ForumsMega Backdoor Roth Solo 401kOpened a Solo 401k – Bank and Brokerage Account Recommendations

Forums Solo 401k Mega Backdoor Roth Solo 401k Opened a Solo 401k – Bank and Brokerage Account Recommendations

  • Opened a Solo 401k – Bank and Brokerage Account Recommendations

    1 Reply
  • Shahbaz Qavi

    Top SubjectMega Backdoor Roth Solo 401k,Solo 401k – 5500-EZ
    Top ForumsMega Backdoor Roth Solo 401k, Solo 401k – 5500-EZ

    Shahbaz Qavi

    Shahbaz Qavi

    Top SubjectMega Backdoor Roth Solo 401k,Solo 401k – 5500-EZ

    September 5, 2021 at 1:34 pm

    Hello all,

    I recently joined the community and signed up for the solo401k Plan. I wanted to get your recommendation to see where I should hold my accounts. I plan to do simple mega back door roth conversions for now. For now I am not planning on investing in real estate or crypto or loans. So I will need 3 accounts with 1 company then a roth IRA account with another company. Which companies would you recommend that make things easy?

     

    I saw some videos that said that the most common one is to hold the 3 accounts at fidelity and the roth IRA account with vanguard? Is that what you guys would recommend.

     

    Also I believe I need to open a bank account? Which bank would you guys recommend that makes it easy and electronic to manage. Thank You for your recommendations.

     

     

    Shahbaz Qavi
  • Detra Gilreath

    Top SubjectMega Backdoor Roth Solo 401k,Solo 401k Bank Account
    Top ForumsMega Backdoor Roth Solo 401k, Solo 401k Bank Account

    Detra Gilreath

    Detra Gilreath

    Top SubjectMega Backdoor Roth Solo 401k,Solo 401k Bank Account

    September 7, 2021 at 10:04 am

    Great Questions Shahbaz!

    When it comes to brokerage accounts for your solo 401k, the most popular brokerage Institutions, based on client feedback are Fidelity, Schwab, TD Ameritrade and Etrade. All of them provide checkbook access, are compatible with solo 401k’s and support Pre-tax, After-tax, and Roth accounts for Mega backdoor conversions. Simply let us know your institutional preference.

    The most popular option for Mega Backdoor Roth Solo 401k contributions and then conversion to a Roth IRA is likely Fidelity. Please see more about the process here: How to Process a Fidelity Investments Conversion of Voluntary After-Tax Solo 401k Funds (non-prototype account) to a Fidelity Roth IRA – My Solo 401k Financial

    A solo bank account is also an option and our plan allows you the freedom to choose your banking institution for your solo bank account.

    Here are considerations in choosing a Solo 401k provider and bank to provide the account:

    Solo 401k Bank Account Considerations:

    Here are some general 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.

    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, PNC along with local banks and credit unions just to name a few. As I mentioned, the bank’s role is limited so you don’t need a specialized bank.

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