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Solo 401K Vanguard FORM

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  • Phinance Phinance 
    Participant
    Status: Physician
    Posts: 8
    Joined: 04/14/2019

    Hi all,

    Helping my fiancée set up her solo 401K @ Vanguard. She is going to have a full time 1099 position (sole proprietorship, my impression is creating a business entity/LLC is not necessary at this point). She would like to contribute towards retirement and maintain her ability to do a back-door-Roth.

    At first glance the solo 401K form seems daunting. What info will we need before setting this up?

    Do we need a federal tax ID number? Or will her SSN suffice?

    Do we need a separate bank checking account?

    How do we actually “send” money into the 401K? Online? Mail in Check?

    Anything else?

    If anyone has any experience would appreciate your advice. Thanks.

    "Our life is frittered away by detail. Simplify, simplify." -Thoreau

    #206609 Reply
    Avatar DAK 
    Participant
    Status: Other Professional
    Posts: 20
    Joined: 11/30/2016

    First, don’t do it (at Vanguard)!  Choose some other provider that can roll IRAs into it so that she preserves the option to do backdoor roths down the road, in case she wants to rollover her 401k or 403b from current/former/future employers.

     

    Beyond that, get an EIN from the irs online and she can use personal info (addresses, checking account, etc.) to setup and fund the account.  In most cases you may have to print a paper application, but you can submit it online and other transactions should be mostly done online.

     

    #206656 Reply
    Phinance Phinance 
    Participant
    Status: Physician
    Posts: 8
    Joined: 04/14/2019

    Thank you DAK, will do.

    "Our life is frittered away by detail. Simplify, simplify." -Thoreau

    #206764 Reply
    Avatar Peds 
    Participant
    Status: Physician
    Posts: 3988
    Joined: 01/08/2016
    Do we need a federal tax ID number? Or will her SSN suffice?

    Click to expand…

    an EIN would be nice. takes about 5min online at irs.

    Do we need a separate bank checking account?

    Click to expand…

    no.

    How do we actually “send” money into the 401K? Online? Mail in Check?

    Click to expand…

    whatever your provider allows. online is the easiest.

    Anything else?

    Click to expand…

    read this

    https://www.whitecoatinvestor.com/where-to-open-your-solo-401k/

    #206767 Reply
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4392
    Joined: 05/13/2011

    First, don’t do it (at Vanguard)!  Choose some other provider that can roll IRAs into it so that she preserves the option to do backdoor roths down the road, in case she wants to rollover her 401k or 403b from current/former/future employers.

     

    Beyond that, get an EIN from the irs online and she can use personal info (addresses, checking account, etc.) to setup and fund the account.  In most cases you may have to print a paper application, but you can submit it online and other transactions should be mostly done online.

     

    Click to expand…

    Vanguard accepts 401k rollovers, just not IRA and SEP-IRA rollovers.

    I’m switching from Vanguard to another provider this week (not because of that reason, but because Vanguard doesn’t offer the Mega Backdoor Roth IRA option). There will be a blog post coming up on it.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #206769 Reply
    Liked by ENT Doc
    Phinance Phinance 
    Participant
    Status: Physician
    Posts: 8
    Joined: 04/14/2019

    Awesome, thank you.

    "Our life is frittered away by detail. Simplify, simplify." -Thoreau

    #206962 Reply
    Avatar FluorideFreeVaccines 
    Participant
    Status: Dentist
    Posts: 19
    Joined: 01/31/2019

    I did it at vanguard.  They do require you to get an EIN but it is very easy to do on the IRS website. I did not have any previous 401k/403 or Sep IRAs so rollover wasnt an issue.  I like vanguard too.  When you open the account they will send u this super long PDF that they want you to print and mail back, dont do this, give them a call and someone can walk you through it and send you an electronic version that is much easier and faster.  You are both the employee and employer so you will login to the smallbusiness vanguard site to set it up and adminster it but it will still show on your personal account too and you can execute trades from there as well. It is a little more work than just opening up an IRA or brokerage account but well worth it.

    #207444 Reply
    Hank Hank 
    Moderator
    Status: Attorney
    Posts: 1280
    Joined: 03/27/2017

    Vanguard funds are awesome!  Vanguard as a 401(k) provider leaves a lot to be desired.

    #207931 Reply
    Liked by ENT Doc
    Avatar saildawg 
    Participant
    Status: Physician
    Posts: 307
    Joined: 01/24/2016

    First, don’t do it (at Vanguard)!  Choose some other provider that can roll IRAs into it so that she preserves the option to do backdoor roths down the road, in case she wants to rollover her 401k or 403b from current/former/future employers.

     

    Beyond that, get an EIN from the irs online and she can use personal info (addresses, checking account, etc.) to setup and fund the account.  In most cases you may have to print a paper application, but you can submit it online and other transactions should be mostly done online.

     

    Click to expand…

    Vanguard accepts 401k rollovers, just not IRA and SEP-IRA rollovers.

    I’m switching from Vanguard to another provider this week (not because of that reason, but because Vanguard doesn’t offer the Mega Backdoor Roth IRA option). There will be a blog post coming up on it.

    Click to expand…

    I have just gone down the rabbit whole for mega back door roth, I made a post on it that I hope you will comment on as I think I am ready to pull the trigger.

    https://www.whitecoatinvestor.com/forums/topic/research-into-solo-401k-with-intent-for-mega-backdoor-roth/

    #207944 Reply

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