Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

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yankees60
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

terran wrote: Wed Apr 17, 2024 8:32 pm Unfortunate seeing one of the big brokerages dropping their solo 401(k), hopefully the others don't start to do the same. Vanguard was my backup if the Morgan Stanley starts messing with my E*Trade solo 401(k). On the other hand, it's good to see that Schwab has added a Roth option. Does anyone know if Schwab offers in plan traditional to Roth conversions (E*Trade does).
bsteiner wrote: Wed Apr 17, 2024 2:21 pm Someone just set up an individual 401(k) plan at Vanguard but didn't yet put any money into it. To avoid the new fees, how would she close the Vanguard plan (and set one up at Fidelity)? Or can she just ignore it and set one up at Fidelity?

If the Vanguard plan is plan 001, would the Fidelity plan be 001 (since she never used the Vanguard plan) or 002? Would it matter whether she closed the Vanguard plan or just let it sit?
She would need to amend the plan to the new custodian and close the accounts (importantly, not close the plan). Since she hasn't contributed she wouldn't need to transfer the accounts. When I moved mine from Fidelity to E*Trade I was told not to increment the plan number because I was amending the existing plan, not starting a new plan. You don't want to close and reopen because, as I understand it, there's a waiting period (2 years, maybe?) to do so.
Leesbro63 wrote: Wed Apr 17, 2024 4:26 pm Someone mentioned rolling a Solo 401(k) into an IRA. What would be any disadvantage to this, other than going forward, you'll still need a Solo 401(k) for new yearly contributions?
In addition to the backdoor Roth issues already mentioned, unless the plan allowed in service withdrawals (I don't think any of the off the shelf providers do), you'd need to close the plan to roll over to an IRA. My understanding is that there's a waiting period to open a new solo 401(k) (2 years, maybe?) after closing one.
sailaway wrote: Wed Apr 17, 2024 5:04 pm
Leesbro63 wrote: Wed Apr 17, 2024 4:26 pm Someone mentioned rolling a Solo 401(k) into an IRA. What would be any disadvantage to this, other than going forward, you'll still need a Solo 401(k) for new yearly contributions?
Loss of ERISA and complicating backdoor Roth: the same issues whenever you rollover from a 401k to IRA.
My understanding is that solo 401(k)s don't have ERISA protection.
Is it true that there is a waiting. After closing The plan?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

Kirby2000 wrote: Thu Apr 18, 2024 8:35 am Our minicorp moved from Fidelity to Vanguard/Ascensus for our 401k plan 15-ish years ago, and we are very happy with Ascensus. We have access to a broad lineup of Vanguard funds and ETFs at the usual (low) ERs; depending on how plan administration is set up, there may be access to non-Vanguard funds and ETFs, as well. There is a quarterly recordkeeping fee for us ($25?), but our company picks up the tab for that, probably tax-deductible as a business expense, if I had to guess. I wouldn't be thrilled to have to pay it myself, but if I got a tax deduction on it and the plan gave me good fund options, I could deal. Way cheaper than paying the ER on our old Fidelity managed 401k, for sure. And they seem pretty good as recordkeepers; as a small business or solo consultant, that is one more thing you don't want to have to deal with. The Ascensus website is....well, OK. Not as good as Fido, but fit for purpose: change investments, report on holdings, etc. We cannot download into Quicken, but we don't hold a laundry list of funds in our 401k, so I just make a manual entry twice a year; takes about five minutes a year total. I've given up expecting good banking websites nowadays.

Bonus note: Ascensus has very knowledgeable customer service available by phone, who had no problem answering our plan questions, pointing us to forms, helping us, etc.

Now that being said, I don't know how their solo 401k, etc. operation is going to work, plan options, fees, etc., or how it compares with Fido, Schwab, etc., so due diligence is certainly in order. I'll be interested in hearing about nuts and bolts comparisons, once we get some more info.

TL;DR - Very happy with Ascensus, but there may be other good options. YMMV
Do they offer weekend customer service like fidelity does and unlike vanguard which does not ?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

toddthebod wrote: Thu Apr 18, 2024 8:45 am
bsteiner wrote: Wed Apr 17, 2024 2:21 pm Someone just set up an individual 401(k) plan at Vanguard but didn't yet put any money into it. To avoid the new fees, how would she close the Vanguard plan (and set one up at Fidelity)? Or can she just ignore it and set one up at Fidelity?

If the Vanguard plan is plan 001, would the Fidelity plan be 001 (since she never used the Vanguard plan) or 002? Would it matter whether she closed the Vanguard plan or just let it sit?
She does not want to just close the Vanguard plan, as that will trigger the successor plan rule (a 12 month prohibition on adopting a new plan) as well as a Form 5500 filing requirement.

The correct process is to file an adoption agreement with the new custodian, using the same plan name, sequence number (001), and effective date of the original plan, and designating the plan as an amendment of an existing plan. She can then notify Vanguard that she has amended the plan to a new custodian and they can close the accounts. The adoption agreements at the major brokers are all very straightforward as to how this is done, essentially amounting to not much more than checking the appropriate box.
So there is such a rule Which would meanS if 1 closed 1's plan today 1 would be unable to open up a new plan Somewhere else To make any contributions for 2024?

I assume that if 1Allows 1's plan to be Transferred to aScensus Then all you described above Will will AUTOmatically take place between both vanguard and ascensus?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

jg21 wrote: Thu Apr 18, 2024 12:40 pm I use Carry's Solo 401k. I'm able to do roth and mega backdoor roth in the click of buttons so personally found it easier to use that Schwab or My Solo 401k.

They also help with personalized and quick support with any questions, site looks clean, and they have a ton of workshops and courses in their App including office hours to ask direct financial and tax questions.
What is their website. Thanks!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

HomeStretch wrote: Thu Apr 18, 2024 2:35 pm Option 2 (rollover to IRA) would not necessarily require a plan termination for anyone age 59-1/2+ as Vanguard’s plan allows in-service distributions at age 59-1/2+.
Thank you for that as a Prior post to yours CauseD me some concern. You just put those concerns to rest.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

Redlee wrote: Thu Apr 18, 2024 5:34 pm So I have a solo 401k and just received an email from my relationship manager at Vanguard:

"You will be receiving a notification regarding an update to how Vanguard will be engaging with a suite of small business retirement plans.

As we’ve evaluated the small-business retirement plan services Vanguard provides, we recognized that the needs of many small-business owners have evolved. After thoughtful consideration, Vanguard has reached an agreement to transition SIMPLE IRA, multi-participant SEP-IRA, and Individual 401(k) products to Ascensus, a leading provider of tax-advantaged savings and retirement account solutions.

I wanted to connect with you to discuss the important update and your impacted accounts. Would you please take a moment to schedule a time that’s convenient for you to speak?"

-----

I never heard of Ascensus before. Also, before going with Vanguard I'd started setting up a solo 401k at Fidelity. They were easy to work with, as always. But they had NO Roth option, so that was a deal-killer for me. That is why I went with Vanguard. Vanguard has a Roth option for Employee side contributions, but not Employer side.

My dream provider would provide the following:
- Easy to work with
- NO FEES.
- Full range of low-cost ETFs or index funds (like VTO and VOO).
- Roth option for BOTH Employee and Employer sides (or at least for the Employee side).
What amounts of assets does 1 have to have with vanguard to have a relationship manager?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Transfer Individual / solo 401k transfer from Vanguard Ascensus

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Conlina wrote: Sun Apr 21, 2024 1:07 pm
HomeStretch wrote: Sun Apr 21, 2024 4:26 am
Conlina wrote: Sat Apr 20, 2024 11:03 pm .. Vanguard walked me through setting it up. I hope Fidelity can walk me through it. I had a lot of Admiral shares and the amount that gives a little extra phone support, which I won’t have at fidelity.

