All Forum Posts by: George Blower

@Robin C.

As others mentioned, there are fees to establish and maintain a Solo 401k which provides for checkbook control, real estate investing, etc.

Of course, the threshold considerations are whether (i) you are eligible (i.e. self-employed with no full-time w-2 employees) and (ii) retirement funds in an account that you can rollover (i.e. former employer plan and/or non-Roth IRA that is invested in investments that can be liquidated an acceptable cost).

Assuming that you cross these threshold issues, here are some additional comments/considerations:

1. Confirm that the provider has a pristine reputation (e.g. Better Business Bureau reviews, etc.).

2. You may wish to confirm that the new 401k provider has experience with the particular investments in which you intend to invest your retirement funds as you very likely will have questions in terms of the mechanics (e.g. how do you invest in real estate, etc.).

3. You may wish to confirm that the new 401k provider will handle the ongoing compliance support such as any required 5500 filing (e.g. 5500-ez for a one-participant plan with assets in excess of $250,000), any required tax reporting (e.g. 1099-r in the event of a distribution or in-plan Roth conversion), mandatory plan updates and amendments, etc.

4. If you might take a 401k loan, you may wish to confirm that the new 401k provider will prepare the required 401k participant loan documents.

@Bryan O.

Thanks for the response.  As I mentioned, the "best" bank will depend on different factors as I mentioned in my response.  If you are looking for names of banks that open bank accounts for Solo 401k plans, there are many banks where we have received positive feedback including Wells Fargo, Bank of America, PNC along with local banks and credit unionsjust to name a few.  As I mentioned, the bank's role is limited so you don't need a specialized bank.

@Michael Oliveira

Welcome to BP.

@Robert M Parsons

Welcome to Bigger Pockets.

@Justine Lee

Welcome to Bigger Pockets.

@Meacham Meacham

Welcome to Bigger Pockets.

@Susan O.

If you qualify, you can set up a Solo 401k plan through a 401k plan provider which allows for Roth funds and then open brokerage accounts (e.g. one for Pre-tax funds, another for Roth funds) at E-trade.

@Ed Moran

Here is a list of providers:

https://www.biggerpockets.com/member-blogs/9552/70408-ira-and-solo-401k-non-recourse-lenders

@Bryan O.

While what is best will depend on your objective, here are some considerations:

• If you want access to bank checks, a debit card and/or the ability to ACH funds out, you will need a bank, credit union etc. rather than a brokerage.  
• There are 100s of banks and credit unions that have opened accounts for a Solo 401k.  
• Keep in mind that the bank's role is limited to simply providing the account (i.e. no tax reporting, no recordkeeping, etc.) such you may wish to de-prioritize familiarity with Solo 401k plans and focus on other things that are important to you (i.e. branch locations, fees, etc.).
• If you want the ability to invest in stocks, mutual funds, etc., you will need a brokerage account. 
• Many brokerage firms will open "free" accounts (i.e. no setup fee, no maintenance fee), which will also come with checkbook access and the ability to wire funds out such that they function as a "hybrid" between a bank and/or brokerage account. 

What is generally more important than the bank or brokerage provider is the Solo 401k plan provider. Here are some comments/considerations when choosing a Solo 401k provider:

1. Confirm that the provider has a pristine reputation (e.g. Better Business Bureau reviews, etc.).

2. You may wish to confirm that the new 401k provider has experience with the particular investments in which you intend to invest your retirement funds as you very likely will have questions in terms of the mechanics (e.g. how do you invest in real estate, etc.).

3. You may wish to confirm that the new 401k provider will handle the ongoing compliance support such as any required 5500 filing (e.g. 5500-ez for a one-participant plan with assets in excess of $250,000), any required tax reporting (e.g. 1099-r in the event of a distribution or in-plan Roth conversion), mandatory plan updates and amendments, etc.

4. If you might take a 401k loan, you may wish to confirm that the new 401k provider will prepare the required 401k participant loan documents.

@Joe Hermanson

To add to the discussion, here are some considerations if you take the step to select a self-directed IRA provider:

I suggest that you interview a few providers and as you do so here are some issues to consider:

1. In order to have checkbook control, the IRA account will need to be at a trust company that will allow the IRA to invest in an LLC (where you will be the manager and your IRA will be member - an as manager you will have checkbook access to the LLC bank account). Therefore, you will want to confirm that the trust company allows for investing in an LLC and the associated fees and minimim balance that applies to the IRA account.

2. Confirm that the IRA LLC provider will prepare all of the documents needed to not only form the LLC (articles of organization, SS-4 to obtain an EIN) but also the documents needed by the trust company to process the investment of IRA funds in the LLC.

3. Confirm that the provider has experience with the particular investments in which you intend to invest your retirement funds as you very likely will have questions in terms of the mechanics (e.g. how do you invest in real estate, etc.).

4. Confirm that the provider has a pristine reputation (e.g. Better Business Bureau reviews, etc.).

5. In addition, if you are self-employed with no full-time employees you may wish to consider opening a Solo 401k instead of a self-directed IRA as it has several advantages over an IRA LLCsuch as much higher contribution limits, direct checkbook control (i.e. no need to have the account at a speciality trust company), ability to take a 401k loan, exclusion from unrelated debt finance income tax with respect to investment in real estate acquired with non-recourse financing, etc.