5 Things To Look For In A Solo 401k Provider

Solo 401k plans are fantastic plans for the sole proprietor who would otherwise be missing out or gouged when trying to save for retirement. However, they can be tricky to manage so finding a suitable provider is necessary to ensure that this process is as easy as possible.

Author

Eddy Martinez

May 30, 2023

Solo 401k plans are fantastic plans for the sole proprietor who would otherwise be missing out or gouged when trying to save for retirement. However, they can be tricky to manage so finding a suitable provider is necessary to ensure that this process is as easy as possible.

Here are 5 things to look for in a Solo 401k Provider:

  • Costs and Fees

  • Services Offered

  • Approved Investments

  • Recordkeeping Quality

  • Security

Keep reading for five things to look for in a Solo 401k provider so that you can make the best decision for your needs.

5 Things to Look for in a Solo 401k Provider

A solo 401k plan allows people to self-direct their retirement plans and invest in what they see fit. It allows a sole proprietor to invest in numerous assets beyond what is typically available in a standard 401k plan. Finding a quality provider can be difficult! So be sure to look out for a quality provider by keeping in mind a few key points.

Costs and Fees

Some Solo 401k providers hide numerous fees such as maintenance, administrative fees, and even trading commissions within their plans. So, keep an eye out for these fees!

Do keep in mind that it’s normal for the first year or so of a plan to have slightly higher fees due to startup costs, and these fees may change down the line. Always keep an eye on them and if things don’t feel quite right, don’t hesitate to ask for clarification. Worst case is that it’s back to searching for a different provider with fewer of these fees.

Services Offered

Not all Solo 401k providers are the same. Some will have different services that they offer, so be sure to check out everything that they do and compare that with other providers. 

For example, SEPira(k) offers creation and recordkeeping for all their clients’ alternative assets so that they don’t have to do it themselves, unlike with many other providers which essentially make their clients balance their own assets on separate Excel spreadsheets.

Approved Investments

Sometimes a 401k provider only has a small list of investments that they are willing to approve and handle. With a Solo 401k plan, the point is to be able to be self-driven and able to invest in whatever. 

So, if there’s limitations to this, it can cause some issues beyond just being frustrating. Look for a provider that can appropriately handle a wide range of investments.

Recordkeeping Quality

The current best recordkeeping practice is keeping extensive Excel spreadsheets, and most providers have their clients putting in the legwork to hope they’re filling them out correctly. If it isn’t done perfectly, the IRS is going to disqualify everything in the portfolio and bill everything as taxable income. 

Therefore, it’s extremely important to make sure that the recordkeeping is of the highest quality so that nothing can go wrong. Nobody wants a huge tax bill because their Solo 401k provider didn’t have their sheets in order.

Security

Whenever money is involved, there is a risk. Investing itself carries loads of it, as very few things are guaranteed to be worth it in the end. If that wasn’t enough, if things aren’t securely locked down, someone with nefarious intent could take it all away in an instant.

Check for providers who use extensive security measures, backup systems, and other sorts of fail-safe measures just in case the worst were to happen. If they’re not too clear about it, don’t be afraid to ask or to keep looking somewhere else.

Why Choose SEPira(k) as Your Solo 401k Provider?

Quality and secure recordkeeping is important and SEPira(k) has made it their mission to make this as simple and stress free as possible for all their clients with their state-of-the-art platform. It’s stressful enough trying to pick out and plan for the future, clients don’t need to be worrying about what the IRS wants and keeping their investments safe at every turn too. 

With their expert guidance, recordkeeping, top-notch security measures, and flexible options, SEPira(k) allows their clients to choose their own investments from common assets to more unconventional ones.

Some of these include:

  • Mutual Funds

  • Stocks

  • Bonds

  • Real Estate (both residential and commercial)

  • Tax Liens

  • Private Placements

  • Precious Metals

  • Energy Investments

  • Equipment Leasing

  • Foreign Currency

This gives clients a wide portfolio of investment opportunities and helps to keep them securely and efficiently managed without gouging them at every turn.

Conclusion

Nobody wants to be sitting around balancing their assets like a checkbook while worrying about the IRS. This is likely to be the reality for many sole proprietors without any w-2 employees unless they find themselves a quality Solo 401k provider. Thankfully, providers such as SEPira(k) make investing in one of these plans simple while still being secure and self-driven with a wide range of flexible options to choose from.