Are you switching from Vanguard?
Fidelity is an excellent i401k provider if you don’t need a plan that has Roth features.

The 800# rep from their retirement dept. was helpful when I initially set up my plan there. Later I amended my plan from Fidelity to E*TRADE as E*TRADE’s plan offers Roth and in-plan Roth rollovers which I am using.
Thanks! I didn’t even know you could roll solo 401k into a Roth!? I’ve also never needed to do a back door so I’m not entirely sure. It seems some folks are using either E*trade or Schwab for Roth options.


I’m unclear why folks want to pay taxes while working. I contribute to a Roth but want to mitigate taxes as much as possible while I have an income (two actually, solo 401k id side hustle, on top of FT work, that incidentally has a 403b so I’m doing both). Since my main gig acct allows Roth contribution, I will just do that if I want more in a Roth and can afford the taxes.
Among the many advantages of doing Roth contributions over Traditional contributions Is that You do not have to do the required minimum distributions On Roth account balances. This can both help reduce your Medicare premiums And Reduce how much of your social security is subject to taxation.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Transfer Individual / solo 401k transfer from Vanguard Ascensus

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Bonenorth wrote: Sun Apr 21, 2024 9:23 pm
HomeStretch wrote: Sun Apr 21, 2024 1:38 pm
Conlina wrote: Sun Apr 21, 2024 1:07 pm … I didn’t even know you could roll solo 401k into a Roth!? …
E*TRADE is the only free Solo 401k plan which allows in-plan Roth rollovers (i.e. converting traditional I401k to Roth I401k). This was useful to me to do Roth conversions <age 59-1/2. At age 59-1/2+, most of the free plans allow in-service distributions so a participant can do an in-service distribution from traditional i401k to a Roth IRA.
… I’m unclear why folks want to pay taxes while working. …
It’s possible someone has a low income year (lay off, sabbatical, etc.) where it makes sense to do a Roth conversion. Or someone retires but is doing a bit of consulting where a Roth conversion or Roth i401k contribution makes sense.

It may make sense to make Roth contributions or do Roth conversions if the marginal tax rate for such < the projected marginal tax rate at distribution in retirement. And vice versa.

If you haven’t read it already, the BH wiki “Traditional v Roth” may be helpful:
https://www.bogleheads.org/wiki/Traditional_versus_Roth
I have not contributed to my 401k in 2023 because of layoffs. It would be dumb for me to do a ROTH conversion and pay a bynch of taxes when I don't know where the next job is coming from. That is why for me ROTH is not a good idea. Besides, once I am 60, if the job market is crappy, I can start taking distribution from 401k , if not jobs for geezers like me "appear". Walmart greeter not an option, since the "Brooklynite" in me would come out. :happy :happy :happy
!!!!!!!!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

valgen630 wrote: Mon Apr 22, 2024 11:00 am I called and confirmed the fees for the transition from Vanguard to Ascension. They are $20/fund and $20/participant. The link confirming this information is https://www.ascensus.com/solutions/reti ... ividual-k/
Does anyone know if these fees are charged once a year or charged monthly?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

dgfrick wrote: Mon Apr 22, 2024 2:44 pm Can Vanguard roll an individual Roth 401k into a Roth IRA (no traditional contributions) in-kind or do they sell assets and mail a check which I have to cash and mail them another check to redeposit into Roth IRA?
It's all a simple transfer done internally.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

hapP2Bhere wrote: Mon Apr 22, 2024 3:56 pm
toddthebod wrote: Mon Apr 22, 2024 3:53 pm
hapP2Bhere wrote: Mon Apr 22, 2024 3:50 pm
hapP2Bhere wrote: Mon Apr 22, 2024 1:11 pm Longtime lurker, first time poster. Really appreciate the wisdom of the BH hive mind.

I am another one of the solo 401k VG refugees post-Ascensus deal as I am not happy with the fees. I have both a traditional and Roth account in the i401k at Vanguard. Going forward, I do not plan to contribute to the traditional any more but would like to continue contributing to the Roth in the i401k. Can I roll the pre-tax/traditional account only into an IRA at Vanguard, without rolling over the Roth account? Or do I have to roll the whole i401k at once?

Ideally, I would transfer the i401k to Schwab (with funds only in the Roth account), and continue contributing only to the Roth side.

Thanks in advance.
In case anyone else is interested, I just got off the phone with VG and the answer to my question is that I can (and did) do a direct rollover of the traditional i401k to an IRA, while not rolling over the Roth account.
I suspect you were not actually allowed to do that per your plan document, and your plan administrator should have stopped you. Vanguard doesn't care if your plan is out of compliance.
Thanks for mentioning that. I will investigate further.
Reading this late and hopefully I will be seeing More on this In the subsequent posts.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

gdasa wrote: Tue Apr 23, 2024 8:14 am
tranceFusion wrote: Tue Apr 23, 2024 8:05 am Is it possible to rollover my solo 401k to a SEP IRA, or maybe rollover to traditional IRA and then open a new SEP IRA plan?

I see from this thread that if I close the solo 401k plan that I can't re-open for a year, but would that restrict me from opening a SEP IRA?

I can live with the account type differences, and it seems like SEP IRA is a more popular account type so I'd probably get better support and custodian options.
It looks like that this post has the answers for your questions: https://benefitslink.com/boards/topic/6 ... om-s-corp/

Thanks!

The side light part for me Was that About 15 years ago I dealt with Larry Starr The person who gave the answer And his answer sounded just like his personality back then!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

DrivingFun wrote: Tue Apr 23, 2024 8:39 am My wife has a Solo401k with Vanguard, both Traditional and Roth options, the same single fund in both. Is there a definitive answer on whether Roth and Traditional are considered separate "accounts"? If I understand correctly the fees would either be $40 or $80. At vanguard, both are the same "plan", with the same "plan id".
Hope to see that this is answered somewhere along the way as I go through all these past posts.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

Leesbro63 wrote: Tue Apr 23, 2024 9:46 am
RickBoglehead wrote: Tue Apr 23, 2024 8:28 am
toddthebod wrote: Tue Apr 23, 2024 8:22 am

They have to file it themselves. It is too simple to want to pay someone to do it.
Correct. I just did this last week. I needed answers to some questions it asked, but the booklet I got when I opened my account had those answers.
"They" will end up being me. I do "their" tax returns. Is there an online example? I'm pretty good with this stuff but not a tax professional. Do you think I can do this?
If you can handle tax returns you can handle this. Much easier than doing tax returns.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard transitioning SEP to Ascensus. Question.

Post by yankees60 »

thedaybeforetoday wrote: Tue Apr 23, 2024 12:15 pm [Merged into existing discussion - moderator oldcomputerguy]

I have had a SEP over several decades with Vanguard. I recently received a notice that Vanguard is involuntarily (on my part) moving my SEP to a third party named Ascensus.

Per the notice (2 page PDF: https://personal1.vanguard.com/pdf/sepp ... T053181719), there will of course be new fees/charges that I currently don't pay to maintain the account.

