Sometimes you are forced to switch Solo 401k Providers for the following reasons:
- To gain Solo 401k checkbook control
- To invest in alternative investments (e.g., real estate, precious metals, Notes, tax liens, etc.)
- To reduce solo 401k plan document administration fees
- To gain access to Solo 401k Loan (borrow from Solo 401k)
- To gain access to making all three contribution types: pretax, Roth, and after-tax
However, you are not always sure about how to go about switching Solo 401k provider.
Of course, before you proceed to Open Solo 401k with a new provider, first make sure the new provider understands why you are looking to make the change so you don’t end up where you started.
Here are the logistics involved in changing Solo 401k provider:
- You are not required ro file a final Form 5500-Z because you are simply switching solo 401k plan vendor.
- Instead, your new Solo 401k provider will easily restate the existing plan when they draft the new Solo 401k Plan Documents (e.g., adoption agreement, Solo 401k Trust Document) by:
- Referring to the previous Solo 401k provider Plan Adoption Agreement to obtain the original plan effective date and name of the plan. These two items will then be listed on the new solo 401k adoption agreement along with the new restatement effective date.
- Next, if the Individual 401k or Solo 401k provider is Fidelity, Charles Schwab or TD Ameritrade, you will have the option of continuing to utilize them for brokerage account services as well checkbook control (known as 401k checkbook control) because you will be using your new Solo 401k provider’s plan documents which allow for investing in real estate, precious metals, tax liens, trust deeds, private shares, etc. You will also gain access to Solo 401k Loan option.
Visit following links to learn more about switching your Individual 401k to Solo 401k while still having option of continuing to use your current Individual 401k brokerage provider.
12 Month Period QUESTION:
I called Spark401K and they need to know if we are Transferring the Plan or Terminating.
ANSWER:
The plan is being transferred to another solo 401k plan provider. This is referred to as a restatement. Therefore, your self-employed business is not electing to no longer participate in a solo 401k plan. Instead, it is ceasing the services of Plan provider A and using the services of Plan provider B.
Restate Edward Jones Solo 401k Plan QUESTION:
I currently have a solo 401k with Edward Jones, but they now do not allow 401k participant loans to be taken out. Am I able to close that one out and start up a new one with your company? Any assistance would be appreciated.
ANSWER:
We have helped a fair number of people with solo 401(k)’s at Edward Jones who want to take a loan. Our IRS-approved plan certainly allows for loans and we handle all of the required loan documents as part of our service for no additional charge. In fact, we would handle as a restatement so your existing plan would continue to exist but would be governed by our IRS approved plan documents which allow for loans. You can even keep the account at Edward Jones.
Identifying Existing Vanguard Individual 401k Plan Effective Date QUESTION:
Do you know how I can easily find out when my Individual 401k was first opened with Vanguard so I can transfer it to your self-directed solo 401k with checkbook control?
ANSWER:
Need to be logged into small business side (not personal side)
Restate Amundi Pioneer Solo 401k Plan QUESTION:
I am self employed and currently have a solo 401(k) through Amundi Pioneer. I’m looking for more flexibility on investments including real estate and private equity, some of which could be subject to UBIT. I also plan to continue to contribute the maximum each year. I think I’d be best served with a self directed Solo 401(k). Can we setup a time to discuss?
ANSWER:
We have helped existing Amundi Pioneer solo 401k clients restate their plan to our plan in the past and this would be considered a non-taxable event because you are not shutting down your business’s solo 401k but rather firing the current solo 401k provider (in this case Amundi Pioneer)
We can certainly help you restate your existing solo 401k with Amundi Pioneer to our self-directed solo 401k which would allow you to invest in alternative investments such as real estate, notes, tax liens, private equity, cryptocurrency as well as traditional investments such as stocks, mutual funds and index funds, to name a few.
Essentially, when an existing self-employed 401k plan is restated to a self-directed solo 401k plan, neither a final Form 5500-ez nor a Form 1099-R is required because you are simply changing plan providers form provider A to provider B (My Solo 401k Financial).
