Where do I get my self directed solo 401k?

[Amy Ranae]

Hi everyone,

I have a few old solo 401ks at vanguard that do not let me self direct. I’m looking to roll them into a different bank that will let me send direct and make loans for real estate investing to take advantage of some of the cool CARES act stuff.

What banks offer this type of accounts? I called Schwab and they had no idea what I was talking about.

Thanks for your help!

[George Blower]

@Amy Ranae

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, Bank of America, 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.

Considerations in Choosing a Solo 401k Provider:

1. Confirm that the provider has a pristine reputation (e.g. Better Business Bureau reviews, etc.).

2. You may wish to confirm that the new 401k provider has experience with the particular investments in which you intend to invest your retirement funds as you very likely will have questions in terms of the mechanics (e.g. how do you invest in real estate, etc.).

3. You may wish to confirm that the new 401k provider will handle the ongoing compliance support such as any required 5500 filing (e.g. 5500-ez for a one-participant plan with assets in excess of $250,000), any required tax reporting (e.g. 1099-r in the event of a distribution or in-plan Roth conversion), mandatory plan updates and amendments, etc.

4. If you might take a 401k loan, you may wish to confirm that the new 401k provider will prepare the required 401k participant loan documents.