Question:

If I no longer contribute to this SEP and I don't currently withdraw any funds from this SEP (not sure if either is pertinent to the question), can I roll this SEP over to my traditional IRA without any tax consequences and minimal hassle?

I plan to call Vanguard to ask as well, but getting through here is often quicker :D

TIA for the responses.
The bogleheads vanguard's customer service!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Transfer Individual / solo 401k transfer from Vanguard Ascensus

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HomeStretch wrote: Wed Apr 24, 2024 8:04 am
hunnypuppy wrote: Wed Apr 24, 2024 7:26 am … Currently Vanguard is the TPA. If I move to Schwab, ETrade or Fidelity - will they be my TPA? If not can I be my own plan administrator and it so what do I need to do to be it own administrator ?

Right now with Vanguard my responsibility is to file the 5500EZ. With the above what else would I need to do?
If you have the free/low-fee prototype plan provided by Vanguard, you are the TPA not Vanguard. Vanguard is the plan provider and asset custodian. This is also the arrangement for the free prototype plans offered by Schwab, E*TRADE, Fidelity. You as the TPA are responsible for plan adoption/restatements, Form 5500-EZ, calculating and depositing contributions. Vanguard (and the other providers) handle any Form 1099-R.

There are few Solo 401k plan providers that act as a TPA. You usually pay a plan set-up fee and annual fee for the services.
Are you saying that if you have this plan from vanguard that they do not do the necessary Plan restatements? That you start with a plan that wasn't compliance but you can somewhere along the line end up with a plan that is not in compliance?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Transfer Individual / solo 401k transfer from Vanguard Ascensus

Post by HomeStretch »

yankees60 wrote: Mon Jul 08, 2024 7:14 pm
HomeStretch wrote: Wed Apr 24, 2024 8:04 am
hunnypuppy wrote: Wed Apr 24, 2024 7:26 am … Currently Vanguard is the TPA. If I move to Schwab, ETrade or Fidelity - will they be my TPA? If not can I be my own plan administrator and it so what do I need to do to be it own administrator ?

Right now with Vanguard my responsibility is to file the 5500EZ. With the above what else would I need to do?
If you have the free/low-fee prototype plan provided by Vanguard, you are the plan administrator, not Vanguard. Vanguard is the plan provider and asset custodian. This is also the arrangement for the free prototype plans offered by Schwab, E*TRADE, Fidelity. You as the plan administrator are responsible for plan adoption/restatements, Form 5500-EZ, calculating and depositing contributions. Vanguard (and the other providers) handle any Form 1099-R.

There are few Solo 401k plan providers that act as a TPA. You usually pay a plan set-up fee and annual fee for the services.
Are you saying that if you have this plan from vanguard that they do not do the necessary Plan restatements? That you start with a plan that wasn't compliance but you can somewhere along the line end up with a plan that is not in compliance?
No. My point was that the poster is the plan administrator and Vanguard is not the third-party administrator (TPA) of the free pre-approved plan. An individual/plan sponsor has to pay a fee to a plan provider who offers TPA services.

The free plan providers like Vanguard, Fidelity, etc. provide the initial adoption agreement and any restatements, which they have pre-approved by the IRS. It’s up to the individual as the plan administrator to execute the adoption of the agreement.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by southerndoc »

Austinite5 wrote: Mon Jul 08, 2024 2:25 pm If I let Vanguard transfer my Solo 401 K to Ascensus and then later decide that I don't like Ascensus is there anything to prevent me from then doing a tax free transfer (or rollover) of my solo 401 K balances to another Solo 401 K Plan (like Schwab or E-Trade) that accepts such transfers (at at any time in the future)? If not, then there doesn't really seem to be "much risk" in letting Vanguard proceed with the transfer (except perhaps for a nominal transfer fee at some future date)? If there is any other reason to consider "opting out" of the transfer before the July 12 deadline please let me know. Thanks.
You can transfer anytime. Ascensus may charge you an account closure fee. If you want the cookie cutter prototype plans, you could wait until Fidelity offers a Roth component in 2025/2026 and transfer then.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Leesbro63 »

yankees60 wrote: Mon Jul 08, 2024 7:06 pm
Leesbro63 wrote: Tue Apr 23, 2024 9:46 am
RickBoglehead wrote: Tue Apr 23, 2024 8:28 am
toddthebod wrote: Tue Apr 23, 2024 8:22 am

They have to file it themselves. It is too simple to want to pay someone to do it.
Correct. I just did this last week. I needed answers to some questions it asked, but the booklet I got when I opened my account had those answers.
"They" will end up being me. I do "their" tax returns. Is there an online example? I'm pretty good with this stuff but not a tax professional. Do you think I can do this?
If you can handle tax returns you can handle this. Much easier than doing tax returns.
Thanks for the reply and encouragement. Yes, I did this form a while ago and I think I got it right. I encourage others that this can be a Do It Yourself thing for you too.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by dingus_khan »

A note for those moving to Fidelity: when you fill out the transfer paperwork and select "transfer entire account", consider listing the funds anyway to make sure they all get transferred. I didn't, and they only transferred the funds listed on the months-old 401k statement (the most recent possible, since Vanguard only provides them quarterly). I had to submit the same paperwork again to get the rest transferred, which will hopefully complete by the 12th.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by msterrr »

GoldenBear17 wrote: Mon Jul 08, 2024 4:19 pmI'm in a similar position. I've been debating between a couple other options for where to move my Solo 401(k) and need some information that I just can't get yet to decide. So I'm running out of time. (Even if we do have until July 12 to opt out, if we opt out without a way to get all the money out of the Solo 401(k) before the transfer, which would be quite a time crunch now, I'm not sure what would happen.) So rather than make a rushed decision, I'm going to let my plan transfer over to Ascensus. I see no reason we couldn't transfer again later. Like you say the only real issue is fees. But like I said in an earlier post in this thread, I talked to Ascensus and what they told me was that the $20 participant and per fund fees will first be charged in November and the nominal transfer fee for moving your assets away from Ascensus won't kick in until January. I take this to mean we have until November to move our plan again and have no fees at all. And some brokers will reimburse a transfer fee even if you do wait long enough to end up getting hit with that one.
This is also my situation. The Ascensus plan offers too limited of a fund selection for it to be a permanent home for my solo 401(k). But it'll do for 2-3 years. There's a reasonable chance that government policy and / or financial service company product changes in the next 2-3 years will materially impact both the optimal way to structure these accounts and the optimal provider to hold them with.

Honestly, my primary concern about opting out of an Ascensus transfer is Vanguard's small business backend / small business support being hot flaming garbage. I feel like Vanguard is in transition and has more riding on this transfer to Ascensus going smoothly with the spotlight on them so I'm assuming they have a large number of employees dedicated to both making sure there aren't common issues that impact large numbers of plan administrators or more exotic issues that impact small numbers of plan administrators. I expect transfers to Ascensus to be handled as expected and in compliance.

Having had extensive issues with Vanguard customer service catastrophically failing to handle requests properly in the past I absolutely do not trust them to handle individual transfer requests either as they are requested or in ways that ensure compliance. So Ascensus it is.

