Self-Employed 401(k) options

[GoodSense]

DH is self-employed and his business fluctuates. For the past few years, he has had SEP-IRAs we set at at Vanguard. This year, we may be able to put away more. We are thinking about opening a self-employed 401(k) for him. However Vanguard doesn't have this option. The only other one that doesn't cost an arm and a leg appears to be Fidelity.

Not that there's anything wrong with Fidelity, but I'm just wondering if there are any other options? We are Vanguard people so venturing outside of it is something new. Any suggestions?

 

[TooFrugal]

When I checked around, I thought Fidelity was the best. Their customer service is really helpful and they have a lot of 401 experts on staff. There is a Fidelity office in my city so it is convenient to just go there and make account desposits as needed.

Another plus with Fidelity is that you can buy TIPS for your self employed 401K with no service charge.

The only downside I have found with Fidelity is now that now that we are moving more towards fixed income investments like CDs a bit more, their rates aren't usually as good as you can get at places like Ally (GMAC), at least for the 1 - 2 years terms. Plus they are broker CDs so you don't have any guarantee of getting your principle back if you need to sell a CD prior to maturity.

There are smaller places that let you have self directed accounts where you can buy things like Ally bank CDs, but the smaller places charge an annual maintenance fee as a percent of assets, which means if you have a decent size account the fees are pretty significant. So what you gain in higher interest rates on the CDs you end up losing in annual maintenance fees.

So for me I have not found any overall less expensive or better options than having our 401Ks at Fidelity. I have some accounts at Vanguard as well and personally find Fidelity's online systems more advanced and transactions easier to complete than at Vanguard. I closed out some 529 plans and a couple of other accounts at Vanguard and it was a lot of hassle. Vanguard still required signatures guarantees and paper checks for transactions I could complete online at Fidelity with a wire transfer to my bank account.

 

[Kronk]

I haven't had any issues with my Fidelity account. I wasn't entirely sure how Fidelity was going to set it up, but it turned out to be set up as a brokerage account. So once the check from my corp clears, it gets dumped into a savings-account type thing until I log in and buy my mutual funds. There is a schedule of fees (which I don't remember offhand), but at the very least you can trade Fidelity funds for free. On the down side of that, some of the fund minimums are $10k, which can be irksome.

The Fidelity web site wasn't quite as easy-to-use as Vanguard's, but it isn't bad. All my other investments are in Vanguard (and I worked briefly at their HQ over a decade ago), so I know it is a wrench to branch out. Based on my experience, though, it's pretty good.

 

[plsprius]

This is easy. I set up a Vanguard Individual 401(k) last year when they began offering that service near the end of 2008. So far, no big issues.

- plsprius

 

[thefinancebuff]

DH is self-employed and his business fluctuates. For the past few years, he has had SEP-IRAs we set at at Vanguard. This year, we may be able to put away more. We are thinking about opening a self-employed 401(k) for him. However Vanguard doesn't have this option. The only other one that doesn't cost an arm and a leg appears to be Fidelity.

Not that there's anything wrong with Fidelity, but I'm just wondering if there are any other options? We are Vanguard people so venturing outside of it is something new. Any suggestions?

Although I have mine with Fidelity, Vanguard does have that option.

https://personal.vanguard.com/us/accounttypes/retirement/ATSI401KOverviewContent.jsp

 

[GoodSense]

Thanks so much for the suggestions! I didn't realize Vanguard has that option. Will look into Fidelity, too. Thanks everyone!

 

[summer2007]

I set up a Roth 401k with T. Rowe Price a while back.

They were one of the only ones offering the Roth option on a 401k.

Setting up an account to do this was the biggest hassle that I have been through setting up an account anywhere. It was like 100 times the hassle of setting up a Roth IRA with Vanguard.

So I know T. Rowe Price offers one but as far as recommending dealing with them goes...well they were a huge hassle for me.

Does fidelity or vanguard offer the Roth option yet? I ask every so often because I would like to switch to them but I have not asked in a while?

Jim