Hey everyone. I have a question and need your opinion on solo 401k plans. Since we are all self employed are there any of you who contribute to Solo 401k plans? I have been mystery shopping for a little while now and setting aside a percentage from the payments in a savings stash. Since that stash is getting bigger I would like to invest in a 401k, but I am wondering about the best company to do it with. Also, is there anything I need to know beforehand other than the basic contribution rates and tax information?

You can self direct your 401k with an online brokerage firm. Many of them offer great deals with free trades for the first 60 days, then $6.99 per trade after the promotion is over. I am with TD Ameritrade. I am allowed to contribute $6500 per year to my Roth IRA. I have a second account as well. I think Scott Trade and E Trade may be offering some deals right now. There are some value stocks to be had right now and we are in a bull market, so go for it!

I had an Individual Retirement Account (IRA) with Fidelity, and rolled it over to BB&T Investment Services when I switched to them for my banking.

Check with your bank and see if they offer 401(k)s. If not, do shops for investment companies and ask your questions.

When I was with Fidelity, I did a shop with Bank of America. I gave them my real information and the outcome led me to BB&T, who I also shopped.



Edited 1 time(s). Last edit at 07/23/2017 10:37PM by HonnyBrown.

I prefer self-management. I don't see the point in paying someone else to manage my money. I got a 20% return on my investments last year as a result, and I am doing quite well this year, too. Research and make your own decision on which way to go.

There are a lot of options. It mostly depends on what you want to do and how much money you want to put away. If you are not fully funding an IRA and want to save less than $5500 a year (depending on age) then an IRA is the way to go. There are several other options for someone self employed who needs or wants to save more than this. I personally use a SEP IRA. I chose that because it was very easy to setup using ETrade, where my IRA and regular brokerage accounts are. It lets me save 25% of my profit pretax. A Simple 401K seemed to be a bit harder to setup and 25% was enough for me.

Back to the IRA thing. If you are saving less than $5500, an IRA is a MUCH simpler way of doing it. Let's say you make $20,000 a year after all of your deductions and you want to save 25% of that ($5000). With an IRA you simply put your $5500 in and boom your taxable income is now $14,500. With a SEP you do have to figure separately your contribution limits (I let my tax software do that). Let's say you only make $19,816, now you can no longer save your $5000 but now instead can only contribute $4954. If you go with a Simple 401K then now you have to figure what part is your employee contribution and what part is your company contribution and holy cow then it gets crazy weird with lots of things you now have to keep track of as long as you have the plan.

Thanks everyone for your replies. This is really good insight and has given me a good starting point on where I need to go from here.

To add, you absolutely can have some combination of plans with an IRA and one of the self employment options (Simple401k, SEP IRA).

I have my money at Vanguard. Their fees are lower than many other companies.

Wow! That's great. You are my hero.

@JASFLALMT wrote:

I got a 20% return on my investments last year as a result, and I am doing quite well this year, too.

Thanks, kimmie, some of it was luck and some just good instincts and studying. I have had my share of duds (Vanguard Natural Resources is one, ugh), too, but my tech stocks have been cash cows. I bought Apple at $93 per share and it's up to over $150 a share right now. It's a keeper as it has a nice dividend.

I have to crow a little: I bought a whole bunch of Advanced Micro Devices (AMD) at $12 per share a couple of months ago and they reported earnings today...they did really well and the stock is nearly to $16 a share today. It's mostly a trade stock as they don't have a dividend.

For those that are of a certain age and have no investments, please consider it. It's not hard to do.

Here's another thing to consider: if you have debt, pay it off before considering any investments. It makes no sense to have credit card or other higher percentile debt at a certain level and then earn a lower percentage, plus trade fees, on your investments.

When I got my first job out of college, my Dad told me to put the max (15%) in my Fidelity 401(k), and he talked to me about which funds to invest in. A year ago, I did a shop with BofA Investments. I gave my real information and had him look over my statements. My IRA account at Fidelity had a lot of rollovers. Dude told me that my Dad gave me great advice, and asked if he wanted to come work for them.

He recommended streamlining because of the duplicate sectors. I rolled the entire account over to BB&T, and I'm very happy.

Timely thread. If ever I change from very part timer to being a business owner in this industry, I will need to decide about this, too. I am pleased with my personal accounts and I assume that I would like to continue with the same companies if I had business accounts. I have given myself until the end of the year to make the big decision: continue as very part timer, stop, or have an actual business. If I choose the business, I can refer to this thread for additional ideas on how to make my business' profits earn money.

My ex was a stock broker before we married, and after our daughter was born, he started a trust for her college,
bought AT@T 35 years ago and never believed in selling, so her expensive college was paid for and her trust is soaring. Being diverse helps, and don't sell when the market goes down, taxes on selling is (I believe) 28%.