TLDR: I'm excited to wake up in 2 weeks with a fresh account at Ascensus without the scar tissue created by previous Vanguard backend maintenance and customer service issues. If I choose to transfer my account away from Ascensus in 2-3 years, which is likely, it's impossible to imagine the risks / headaches of doing so being larger than those a transfer away from Vanguard today would entail.
Conlina
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Conlina »

dingus_khan wrote: Tue Jul 09, 2024 9:21 am A note for those moving to Fidelity: when you fill out the transfer paperwork and select "transfer entire account", consider listing the funds anyway to make sure they all get transferred. I didn't, and they only transferred the funds listed on the months-old 401k statement (the most recent possible, since Vanguard only provides them quarterly). I had to submit the same paperwork again to get the rest transferred, which will hopefully complete by the 12th.
I'm struggling really hard trying to give my $$$ to Fidelity. Honestly, they don't seem to want it. I'm trying to open an account. I called their 800 number, got transferred twice, ended with an overseas call center who told me to "open it online".

I'm on the page for solo 401k, and there's a 10 page pdf that I have questions about yet nobody to talk to.

I'm transferring from Vanguard, which has the best customer service in the industry, so it's mind boggling to me. A knowledgeable human answers the phone 100% of the time I call Vanguard.

Did you use the same plan number for Fidelity as Vanguard? The first question on the huge application form is The plan and The Plan number. I used 001 for Vanguard. Since I'm closing that one, is Fidelity also 001?

I appreciate your feedback about listing the funds, will do that!

Did you eventually get someone on the phone to talk about the transfer? Or did you just submit that online app and hope it went through?
HomeStretch
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by HomeStretch »

Conlina wrote: Tue Jul 09, 2024 2:03 pm
… I called their 800 number, got transferred twice, ended with an overseas call center who told me to "open it online".

I'm on the page for solo 401k, and there's a 10 page pdf that I have questions about yet nobody to talk to.

I'm transferring from Vanguard, which has the best customer service in the industry, so it's mind boggling to me. A knowledgeable human answers the phone 100% of the time I call Vanguard.

Did you use the same plan number for Fidelity as Vanguard? The first question on the huge application form is The plan and The Plan number. I used 001 for Vanguard. Since I'm closing that one, is Fidelity also 001?
First time I have heard that Fidelity is using an overseas call center.

Have you asked to speak with the small business retirement plan group? The # may be listed in the online screens where you open the Solo 401k plan.

If you are amending your Solo 401k plan from Vanguard to Fidelity, yes you use the same plan #001.
Wrench
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Wrench »

Conlina wrote: Tue Jul 09, 2024 2:03 pm
dingus_khan wrote: Tue Jul 09, 2024 9:21 am A note for those moving to Fidelity: when you fill out the transfer paperwork and select "transfer entire account", consider listing the funds anyway to make sure they all get transferred. I didn't, and they only transferred the funds listed on the months-old 401k statement (the most recent possible, since Vanguard only provides them quarterly). I had to submit the same paperwork again to get the rest transferred, which will hopefully complete by the 12th.
I'm struggling really hard trying to give my $$$ to Fidelity. Honestly, they don't seem to want it. I'm trying to open an account. I called their 800 number, got transferred twice, ended with an overseas call center who told me to "open it online".

I'm on the page for solo 401k, and there's a 10 page pdf that I have questions about yet nobody to talk to.

I'm transferring from Vanguard, which has the best customer service in the industry, so it's mind boggling to me. A knowledgeable human answers the phone 100% of the time I call Vanguard.

Did you use the same plan number for Fidelity as Vanguard? The first question on the huge application form is The plan and The Plan number. I used 001 for Vanguard. Since I'm closing that one, is Fidelity also 001?

I appreciate your feedback about listing the funds, will do that!

Did you eventually get someone on the phone to talk about the transfer? Or did you just submit that online app and hope it went through?
Uh-oh, looks like we need to start a new thread, "Fidelity Customer Service Mega-thread" where everyone can argue about whether Fidelity customer service is good or bad. :D
Conlina
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Conlina »

Wrench wrote: Tue Jul 09, 2024 2:27 pm
Conlina wrote: Tue Jul 09, 2024 2:03 pm
dingus_khan wrote: Tue Jul 09, 2024 9:21 am A note for those moving to Fidelity: when you fill out the transfer paperwork and select "transfer entire account", consider listing the funds anyway to make sure they all get transferred. I didn't, and they only transferred the funds listed on the months-old 401k statement (the most recent possible, since Vanguard only provides them quarterly). I had to submit the same paperwork again to get the rest transferred, which will hopefully complete by the 12th.
I'm struggling really hard trying to give my $$$ to Fidelity. Honestly, they don't seem to want it. I'm trying to open an account. I called their 800 number, got transferred twice, ended with an overseas call center who told me to "open it online".

I'm on the page for solo 401k, and there's a 10 page pdf that I have questions about yet nobody to talk to.

I'm transferring from Vanguard, which has the best customer service in the industry, so it's mind boggling to me. A knowledgeable human answers the phone 100% of the time I call Vanguard.

Did you use the same plan number for Fidelity as Vanguard? The first question on the huge application form is The plan and The Plan number. I used 001 for Vanguard. Since I'm closing that one, is Fidelity also 001?

I appreciate your feedback about listing the funds, will do that!

Did you eventually get someone on the phone to talk about the transfer? Or did you just submit that online app and hope it went through?
-----------------
I'm just in awe of how hard this is. Alllll morning, and I'm back at the beginning. I started an app, it suddenly reloaded as I was on the last two pages. Didn't save a thing!

I do appreciate your tip, however, I haven't gotten to that point in the app. I think I'll def miss the 7/17 deadline.
dabretty
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by dabretty »

Just one more (semi) data point. I'm headed to Schwab. I filled out forms (as outlined on Schwab.com) in advance to print them, and took them in person to a Schwab office this morning. Lots of paper, but easy enough to duplicate some of the paperwork for the Roth i401k portion with just a single checkbox being the only difference. Hardest part, honestly, was trying to figure out what my full/unobscured Vanguard account numbers were on a mobile phone. Oh, besides that your spouse's signature on the application form(s) needs to be notarized.

I was pleasantly surprised, after my initial doubts of having a young employee helping me. But she was plugged in to somebody on a headset who seemed to be on the back end (or at least a bigger office) who was coaching her through exactly what was needed from me, which included a few forms not listed on Schwab's website. While the person physically helping me had not done this before, the person she was communicating with had clearly already been doing a lot of Vanguard-to-Schwab transfers. So - for what it's worth - it seems that the Schwab machinery is currently well-tuned to receive any of us.
Conlina
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Conlina »

dabretty wrote: Tue Jul 09, 2024 3:00 pm Just one more (semi) data point. I'm headed to Schwab. I filled out forms (as outlined on Schwab.com) in advance to print them, and took them in person to a Schwab office this morning. Lots of paper, but easy enough to duplicate some of the paperwork for the Roth i401k portion with just a single checkbox being the only difference. Hardest part, honestly, was trying to figure out what my full/unobscured Vanguard account numbers were on a mobile phone. Oh, besides that your spouse's signature on the application form(s) needs to be notarized.

I was pleasantly surprised, after my initial doubts of having a young employee helping me. But she was plugged in to somebody on a headset who seemed to be on the back end (or at least a bigger office) who was coaching her through exactly what was needed from me, which included a few forms not listed on Schwab's website. While the person physically helping me had not done this before, the person she was communicating with had clearly already been doing a lot of Vanguard-to-Schwab transfers. So - for what it's worth - it seems that the Schwab machinery is currently well-tuned to receive any of us.
Good to know! I've been trying for 2 hours with Fidelity. The page for the app refreshes without any email verification at all. I have no clue if the app is in the queue. I haven't even tried to transfer funds yet. I wonder if I should just go in person like you did, which we shouldn't need to!
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by southerndoc »

For non-prototype retirement accounts (like with MySolo401k), Fidelity has a dedicated number. I believe this is for all small business retirement plans.

