Solo 401k first hand experience?

44 Replies

I would like to know which companies you are utilizing for your solo 401k and why.

Thanks for the feedback.

I use My Solo 401K.

I wanted a Fidelity account so that I can move my assets seamlessly and without fees between mutual funds and my other assets. This is an amazing setup, but not everyone at Fidelity understands it. Mark Nolan at My Solo 401K was just amazing ... we breezed through paperwork.

Generally they were responsive and extremely knowledgeable. They did a huge amount of work for a flat fee of $600.

thanks so much @Katharine Chartrand for the information! That's just the feedback and firsthand experience I'm looking for. I did come across another discussion on the same topic and gathered some helpful insight. I'm down to Sense Financial & mysolo401k.

Hi Russelin,

While I have not worked with mysolo401k , I did look at them a few years ago. I looked around quite a bit before I decided on working with Dmitriy at Sense Financial Services LLC. They were very hands on and that made the setup of the bylaws documentation, checkbook opening and transferring assets to it to use, very easy. I have my checkbook for my solo401k with Wells Fargo bank.

You could probably do this very inexpensively but for me I needed to find someone I could trust to know what I was doing was correct. I loved the solo401k ability to take a loan. Anyways it was very hassle free and paper work is minimal. Bought some silver and gold in the solo401k, now looking for SFH for income. They also helped me with filing a distribution I made last year to offset some losses.

Totally recommend them, hope that helps.

Jose

@Russelin Kisiel  The fact that @Dmitriy Fomichenko  is extremely active here was just one of several reasons I chose Sense.  I found that most of the companies I asked questions of were giving me a hard sell, without much detail to their answers. Dmitry has answered everything I have asked with the same detail as he does in the forums here, and quickly. I have been extremely satisfied. 

Thank @JOSE & @Walt !

I've found the same to be true of @Dmitriy Fomichenko .

He has been very helpful and patient with my questions and I've felt his responses to many other posts I've read are always clear and helpful.

I appreciate the feed back from all of you.

I used SunWest trust to set up my solo 401K.  I did the banking end myself, and admittedly that was a pain in the a$$ - I had to go to 5 local banks before anyone understood what I was wanting to do.

This was in 2010 I think, and cost about $500 total.  

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Do you know what the fees run at mysolo401k and sense financial?

@Jeff Barnes  

  what do your charge for this service.

in the day this was a 2k to 3k cost to set up.. as everyone and their brother jumped into the field the cost went down substantially.. so when I see 500 to 600 to facilitate that is a great deal.. how bout you? what are your fee's

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@Katharine Chartrand  

How is the Fidelity Self Directed Solo 401k setup working out? Did you go through Fidelity to make some money on mutual funds instead of opening a bank account which are paying hardly any interest? I am looking to save for 2-3 years and was not sure if it would be worth going through Fidelity for such a short period of time. Any input guidance would be highly appreciated. Thanks and God Bless!

I have a fidelity solo 401K setup by mysolo401k.com.

You get checking and debit cards to invest in real estate or what ever.  With the money you leave in fidelity, you can invest in stocks and mutual funds.  I could not be more pleased. I suspect a 401K with other brokerage firms would work fine if you have a preference for e-trade or schwab. But, IMO, nothing wrong with fidelity, and I haven't liked other brokerage firms I have tried.

@Jesus R.  

@Katharine Chartrand

Thanks for your response. While researching I noticed several recent reviews on Fidelity's Self-Employed 401K plan where clients have stated having to mail paper checks monthly for their contributions and the lack of online or ACH transfer capabilities. Any thoughts? Thanks and God Bless!

@Jesus R.  

If you are looking for truly self-directed Solo 401k then Fidelity 401k is not your answer. While Fidelity offers Solo 401k plans they are restricted on the investments options and they are acting as a custodian for your account and you will have some restrictions.

