Total Stock Market Index (SWTSX)
  • Schwab International Index Fund (SWISX)
Their commission-free ETF list also has iShares' ITOT (Total domestic) and IXUS (MSCI Total Interntional). I wonder how long these options have been there? It's certainly news to me that you're not locked in to the weird NOSIX/POMIX etc options there.

Loyalnine
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Re: Best Solo 401k option?

Post by Loyalnine » Mon Apr 16, 2018 5:48 am

numberman wrote:
Sun Apr 15, 2018 2:21 pm
livesoft wrote:
Sat Apr 14, 2018 8:11 pm
I go out to lunch and step into the local TDAmeritrade office and hand them a check. I have nice chat with the person I know there. I don't even know if there are other ways to make a contribution, but there probably are.
You can also make electronic contributions at TDA. ACH transfer to a taxable account, and then do an internal transfer from a taxable account to the solo 401k (after the cash has settled).
brother7 wrote:
Sun Apr 15, 2018 12:27 pm
Someone already did the research on Solo 401k plans. (click here)

As much as it pains me to say it, Etrade sounds like the winner in terms of flexibility.
  • Roth option? Yes!
  • Loan option? Yes!
  • Rollover option? Yes!
Sifting through their no-load no-transaction fee (NTF) funds, I was surprised to discover a wide selection of Schwab funds.
To build your desired portfolio, use:
  • Schwab Total Stock Market Index (SWTSX)
  • Schwab International Index Fund (SWISX)
Their commission-free ETF list also has iShares' ITOT (Total domestic) and IXUS (MSCI Total Interntional). I wonder how long these options have been there? It's certainly news to me that you're not locked in to the weird NOSIX/POMIX etc options there.
I thought I read something about weird about ITOT not allowing automatic dividend reinvestments

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