Fidelity Retirement Group
(800)544-5373
8am-8:30pm M-F EDT

They are very helpful and they are not overseas. I spoke with them a few times when setting up my non-prototype accounts and transferring my assets from Vanguard.
knitwit
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by knitwit »

dingus_khan wrote: Tue Jul 09, 2024 9:21 am A note for those moving to Fidelity: when you fill out the transfer paperwork and select "transfer entire account", consider listing the funds anyway to make sure they all get transferred. I didn't, and they only transferred the funds listed on the months-old 401k statement (the most recent possible, since Vanguard only provides them quarterly). I had to submit the same paperwork again to get the rest transferred, which will hopefully complete by the 12th.
I second this advice as I had run into a related situation where Fidelity kept open the transfer waiting for cash from the settlement account which was on the statement but long-since had been used to purchase fund shares. Eventually, I had to call Fidelity to ask why the transfer remained open and explained the timeline and what had transpired when they mentioned VMFXX.

Also, Fidelity mentioned that we should continue watching the Vanguard account in case a dividend is deposited after the transfer. If so, we'll need to contact Fidelity to get that transferred over as well.
knitwit
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by knitwit »

Conlina wrote: Tue Jul 09, 2024 3:31 pm
dabretty wrote: Tue Jul 09, 2024 3:00 pm Just one more (semi) data point. I'm headed to Schwab. I filled out forms (as outlined on Schwab.com) in advance to print them, and took them in person to a Schwab office this morning. Lots of paper, but easy enough to duplicate some of the paperwork for the Roth i401k portion with just a single checkbox being the only difference. Hardest part, honestly, was trying to figure out what my full/unobscured Vanguard account numbers were on a mobile phone. Oh, besides that your spouse's signature on the application form(s) needs to be notarized.

I was pleasantly surprised, after my initial doubts of having a young employee helping me. But she was plugged in to somebody on a headset who seemed to be on the back end (or at least a bigger office) who was coaching her through exactly what was needed from me, which included a few forms not listed on Schwab's website. While the person physically helping me had not done this before, the person she was communicating with had clearly already been doing a lot of Vanguard-to-Schwab transfers. So - for what it's worth - it seems that the Schwab machinery is currently well-tuned to receive any of us.
Good to know! I've been trying for 2 hours with Fidelity. The page for the app refreshes without any email verification at all. I have no clue if the app is in the queue. I haven't even tried to transfer funds yet. I wonder if I should just go in person like you did, which we shouldn't need to!
Hmmm ...my experience when calling Fidelity's dedicated Retirement Group has been great. This from Fidelity's Self Employed 401(k) website to reach these specialists: "Call 800-544-5373 and say "Small Business Retirement"
Austinite5
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Austinite5 »

southerndoc wrote: Mon Jul 08, 2024 10:45 pm
Austinite5 wrote: Mon Jul 08, 2024 2:25 pm If I let Vanguard transfer my Solo 401 K to Ascensus and then later decide that I don't like Ascensus is there anything to prevent me from then doing a tax free transfer (or rollover) of my solo 401 K balances to another Solo 401 K Plan (like Schwab or E-Trade) that accepts such transfers (at at any time in the future)? If not, then there doesn't really seem to be "much risk" in letting Vanguard proceed with the transfer (except perhaps for a nominal transfer fee at some future date)? If there is any other reason to consider "opting out" of the transfer before the July 12 deadline please let me know. Thanks.
You can transfer anytime. Ascensus may charge you an account closure fee. If you want the cookie cutter prototype plans, you could wait until Fidelity offers a Roth component in 2025/2026 and transfer then.
Thanks for the feedback. I have asked my Fidelity Advisor to comment on any plans that Fidelity might have to add a Roth Component to their Solo 401 K Plan in the future. My son's Solo 401 K (I am just an Administrator) is just a few years old and not yet vary large. His investment needs are therefore not complicated - so although the Investment choices at Ascensus (and Vanguard before that) are limited, they are adequate for his needs (at least in the near to mid term). He definitely does not need a "custom" 401 K Plan (e.g. like MySolo401K) and would prefer not to use Schwab (or E-Trade) for a "standard" one (with Roth options) simply because neither of us has any other business with either (whereas we both have other accounts at both Vanguard and Fidelity). But if and when Fidelity does add a Roth Component to their Solo 401 K Plan it could make sense for him to transfer his account there (since his Roth IRA is already at Fidelity). In the meantime he can try Ascensus, and see how it works out.
dabretty
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by dabretty »

Does anybody have a general feeling as to why there is so much turmoil in the i401(k) account business? Are they just not as profitable to offer?

I started with TD Ameritrade (2018), both pre-tax and post/Roth. Then TD Ameritrade announced (2022) that they were getting rid of the Roth component, so I decided to leave with both accounts. I moved to Vanguard. And now (2024) Vanguard has decided to exit the game.

Comically, I'm currently headed back to Schwab (who acquired TD Ameritrade, where I started). Account balances are doing quite well so I'm personally okay with playing this game, but for friends just starting out it's becoming increasingly difficult for me to recommend an i401(k) to them.
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yankees60
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

SeaShelleys wrote: Wed Apr 24, 2024 11:40 pm
vnatale wrote: Wed Apr 24, 2024 9:38 pm
SC Anteater wrote: Wed Apr 24, 2024 12:36 pm I too have an employer (current) SIMPLE IRA with Vanguard. I now have some decisions to make. Right now I pay no fees to Vanguard for this due to my other Vanguard accounts. Ascensus will charge $25 plus $20 per fund. I have 4 funds in my IRA now.

I think I can move the current funds in the SIMPLE IRA to my traditional IRA, also at Vanguard. Should I do this?

I would still have a SIMPLE IRA at Ascensus if I do this since I'm currently contributing. I think it would be best to hold one fund there to minimize fees - should I just do one of Vanguard's Target Date Funds?
As soon as I was able to I rolled over all the funds from my two SIMPLE IRA's to two new Rollover IRA accounts. I like to keep my investments separate when rolling over rather than sending both of those SIMPLE IRA's to the same account.


If you don’t mind my asking, are there any advantages in keeping your investments separate when rolling over, rather than sending both of those SIMPLE IRA’s to the same account? Are there any disadvantages to sending both to the same new IRA? Also, are there disadvantages to rolling over the SIMPLE IRA to an already existing TIRA? Thanks for any insight.
Sorry for the extremely late response.

In my case the tax treatment for distributions from Each simple IRA are going to be different.1 of them was a result of being an employee and the other Was from being self employed. My state of Massachusetts Will tax all the distributions from the former But will not tax the contribution portions of the latter Since I received no state tax benefits when I made them.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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yankees60
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

White Coat Investor wrote: Thu Apr 25, 2024 1:57 pm I just got done researching this in depth for a blog post.

I see no reason for anyone with a Vanguard individual 401(k) not to now move it to a fully customized, self-directed plan except for inertia. It's about the same price as Ascensus and offers way more features than Ascensus, Schwab, Fidelity, or E-trade.
Where is that blog post? Thanks!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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yankees60
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

TwstdSista wrote: Fri Apr 26, 2024 5:07 am Found at r/FidelityInvestments: "As you know, Fidelity Self-Employed 401(k)s do not support a Roth selection in the documents. While we don't have anything to announce for future offerings, I'll forward your post to the appropriate team for feedback."

