Last post I wrote about what motivated me to get into a
self-directed solo 401k. While it has been incredibly liberating and motivating
to have control – it was not completely easy, nor for the person who wants it
all done for them. I guess that’s a long-winded way of saying the solo 401k
that I have is not for everyone.
If you like having someone hold your hand through your
investment decisions and take care of all the paperwork so all you do is look
at an online statement, you may choose another course with a large, traditional
Thankfully, my advisor (who is Gary Anderson, my fellow
AllBusiness.com Advisor in this blog) built a technology platform for other
financial advisors to create solo 401k plans for their clients (people like you
and me). That is not meant to toot the horn for Gary, but to say that there are
people out there who have a way to get this solo 401k plan created for you.
There are large firms like Guidant, Pensco, and others who can do structures
similar to this.
The steps, the pain, the victory.
So, Gary set up the plan, asked the relevant private data
type questions, and within a few days I had a binder with my Small Business
401K Plan documents, which included a trust document. This is about 200 pages, I
think. All the legal and IRS type stuff I have to keep.
I then took this plan to my local bank. I actually tried to
do this with an internet bank, but they totally blew it and cost me a bunch of
time and small sums of money. I walked in to Viking Bank (here in Poulsbo, Washington and
sat down with Tracy, my new banker, who was awesome and walked me through the
bank account setup specific to this solo 401k structure (http://www.vikingbank.com). Not that much different than a traditional checking account, but you want
your plan to have its own Employer Identification Number and things like that.
Small things to me, but big to the IRS. I like playing by the rules with those
With the solo 401k plan document, plus the important trust
document, they were able to set up my checking account. The challenge came in
getting my traditional brokerage at Ameritrade (notice no link….) to transfer
MY retirement monies into my new solo 401k account. Let’s just say that they
did not make it easy, or fast, or painless. This is not a place to grind axes,
as the saying goes.
Now I guess there are other steps I could explain or share,
but with the right advisor, you too can be free and self-directed! If some of
our readers want to know more, we can explain the intricate details of this
plan in a future blog post. This seemed like enough detail for now, before the
Come visit at UnretiredBoomer and share your success stories — as a financial advisor or as a consumer or small business owner (like me) and we’ll converse over virtual java…