Identifying the Best Solo 401k Plans

Best solo 401k plans | Best Individual 401k Plans | Best Solo 401k Providers

Is there really such a thing as best Solo 401k Plans? Well, it depends on what you are looking for in your Solo 401k provider. In other words, all Solo 401k plans are approved by the IRS through the issuance of an IRS determination letter; therefore, when determining “best Solo 401k plans”, you need to concentrate on the following 4 main items :

Investments: For those looking to invest in alternative investments such as real estate (fixer-uppers, rehabs, residential, commercial, foreign, etc.), tax liens, trust deeds, precious metals (gold and silver), private companies, etc., a self-directed Solo 401k may be your best option. However, if you are only looking to invest in traditional investments such as stocks and mutual funds, an Individual 401k offered by Fidelity, Schwab, or TD Ameritrade may be your best route.  

Loan: If you are looking to take a loan/borrow from your solo 401k, a self-directed Solo 401k may be your best plan option as most individual 401k plans offered by Vanguard, E-TRADE, Ameritrade, Fidelity or Schwab do not offer the Solo 401k loan option.

Service: Possibly the most important feature when determining who offers the “best Solo 401k plans”is service, especially if you are looking to invest in alternative investments. Also, you may want to consider a  plan containing Solo 401k loan provisions, and one that offers free ongoing solo 401k plan maintenance—such as free preparation of annual Form 5500-EZ and issuance of Form 1099-R to report Solo 401k distributions once you reach age 70 ½.

Fees: While the fees charged by Solo 401k providers such as Fidelity and Charles Schwab may seem minimal, they are most likely quite higher than you think. Reason being, unlike Self-Directed Solo 401k providers that offer Solo 401k with checkbook control and charge one flat annual fee, Solo 401k plans offered by most brokerage firms generally deduct their fees from the underlying mutual fund or stock share value in addition to charging stock trade fees.

In sum, the best solo 401k providers may be those that offer self-directed Solo 401k plans with checkbook control option, Solo 401k loan option, alternative investments option, and full service option at one low and disclosed annual fee.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>


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