Flipper/Rehabber · Louisville, KY · Member since 2008 · 1k+ posts · 1k+ votes
15y
Well, I won't be taking Rich Dad's advice on this or anything else.
His opinions on 401K's are well documented as simplistic and they don't apply to this situation. He is referring to most employees who choose to put money in their company 401K plan. The trustees of those accounts do put severe restrictions and charge high fees (not taxes). We are talking about something very different.
His basic complaints are 2 fold.
1) Most people invest their 401K funds in mutual funds which pay tax and have fees and expenses and have market risk..
This is irrelevant to our discussion. We are not investing in mutual funds.
2) He believes your income tax bracket will be higher when you take the money out than it is now. This may be true or this may not be true. If you think it will be true then you do a Roth and pay the tax now.
If you don't you do the reg 401K. Problem solved.
He also ignores the benefits of tax free compounding in the reg 401K.
As Kevin (and nearly every legit financial expert) says a 401K is one of the most powerful wealth building vehicles available.
Can you invest in money-losing things with it? Yes. But the vehicle itself is great and the solo 401K is the way to use it to its fullest potential.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
14y
Originally posted by Bryan Hancock:
I bought a solo K this week from LodestarSD. I am quite happy with the purchase after trading voicemails with Sunwest Trust for 2 days. I am sure they are good, but the lack of access to someone that called back on time killed the sale for me.
I'm sorry to hear that. As they say, timing is everything, perhaps the Holidays were the cause of it.
At any rate, the important thing is that you found a company that performed to your satisfaction.
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y
I got a special deal on my purchase so it was really a no-brainer. One of our fund's principals is licensed to sell Nabers' product.
I honestly think this product is better for me anyway too. I need the ongoing support and it didn't seem like Sunwest Trust was going to provide this for me. I saw value in both, but the one I purchased was better for my personal situation.
Investor · Member since 2009 · 132 posts · 30 votes
14y
I understand the concept of being able to borrow from your solo 401k and pay interest to your plan but are their other benefits from a tax shelter perspective? I am just starting my research on these product.
Also,
i saw that you can borrow 50k as an individual, or 100k as joint (with a spouse). Can you add your spouse to your solo 401k if they have another retirement plan with a current/active employer?
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y
There are great tax benefits for a solo K. The limit changes each year, but I think you can defer all of the first $17k this year. You can then defer 25% of your next income tranche up to $49k in total (inclusive of the $17k) or so. The numbers change a bit year-to-year, but those should be close.
You should be able to add your spouse. I have my wife in our 401(k) plan and she has a corporate job.
Investor · Member since 2009 · 132 posts · 30 votes
14y
Thanks Bryan. I asked because I believe the borrowing provision increases from 50k to 100k if your spouse is on it. I have been researching these for a while but probably wont act on it for another 2-3 years but great info to have.
Its a powerful tool to defer paying taxes and their really is no reason not to do it if you can borrow it back for RE transactions.
Valley Springs, CA · Member since 2012 · 1 post · 0 votes
14y
If my wife and I start investing in real estate and we set up a solo 401k to access our IRA funds can we both rollover our traditional IRA's into the solo 401k trust account, in effect consolidating our funds to access them for real estate investing, or would the IRS prohibit us from combining our funds in this way?
Investor · Plano, TX · Member since 2012 · 7 posts · 2 votes
14y
I've been looking into Guidant Financial and chatted with them. They did mention they were the 'cadillac' of self-directed funds but they were touting quality. They offer checkbook control on their IRAs via an LLC method, and offer solo k as well.
Just recently came across QuestIRA (TX only I believe) and they had an article of people getting into trouble with checkbook control IRA's (especially Roth) and I was told to tread carefully with Guidant.
I am now even more confused on who to join but may take a look at Sunwest as mentioned.
Residential Landlord · Chicago, IL · Member since 2012 · 356 posts · 81 votes
14y
Jim Baum & Chris Steiner make sure you check with your own tax/legal advisers first. The 3rd parties selling these plans may not advise you of all the expenses involved, the ongoing fees, etc.
Might still be worth you while, just make sure you know everything involved.
Los Angeles, CA · Member since 2012 · 24 posts · 5 votes
13y
On http://www.foxnfox.com/solo/index.html they have their fees. Indeed they mention no annual fee. But I know that solo 401(k) plans have to be amended every now and then for new or changing IRS/DOL provisions otherwise they lose their tax qualified status. I assume foxnfox wouldn't do that for free forever. So the sponsors have to hire their own lawyers and accountants to keep the plan documents in compliance??