That's a bummer - they could get a lot of business if they made the switch now. I'm going to have to look closer at Schwab and E*Trade when Secure 2.0 takes effect. Bookmarking this thread for the future. (thanks to all who have so clearly delineated the ways to transfer a solo 401k account and for the information provided herein)
What could be the reasons why they have so far decided not to offer the Roth option?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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yankees60
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

FriedOkra wrote: Fri Apr 26, 2024 7:23 am I am stuck in this boat. The balance at my pre-tax Vanguard Solo 401(k)--started last year--is relatively small (about $8k) and currently invested entirely in VBTLX Vanguard Total Bond Market Index Admiral. I am 57, so I understand that a rollover to my Rollover IRA (also at Vanguard) is not an option because my business is not closing, and I am not yet 59 1/2.

I am strongly inclined to simply transfer the existing plan to Fidelity, but I am annoyed at the $75 transaction fee to liquidate the VBTLX holding down the road at Fidelity. Is there a cash position within Vanguard Solo 401(k) accounts, whereby I could sell the VBTLX, then have everything in cash when it lands at Fidelity? If so, how do I get there? I don't have transaction authority as an employee through my personal login, and the Vanguard employer login interface also does not seem to have a way to transact with assets already assigned. (All of which begs the question of how one rebalances in this type of account.)

Final rant: I so regret setting this up last year. It has been complicated and annoying, and has caused a few unintended consequences not worth going into here, all for a relatively small amount of money. Upon reaching 59 1/2, I am strongly inclined to close the plan altogether, do a rollover to my IRA, and bask in the simplicity.
You probably could both trademark and sell bumper stickers With your phrase "Bask in the simplicity" !!!!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

nun wrote: Fri Apr 26, 2024 8:39 am
nun wrote: Thu Apr 25, 2024 10:16 pm I'm the administrator of my Vanguard solo 401k. I just rolled it over to my Vanguard IRA. Who generates the 1099-R? Me or Vanguard?
Just FYI for anyone transferring a Vanguard solo 401k to a Vanguard IRA. I called them and the rep said that Vanguard generates the 1099-R. Also if the balance in the solo 401k is zero it would not transfer to Ascensus and would be closed so then I would have to file a 5500-EZ. I intend to put a small amount in a single fund in my solo 401k to keep it active and see what it's like with Ascensus.
Has anyone else confirmed all these important points above?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

Wrench wrote: Fri Apr 26, 2024 9:58 am
leeks wrote: Fri Apr 26, 2024 8:25 am
White Coat Investor wrote: Thu Apr 25, 2024 11:38 pm
CFM300 wrote: Thu Apr 25, 2024 4:22 pm
White Coat Investor wrote: Thu Apr 25, 2024 1:57 pm I see no reason for anyone with a Vanguard individual 401(k) not to now move it to a fully customized, self-directed plan except for inertia.
One reason to not move to a self-directed plan is simplicity. If I can gather all of my investment accounts at Fidelity or Schwab, that would be nice. I understand that I could choose Fidelity or Schwab as my brokerage for a self-directed plan, but unless I need specific features that can only be had in a self-directed plan, why introduce a middle man?
I'm not sure how many people there are out there who don't want a single one of a feature available in a self directed plan. Really? None of them? I guess there's probably a few folks like you.

My self directed plan was (well really still is but now it's an ERISA plan) at Fidelity. It was way better than the cookie cutter plan. For instance, I think the Fidelity one uses only Fidelity funds. I could buy Vanguard ETFs, private real estate funds and other investments not in the Fidelity plan. Plus Roth. Plus Mega Backdoor Roth. A loan if I wanted it. etc.
I'm one who would not want the self-directed plan because my self-employment income is low and my individual 401K is a small portion of our family assets. If we needed a loan or some other investment options, we could use other accounts. I have about $50K in there now, and expect to contribute $15-20K per year going forward. I'm primarily a stay-at-home parent but do some part-time freelance work. A $500+ fee is too much for a small-timer like me who doesn't need any extra features.

I think your recommendation for the self-directed plan applies mostly to high-income self-employed people.
Our balance is relatively small too - spouse and I together have ~$70K. MySolo401K.net has $125 per year after $525 set up fee. But, they set it up so you get $500 tax credit for three years because they have auto-enrollment in their plan. You don't actually have to USE auto-enrollment to get the credit as long as the plan has it. So total cost for two participant plan with three mutual funds at Ascensus is $1120 over 7 years, while at mySolo401K it is zero after three years of tax credit:
Image
It's even more advantageous for us because we have 4 mutual funds. Plus, you can use whatever brokerage or bank you want: Fidelity, Schwab, eTrade, Merrill, etc. I have not pulled the trigger yet, but I think this is the way we will go, using Fidelity as our brokerage because I have other accounts there. After 7 years, $125 per year would be ~0.03% expense ratio at our current contribution level. For the level of service and benefits, epecially 5500 form filing, that's worth it to me. YMMV.

Wrench
This is excellent information! Thanks!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

White Coat Investor wrote: Fri Apr 26, 2024 1:59 pm
CFM300 wrote: Fri Apr 26, 2024 1:08 pm
White Coat Investor wrote: Thu Apr 25, 2024 11:38 pm I'm not sure how many people there are out there who don't want a single one of a feature available in a self directed plan. Really? None of them? I guess there's probably a few folks like you.
I don't need a Roth account, all of my 401(k) is invested in a single bond fund, and I won't ever need a loan from my account.

However, you know way more about this stuff than I do, so it's possible that I'm wrong about my assumptions or that I'm otherwise not recognizing how I could benefit from a self-directed plan.
No I'm saying I agree with you. I just don't think there are very many people like you out there.
I think that I would classify myself as 1 of those people. I generally put in between 15- $25,000 a year And always to the same 1 vanguard Money Marty market account. The bulk of it went into a roth account. I an not pleased that I do have to now do something with it. However I do not believe there was ever any time when I wished this vanguard Solo 401K did more than it does.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

HomeStretch wrote: Fri Apr 26, 2024 5:49 pm
southerndoc wrote: Fri Apr 26, 2024 5:43 pm I've seen posts of people transferring from their Vanguard i401k to an IRA. Can you do that and still maintain the plan? I thought you could only do that with plan termination.
Yes, if you are age 59-1/2 the plan allows in-service distributions.
Thank you for that information.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

GoldenBear17 wrote: Fri Apr 26, 2024 5:50 pm
HomeStretch wrote: Fri Apr 26, 2024 4:45 pm
GoldenBear17 wrote: Fri Apr 26, 2024 4:31 pm
HomeStretch wrote: Wed Apr 24, 2024 6:35 am
BhRgg wrote: Wed Apr 24, 2024 12:30 am … Schwab seems only no fee option with Roth & ETF other than etrade(exasperating runaround trying to switch to them years ago). How is Schwab transfer process? Looks like they require adoption agreement to be notarized, which is tolerable as long as everything else goes smoothly.
While Schwab would be my personal choice over E*TRADE, opening an E*TRADE one-participant Solo 401k was easy for me in Dec. 2023 (as compared to opening an E*TRADE Solo 401k in 2017-ish). I downloaded, completed and uploaded the plan adoptions/participant account (no transfer-in). E*TRADE had the participant accounts opened the next day.
HomeStretch,

You're the only person I've come into contact with directly that has an E*TRADE Solo 401(k). I'm really curious if it will serve my needs. So it would be really helpful to hear your experience. I might prefer Schwab too except for the fact that switching to them would require me to switch all my investments in my Solo 401(k) to Schwab funds to avoid paying something like $75 to trade in my Vanguard funds which I'd prefer to keep. So that leaves me with E*TRADE. They seem to have no fees at all for the Solo 401(k), have Roth, and no fees for trading my Vanguard funds within the Solo 401(k).