What you need is a provider who offers plan set-up where you can be the trustee of the plan and there is no custodian. By being administrator of your own Solo 401k plan and the trustee of the Solo 401k Trust (which is a vehicle used for holding assets of the plan) you will have freedom to invest as you wish and will be in total control of your retirement account. This structure will place some responsibilities on you as trustee and administrator so be sure to utilize the provider who offers support and help you navigate through requirements and keep your plan in compliance.

Then after your plan is established, you can use those plan documents to open non-prototype retirement account at Fidelity, which will allow you to buy and sell stocks and also offer you the ability to have checkbook control to invest in alternative assets. As trustee you decide where you keep the funds of the trust and how they are invested. You can have account at any financial institution. Again, with truly self-directed 401k Fidelity is not where you start (they don't offer such plans), but instead they are one of the options where you can choose to keep your funds. 

@Dmitriy Fomichenko  

@Jesus R.  

Fidelity may have arrange solo 401K's for you.  I was not aware of this but, in any case, that is not what I am talking about. Fidelity does not act as a custodian for my account. 

I used mysolo401K.com (they are amazing) to setup what is really just a brokerage account owned by my solo 401K LLC. I am the custodian. I have all the cash management functionality of a Fidelity brokerage account. It's really not bad since you get a debit card and checking but I do not in fact see ACH functionality.  What you do get is the ability to setup a expedited free wire with a bank account registered to the same name.  I wire money to my bank account at a bank selected for cash management services.  I get great local banking service and and all the free online ACH transactions I care to execute from my bank account.

There are likely companies that offer a better brokerage account with respect to cash management. mysolo401K.com will set you up with any of them. But I don't actually want to choose my brokerage firm by their cash management functionality.  Choose your brokerage firm.  Make sure they have some kind of expedited free wire available to move money back and forth to a bank account. Then choose your bank.

I'm interested to find a low cost and reliable solo 401k for real estate investing.

According to their websites, mysolo401K charges 800 for setup plus a 100 termination fee, Sense Financial doesn't list any fees, and there is no interest on deposits listed for either.

I used dave cole 

http://freedomfirst401k.com/. He doesn't pay me to recommend him. 

Love investing in my 50k distressed houses with this product.

@john

Cost and reliability are often times two totally separate features in the self directed plan industry.

There are document providers and there are advisory firms capable of not only putting the plan in place, but also helping you understand the IRS guidelines as they pertain to real estate investing so that you can operate with confidence and achieve investing success.

None of the firms offering Solo 401k plans with checkbook control will hold your funds or provide investment options.  We create plans that put you in total control.  You will select the institution that holds the funds, and when capital is not invested in non-traditional assets such as real estate or notes, you will determine how to keep that capital deployed.  You will have the full range of IRS allowed assets from stocks to real estate to choose from.

Contact several vendors and see what they have to say.  Ask about price last.  You will learn a lot more that way.

Don't just speak with plan sales reps.  Get client references and always consult with your personal tax/legal advisors.

Best of luck 

@John R. , Sense Financial doesn't list interest on deposits because they don't hold the funds. You can put the funds anywhere you choose to--anywhere that can open a trust account. Mine are at my local bank. I was very pleased with the assistance I received at Sense Financial. I set up the Solo 401k account a couple months ago and I am expecting my second deal to repatriate funds tomorrow. It is a pleasure not having to deal with custodians in this account.

Originally posted by @Jeff Rabinowitz :

@John R., Sense Financial doesn't list interest on deposits because they don't hold the funds. You can put the funds anywhere you choose to--anywhere that can open a trust account. Mine are at my local bank. I was very pleased with the assistance I received at Sense Financial. I set up the Solo 401k account a couple months ago and I am expecting my second deal to repatriate funds tomorrow. It is a pleasure not having to deal with custodians in this account.

Aha, good point. Thanks for all the feedback already. Comparing cost for an IRA vs 401k, at least one real estate SDIRA pays 2% on holdings; however they charge fees for every little item, and their lack of email security is quite extravagant.

Based on what the Solo 401k's do, it seems to me that even mysolo401k's fees are too much.