Los Angeles, CA · Member since 2012 · 24 posts · 5 votes
13y
I also wanted to ask what the folks in this forum think about http://www.mysolo401k.net/Pricing.html . It's the cheapest I found and they look serious to me on first glance. $600 setup and $125 annual. There's another provider on theonline401k.com at $185/year with NO setup fee, but the website seems a little less elaborate, not to say quick and cheap. mysolo401(k).net would be ahead after ca. 10 years if my math is correct, but they also provide more services than theonline401(k).com. What are your thoughts. OR does anyone know of a better option.
Real Estate Investor · Outstate, MN · Member since 2009 · 25 posts · 13 votes
13y
Looks like this post has been going awhile, but I'll add my 2c. I'm shopping Solo Roth 401k right now (want to avoid UBTI) for my better, seller financed/sub2 RE deals. I checked FoxnFox, they've added an annual fee as of November 2012, and I don't blame them, and would worry if they weren't getting paid to keep me current. My wife already has a Roth SDIRA with LLC/checkbook control with Sunwest, and I've been happy with the customer service. At $500 to set up and $200/mo, they're not the very cheapest 401k (Vanguard gets $1995 + $40/mo!) but they've been at it for years, and I've been pleased with their customer service.
Canyon Lake, TX · Member since 2008 · 74 posts · 3 votes
12y
Hello, I thought I would resurrect this old thread and re-ask the question of the original poster.
I'm looking for recommendations for Self-Directed Solo Checkbook 401K facilitators. Where a "facilitator" just sets up the 401K and provides the required 401K document/agreement updates as needed. Otherwise they are out of the picture.
I have searched the web and this forum and have found a handful of such facilitators, but it is difficult to know who is good or not. The setup fees and annual fees are varied. The best I have seen is about ~$500 for setup and ~$100/year. It seems important to pick one that will be around tomorrow otherwise one would need to start over with another company an incur the setup fees all over again.
Real Estate Agent · Fort Worth, TX · Member since 2010 · 208 posts · 70 votes
12y
I did my due diligence and decided to do business with people I like and trust. I preferred a qualified plan without exorbitant annual custodial and transaction fees (which aren't necessary, lesson learned).
Solo 401k and SDIRA Consultant · Orange, CA · Member since 2013 · 872 posts · 496 votes
12y
Hi all.
I'm familiar with Sense Financial. While I haven't used them for a solo 401 or SDIRA I have been to their meetings and in my opinion they seem to be honest and know what they're talking about. They have a comprehensive website and will answer any questions you have at any time. They offer checkbook control and I'm pretty sure they like to use Wells Fargo. I haven't done a lot of shopping around but I think they're prices are competitive.
Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
12y
I have been extremely happy with Mark Nolan and the folks at www.mysolo401k.net. They have been very responsive to my questions, whether by phone or email, and their fees are as low as anyone's (and posted right on their front page, which is nice and very transparent).
I asked quite a few questions on the front end about their company. They are staffed by extremely experienced attorneys and assistants who have many years experience with all types of retirement plans.
Flipper/Rehabber · Anaheim, CA · Member since 2010 · 188 posts · 118 votes
12y
I set up my Solo 401K with John Park. He was recommended to me through Jeff Brown, “The Bawld Guy” who has posted quite a bit on BiggerPockets. I paid John a onetime fee (no annual fees) and he set me up with everything. He is there by phone and email for many of my questions.
After I set up my 401K plan, I also became familiar with 2 other reputable 401K administrators. Both charge a startup fee and an annual fee.
@Mark Nolan has been around for quite a while. He has a very informative website www.mysolo401k.net and has answered a number of questions for me.
@Dmitriy Fomichenko at Sense Financial is local to me. I have been to a number of his seminars (which I found useful) and he has answered a number of my questions. He has a good reputation and I know people who have been very happy with his services.
Buy and Hold Investor · Commack, NY · Member since 2008 · 353 posts · 33 votes
12y
Chris - If John Park does not charge an annual fee, what happens when your plan needs to be updated or restated due to required changes in the law?
For All - If you get your plan through one vendor but don't like their on-going service, does anyone know if you can just get needed updates from someone else? Or do you have to pay for whole new wording, even though you have a current plan?
Chris - If John Park does not charge an annual fee, what happens when your plan needs to be updated or restated due to required changes in the law?
For All - If you get your plan through one vendor but don't like their on-going service, does anyone know if you can just get needed updates from someone else? Or do you have to pay for whole new wording, even though you have a current plan?
Dawn, if you have to move away from one document sponsor, it is unlikely that new sponsor will accept the original documents and just provide you with the updates. To be compliant, the updates must "fit in" with the original documents. And since original documents where not provided by the new sponsor, they will not work. We are heading into new PPA Restatement period later this year and all current plan documents from any and all sponsors will have to be restated (replaced with the new set of documents) in order for the plan to maintain it's qualified plan status. Make sure that you use the provider who will keep your plan documents up to date, otherwise your entire account is at risk.