The thing I keep hearing that really concerns me with E*TRADE is what I mentioned in a post just above this: that apparently they don't let you specify Employer vs. Employee contributions? Is that true? And if so, how does that work? It seems ridiculous to me for something that fundamental and important not to be specified. What if the IRS wants to know whether you contributed above the limit to one of those? If E*TRADE doesn't even ask whether a contribution is for one or the other, how would that even be known? Am I misunderstanding something?

Anything else I should worry about with E*TRADE? You also said in another post that E*TRADE reps were eliminated? You just mean there are fewer of them than before?

I wish there was somewhere to see screenshots of the E*TRADE Solo 401(k) interface, how contributions look when you make them and so on.
E*TRADE doesn’t breakout employer and employee contributions. This is really not an issue as you as the plan administrator are responsible for tracking and reporting. But I do like that, for example, Fidelity will record employer and employee contributions separate in the statements.

If you contribute after 1/31 for the prior year, E*TRADE’s system designates it as a current year contribution and you have to call or message them to have the plan year corrected.

Yes, it’s easier and cheaper to transfer and use Vanguard mutual funds at E*TRADE. But Fidelity and Schwab have their own good diversified mutual funds too.

The E*TRADE personal reps were eliminated. There are still 800# reps and secure messaging.

I had issues with their slow processing of rollovers and issues with their tax reporting.
When you say I as the plan administrator am responsible for tracking and reporting, what reporting? Until I have to do a 5500 form, there is no reporting is there?

Vanguard has you specify each contribution as Employer or Employee and tracks that. According to you Fidelity does too. I can't imagine anyone else doesn't and am truly surprised E*TRADE wouldn't. By not actually formally specifying whether a contribution is Employer or Employee, that theoretically means that you could mess that up, over-contribute to one, and then later rearrange the numbers to claim something was one when originally you really meant it to be another. Just odd to me.

Really? Not even after the tax deadline but after January 31 they mark a contribution as being for the current year? How strange. If anything, I would think most contributions coming in February would be for the previous year, not the current year.

I'm using Target Date Funds and leaving some in the Money Market Fund until moving into the TDF. Fidelity is out for me since I need a Roth portion. Schwab's Target Date Fund is ok I guess, but really somewhat different. It has way more funds inside it than the simpler Vanguard TDF. I guess it wouldn't be the end of the world if I had to switch to it. But I'd rather not, especially since I have other accounts invested in the same Vanguard TDF so it's nice how it keeps my allocation exactly the same. Also Schwab's MMF makes a bit less than Vanguard's. Not a huge amount I'm sure. But just another little ding against it.

Oh I see, E*TRADE still has reps, just not the personal ones. Would you have gotten a personal rep anyway unless you had quite a bit invested with them?

It's not only worrisome that E*TRADE has these issues, but that they're such odd issues. I can't wrap my head around why they'd set things up this way with some of these issues.

I tend to think that with a Solo 401(k), it's not important that everything be perfect. You make a contribution once or twice a year in my position and move on. So not that big a deal if it takes a little extra work or have to call them once a year to sort something out. But when the policies seem so guaranteed to be frustrating, it makes me wonder about the whole thing. Imagine having a Solo 401(k) and having every person who contributes in February for the previous year have to go through this hassle rather than set it up so you can specify which year it's for.
I believe that I just recently read In an IRS publication That if you make a contribution which could be for that year or the prior 1....... if you do not make clear Which year it is for...... the investment company Will be assuming it is for the year in which you made the contribution.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

SilverGT wrote: Fri Apr 26, 2024 8:32 pm I received the letter from Vanguard for my Simple IRA. I'm not happy about the new fees or getting moved to a company I did not choose.

My daughter and I called Fidelity and received the following different answers.

A rep I spoke to said we could only transfer from Vanguard to Fidelity during the open enrollment period due to the plan needing to be amended.
Another rep told my daughter we could complete the transfer at anytime.
I called later and a third rep said we needed to obtain permission from Vanguard to amend the plan agreement to change from using the model agreement to a prototype agreement.

Vanguard is a DFI (designated financial institution) and uses the IRS 5305-S model forms.

Fidelity is not a DFI and uses prototype forms.

There's confusion around the requirements for doing a transfer from a model agreement (Vanguard) to a prototype agreement (Fidelity)

Has anyone else ran into this?
Thanks for the information regarding What specific model forms that vanguard has been using.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

nun wrote: Fri Apr 26, 2024 9:44 pm I think people are over reacting to this a bit. Sure it's annoying and reflects badly on Vanguard, but I don't know enough yet to get too agitated. I opened a solo 401k with Vanguard for the convenience of having everything in the same place so anywhere other than Vanguard is a pain to me. I'll probably let things transfer over to Ascensus and I'll have one fund (probably Total Stock Market) and one participant so my admin cost will be $40/year. That's fine with me. I've already rolled my solo 401k balance into my IRA so very little money will transfer to Ascensus, probably $1k that I will deposit in a week or so, and I'll see if the site works for my simple requirements. When I stop working I'll rollover to my Vanguard IRA
I agree with the annoyance factor of no longer being able to have everything in 1 place, i.e.,vanguard.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

scoothome wrote: Sun Apr 28, 2024 6:47 pm
teacher wrote: Wed Apr 24, 2024 12:15 pm I'm hoping people will share what foibles occur, if any, during the transition process to Ascensus, Schwab or Fidelity (for those who aren’t investing in Solo ROTH 401k). Reports of satisfaction or dissatisfaction after the transition would be appreciated as well.
We're not done with the transition of my wife's Individual Roth 401(k) plan from Vanguard to Schwab yet, but thought I would provide some comments on the process so far.

4/22/2024: Called Schwab and Vanguard, in that order.
The Schwab rep walked me through the application forms (see "Establish your plan on this page: https://www.schwab.com/small-business-r ... 401k-plans) and told me that Vanguard should initiate the transfer of funds (looks like Schwab can initiate, see below). Also told me to increment the plan sequence number from what was listed in the Vanguard account (which is at odds with what others have said, see below). The rep apologized that he was not permitted to advise me on the amendment or restatement date on page 4 of the adoption agreement, and said that I should contact a tax attorney.

The Vanguard rep told me that Schwab should initiate the transfer process. The Schwab adoption agreement asks for "plan sequence number". I asked the Vanguard rep to confirm my understanding that what is shown in the Vanguard registration as "Amendment version CYCLE 3" means that the plan sequence number = 3. I also asked to confirm that the plan sequence number would not change during the transition process. After checking with her supervisor, the rep confirmed that Amendment version CYCLE 3 means the plan sequence number is 3. Edit: this is an error; see later post. She also said that I should use the same number in the Schwab application. With the conflicting information, I went with Schwab's suggestion (hope that doesn't cause problems later; subsequent to my application, I've seen other posts that Fidelity also said to use the same plan sequence number as the Vanguard account).

