Schwab Solo 401k Brokerage Account from My Solo 401k Financial

A Schwab Solo 401k brokerage account with checkbook control from MySolo401k.net is ideal for those looking to still have the option to invest in equities while also gaining checkbook control over their retirement funds to invest in alternative investments like real estate, notes, and private equity, for example. This arrangement also allows for solo 401k participant loans.

A Schwab Solo 401k with checkbook control comes with the following features:

Checkbook

fund Solo 401k alternative investment purchases, e.g., real estate, precious metals, tax liens, promissory notes, private placements, etc. by writing checks from the Solo 401k Schwab brokerage account.

Solo 401k Loan

after we prepare Solo 401k loan documents, process Solo 401k loan directly from the Solo 401k plan Schwab brokerage account.

Brokerage Account

continue to trade equities and grow your retirement funds tax-deferred, deposit investment gains from your Solo 401k’s alternative investment holdings (e.g., rent check proceeds from real estate) directly into your Solo 401k Schwab brokerage account, and make your annual Solo 401k contributions directly into the brokerage account.

How it works

Charles Schwab is simply providing brokerage account for your Solo 401k, and MySolo401k.net is your Solo 401k provider. In other words, even though Schwab also offers Solo 401k, their Solo 401k plan document restrict you to only investing in stocks and mutual funds; however, by using our Solo 401k document, which allows you to serve as trustee of the Solo 401k and invest in alternative investments such as real estate, precious metals, tax liens, promissory notes, private stock, etc., as well as process Solo 401k Loan, Schwab is not involved in the administration of the Solo 401k.

Documents for Opening Schwab Solo 401k Brokerage Account

To open Schwab Solo 401k with checkbook control, you will need to submit MySolo401k.net Solo 401k plan documents, which we prepare in 24 hours, along with Schwab’s applicable brokerage account forms and checkbook paperwork, which My Solo 401k Financial will complete for you.

 Fees Charged by Charles Schwab

Because Schwab is simply holding the funds in a brokerage account under the solo 401k offered by My Solo 401k Financial, the only fees that apply to the Schwab brokerage account are:

Stock trading fees of $4.95; and

outgoing wire fees of $25.00.

Options QUESTION:

I have a self-directed solo 401k that I opened with your company with funds sitting in a non interest bearing bank account. I went to Schwab to transfer some funds so that I could do some trades, including options. They told me with a single 401k account, I could only be approved for a level zero or covered options trading. Is there something somewhere that states differently – such as being able to trade options without owning the underlining stocks?

ANSWER:

While Schwab is of course free to set the terms of their accounts, they may have understood that you were asking about a solo 401(k) provided by Schwab as opposed to opening a brokerage account where the self-directed solo 401k plan is provided by another company such as My Solo 401(k) Financial. You may wish to call back and clarify – specifically, you would be opening a Schwab company retirement account which is the type of account that Schwab opens for our clients. If you wish to open a brokerage account at Schwab for the self-directed solo 401k that we offer, please let us know so that we can prepare the required Schwab documents.

Transfer Existing Schwab Individual 401k Question:

I am working on helping a client open a new solo 401k.  We are looking at using your company, but we have some questions.
If we move the account over, would we be able to keep some of the assets that are currently held through the 401k plan? or would they all need to be liquidated?  We are looking at using Charles Schwab as the custodian, and his current “individual 401k” is located there.  We would just need to re-establish the plan, right? and he would be able to keep the investments he currently has?

ANSWER:

Good question, and the quick answer is yes. More specifically, the IRS rules allow for the change from one solo 401k plan provider company to another. This type of change is known as a plan restatement because the self-employed business is not shutting down the 401k plan but rather switching from Schwab as the 401k provider to a company like My Solo 401k Financial as the new self-directed solo 401k provider.

We have found this to be quite common (i.e., where an Individual 401k client at Schwawb decides that they would still like to continue use Schwab to hold the funds but would now like to use our company as the new solo 401k plan document provider).  Such arrangement, will result in opening a new brokerage account at Charles Schwab for the self-directed solo 41k that we offer ( we would draft new solo 401k plan documents). Subsequently, we would prepare a Schwab Individual 401k internal transfer form so that they can move the existing cash and securities in-kind to the new self-directed solo 401k brokerage account. Once the new account has been funded, Charles Schwab will then issue a checkbook in the name of the solo 401k plan which can be used to place alternative investments such as real estate, notes, private equity, metals, and tax liens, to name a few. The checkbook can also be used to process the solo 401k participant loan funds as our plan allows for loans. Lastly, we would handle all the necessary paperwork to make this transition happen.

Financial Advisor Question:

I have a quick question:  if our client works with you and establishes the Solo 401k at Schwab, and then you all help him roll over his current IRA and SEP IRA into it, can he be invested in stocks and bonds with us as the advisor until he finds real estate opportunities he would like to pursue?  In other words, if the account is under our master at Schwab, will we have trading ability, as we do now, in addition to him having a checkbook to purchase other assets such as real estate?

ANSWER:

Yes you should still be able serve as your client’s adviser under the Charles Schwab brokerage account for the self-directed solo 401k plan that we offer which also allows for investing in physical real estate in addition to equities. However, you can ultimately confirm with Schwab if you will need to file any additional adviser forms with them.

Private Investment Question:

While the Schwab brokerage account for the new self-directed solo 401k is being established, do we need to fill any other form or paper work with real estate guys for purchase of shares. their lawyer is preparing the paperwork I can ask them to send once they are ready.

ANSWER:

Since we are not the trustee of the self-directed solo 4o1k plan (you are) you won’t submit any investment paperwork to us nor to Schwab.
Instead, as the trustee of the solo 401k plan you hold on to the investment paperwork.
Once you let us know that the new Schwab brokerage account for the solo 401k has been funded,  we will e-mail you the Schwab wire directive that can be faxed to Schwab by you to request the funds for the investment to be sent by wire to the investment sponsor.
Lastly, please see the following procedure when investing a solo 401k plan in private shares.

SOLO 401(K)

MENU