Setting Up a Solo 401(k)

The Initial Paperwork

Step 1
Submit your Solo 401(k) application to us, which you can do online.

Step 2
Once we have your information, including the info on your company that will serve as the plan sponsor, we can get to work creating the Solo 401(k) plan documents. We create non-standardized proto-type customized plans, so it generally will take us a couple of days to get all the plan paperwork in order, register the plan with the IRS, and secure the plan’s new EIN.

Step 3
Once we are finished with the plan paperwork, we will send you the plan documents for an electronic signature. HelloSign allows you to securely and quickly execute the plan documents. We will set up a time for a review call and walk you through what you’re signing, and the purpose of each document.

Step 4
Once the plan documents have been executed, we’ll walk you through the next steps of opening a checking or brokerage account, and starting your rollover(s).  We can assist you with opening a hybrid checking/brokerage account with a large brokerage firm like Fidelity, Charles Schwab, TD Ameritrade, Interactive Brokers, E*Trade, or Scottrade.  We also work with a bank in Colorado named Solera Bank that has built a no-fee checking account specifically for a Solo 401(k).  Their online and mobile banking platforms are the best we’ve ever seen.  You can send bank wires online, make mobile deposits from your phone, and order cashier or certified checks online.  If you have another bank you’d prefer to work with, we’ll be happy to assist in any way we can.

The Funding or Rollover

Step 1
Most people don’t know it, but you can roll over or transfer Traditional, SEP, and SIMPLE IRAs to a 401(k). You can also roll over other 401(k), 403(b), TSP, and 401(a) plans to the new Solo 401(k) as well. Keep in mind, the only account you cannot roll into the Solo 401(k) is a ROTH IRA.

Step 2
Once the new Solo 401(k) is in place, we will walk you through the steps of rolling over your account(s).  Sometimes your current Custodian will have their own form that you’ll complete, while other times they won’t, in which case we’ll provide you with a customized rollover form.

Step 3
Once the rollover or transfer forms are submitted, it will generally take anywhere from 1-3 weeks for your current Custodian/Administrator to process the request and issue a check or bank wire.

Step 4
Once the rollover/transfer requests have been processed, your old Custodian/Administrator will generally send a check to you, that will be payable to the Solo 401(k).  You’ll take that check (or those checks) and deposit them directly into the new Solo 401(k)’s bank account. At this point, your setup is complete, and you are ready to invest!