I submitted via fax the Schwab Adoption Agreement, Trustee and Custodial Agreement, Individual 401(k) Account Application, and Roth Individual 401(k) Rollover/Transfer Data Form (which the Schwab rep told me is only for recordkeeping to establish first year of contribution and total Roth contributions, not including earnings; the form doesn't rollover or transfer any assets).

4/23/2024: Received confirmation email from Schwab that "we have successfully completed your request". No account number or login instructions were included in that email. I contacted Schwab and they told me a welcome packet would be sent via snail mail. In retrospect, I'm sure I could have asked for the account number and login instructions, but I wasn't in a hurry and waited for the snail mail.

4/26/2024: Received the Schwab welcome packet in the mail with account number, registration information, etc.

4/28/2024: Established online access to Roth Individual 401(k) account. Asked via Message Center for instructions on how to move funds from Vanguard to Schwab. First response said it could be done online. Followed the instructions but it said, "You have no eligible accounts for transfer." Sent a reply to the message. The second Schwab reply (from different rep) said "On that page where you entered the Vanguard type of account and account number and you get that error message there is a message in red at the top "You have no eligible accounts for transfer. Open a new account or print transfer form" Please use the transfer form in PDF instead and once completed please upload it to our Message Center and we can begin processing the transfer for you."

Completed the PDF form (on page 3, selected full transfer, listed the Vanguard mutual funds, selected "In Kind", reinvest future dividends and capital gains), included a recent statement from Vanguard as instructed, and uploaded it in the Message Center.

The form says "Depending on the type of securities, a typical transfer will take approximately three weeks. However, some may take up to six weeks or even longer."

So now I wait...
Hopefully,as I keep reading I will get to read the rest of the story!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

aray wrote: Tue Apr 30, 2024 2:41 pm I’ve been with MySolo401k for a couple years now and have been very satisfied and impressed with this company. When you factor in the $1,500 in tax credits they’ll help you get over a three year span, you can essentially get a seven year free trial of MySolo401k before you’ll need to decide if the $125 annual fee is worth it for you. For me, the annual fee is absolutely worth it. They diligently work to stay on top of changes in the tax and 401k laws and offer excellent educational resources and webinars. You’ll have the ability to have three subaccounts (Roth, Pre Tax, and After Tax) and will also be able to do a Mega Backdoor Roth (both MBR 401k and MBR IRA). You’ll have flexibility as far as where to set up your subaccounts (Fidelity, Schwab, and E-TRADE are compatible options). Once it’s necessary to file an annual 5500-EZ, MySolo401k will prepare and file this form on your behalf at no additional cost. Before joining MySolo401k, I tried a couple of the free solo 401k options, and my experience has been that you get what you pay for. With the free options, for example, I experienced some issues with receiving 1099-Rs with errors, and also receiving conflicting / inaccurate information when I had questions. The folks at MySolo401k are specialists in this area and I trust their guidance. As with the free providers, you’ll still be responsible for ensuring you’re following the plan document, making contributions within the annual IRS limits and in a timely manner, calculating employer contributions correctly, etc.

Here's an article from MySolo401k in light of the recent Vanguard news:
https://www.mysolo401k.net/vanguard-exi ... -holders/

And here’s a great resource on the $1,500 tax credit opportunity:
https://www.mysolo401k.net/the-self-dir ... ar-2024/
Thanks for all the excellent information that you have provided here !
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

bernoulli wrote: Wed May 01, 2024 12:43 pm
nun wrote: Wed May 01, 2024 12:27 pm
CFM300 wrote: Wed May 01, 2024 11:04 am
bernoulli wrote: Wed May 01, 2024 10:47 am roll my Vanguard solo 401k into an existing big corporate employer 401k, close my Vanguard solo 401k (file form 5500), and then open a new solo 401k with Fidelity?
My understanding is that you would have to wait a year after closing your current solo 401(k) before opening a new one.
Yes that's what I understand too. I had thought of just closing the solo 401k, rolling over so the balance is zero, filing the 5500-EZ and opening another, but I'd have to wait a year to open a new solo 401k with someone like Schwab or Fidelity.
the one-year waiting period would not be terrible if we make the 2024 contributions before closing the account - say in May 0f 2024, and then open the new solo 401K in June of 2025 and then make the 2025 contribution, am I missing anything here?
I do not think you are missing anything here as you Have worded it. However would be terrible for someone who has to wait until 2025 to determine exactly what their 2024 contribution contributions Can be.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

nun wrote: Fri May 03, 2024 6:49 pm I think it will be interesting to keep this thread going to see how the process of moving, or not, goes and how things end up. My bet is that most people will be basically happy wherever they move their solo 401k.

Right now my laziness and relative apathy after initially investigating Fidelity have made me decide to do nothing and just let my small balance VTSAX balance in my solo 401k transfer to Ascensus. So I will report on their "welcome package" and account servicing when that happens.
As you and everyone else has no doubt noticed it kept going on! Your post
represented about the halfway point to nearly 1,000 posts on this topic Which is where I am at after after spending a few days reading them!
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by White Coat Investor »

yankees60 wrote: Wed Jul 10, 2024 2:32 pm
White Coat Investor wrote: Thu Apr 25, 2024 1:57 pm I just got done researching this in depth for a blog post.

I see no reason for anyone with a Vanguard individual 401(k) not to now move it to a fully customized, self-directed plan except for inertia. It's about the same price as Ascensus and offers way more features than Ascensus, Schwab, Fidelity, or E-trade.
Where is that blog post? Thanks!
Not allowed to tell you per forum rules, but someone else can link to it.
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
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

Elysium wrote: Tue May 07, 2024 3:32 pm Anyone know the investment options with Ascensus plan?

Is this the list: Individual 401k with Vanguard

This is not so bad, since they provide admiral versions of Wellington and Global Wellington, which may be all I need to consolidate and save the trouble of rollover then open elsewhere. Yearly $20+$20 is not bad deal given my balance it will easily be made up with admiral shares which isn't available for these options today with Vanguard run solo 401k. At some point in next 5 years I will then rollover to another place, likely Fidelity, instead of keeping more money at Vanguard which is sounding less prudent every day.
If so no VUSXX.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by yankees60 »

PaddyMac wrote: Thu May 09, 2024 8:25 pm We had a 401k at Vanguard with a Roth 401k. On Monday I called to ask about rolling over to a Vanguard IRA and Roth IRA, and have to say that the steps are very very easy. The money was transferred by Weds night.

Before you start, make a note of how much money is in your 401k and your Roth 401k as you will be asked for an estimate during this process.

Now click on the Add Account button after you log in on your Dashboard. (On the next page, the link to "rollover your Vanguard 401k account" link was broken for me, but maybe it's something they are trying to set up?)

The agent told me to make 2 New accounts: A Rollover IRA and a Rollover Roth IRA. Should be obvious which options to choose, but select "Termination" as the "reason". The accounts will be opened with $0 balance. Make a note of the Account # for each.

Next, go to Forms
https://personal1.vanguard.com/ngf-next ... bapp/forms

and select the "add or remove money" option, "sell shares", and follow the steps to rollover ALL shares to your 401k to your new Rollover IRA.
If you have a Roth 401k, repeat the "remove money" form and roll ALL over to your new Rollover Roth IRA.

Note that my 401k accounts disappeared after the transition, so be sure to save all your Statements beforehand!
Thanks for this. Whenever I need to get something done like this which is fairly important I call vanguard and have the representative go through with me step by step and then at the end tell me if they see it's been successfully completed . So I will again try that when I do the same as you did on your own.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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