Good morning,
I have been reviewing
your website content and wanted to fully understand my investing options.
My previous employer's
401k plan is with Fidelity Investments. If I understand your website
correctly,
I should be able to
contract your services to assist me in:
1. Question: With opening/filing for a brokerage account with checkbook
control for
Answer: While we are not associated with Fidelity, it
us our understanding and experience that Fidelity only charges fees in
connection with Solo 401k checkbook control brokerage account when you buy and sell equities, but not when you
process check transactions.
2. Question:
My former employer 401k would just be rolled over (internally at
Fidelity)? How long will this take?
Answer: Yes your former employer 401k would be rolled
over after you open Solo 401k brokerage account with checkbook control at
fidelity. Our experience has been that Fidelity will generally take phone
instructions over the phone to process transfer of former employer 401k to Solo
401k and process the transfer in 2 to 3 days.
3. Question: With
this new Solo 401k trust account, I can invest in real estate, real estate
liens, real estate tax sales, etc.?
Answer: Unlike most Solo 401k providers, our IRS approved Solo 401k allows for
investing in alternative investments such as real estate (Solo 401k Real Estate), whether foreign or domestic, real estate liens, real estate tax sales,
promissory notes, precious metals Solo 401k, private shares, etc., in addition
to equities and life insurance.
4. Question: I understand the limits that I can deposit;
however am I limited to only the funds I earn from my real estate investments
and consulting business, or can I invest funds from my employment as well?
I wish for my wife to be part of this account. We have no
employees. However we may have our sons help manage the account part
time, will they be eligible as well?
Answer: You need to determine if you qualify to open Solo 401k. The IRS requirement for
qualifying for a Solo 401k is the presence of self-employment compensation and
you cannot have full-time employees besides the business owner and his or her
spouse, as Solo 401k is for maximum of two (2) participants—both business
partners or business owner and his or her spouse. As such, your sons or daughters
would not be eligible to contribute to Solo 401k nor can they or any other employees work full time for your business as it would result in only having option to open a traditional 401k--one that would have to be offered to common-law employees. You can learn more about type
of self-employment activity that qualifies as self employment income for Solo
401k qualification and contributions purposes by reading following page from our website titled
Solo 401k Self-Employment Compensation.
http://www.mysolo401k.net/Self-employment-Compensation-for-Self-Directed-Solo-401k-or-Self-Directed-401k.html
http://www.mysolo401k.net/Self-employment-Compensation-for-Self-Directed-Solo-401k-or-Self-Directed-401k.html
5. Question:
Does fidelity allow me to process Solo 401k loan of up to 50% of my solo
401k balance, against that balance? Do you know their terms?
Answer: First, it’s important to clarify that under
this arrangement, that is, where Fidelity is only providing the brokerage
account service for your Solo 401k, Fidelity has no other responsibilities with
respect to administering the Solo 401k. In other words, you, the business owner,
will serve as trustee of the Solo 401k, and thus be responsible for
administering the Solo 401k loan (i.e., making sure that Solo 401k loan
payments are made timely and in accordance with the Solo 401k loan agreement and payment schedule). Simply stated,
Fidelity would not be your Solo 401k provider and thus have no administration responsibilities.
6. Question: I understand that NASB lends non-recourse loans, will I be
able to borrow from them with funds from this Solo 401k account?
Answer: Yes the Solo 401k that we offer allows for non-recourse Solo 401k loan. You can
find out more about non-recourse loan by reading our blog page:
7. Question: My
account with Fidelity is a traditional 401k. Will I be able to transfer
the funds, paying the taxes to a Solo Roth 401k, is that available and does that make sense?
Answer: You would first need to transfer your former
employer 401k to your new Solo 401k and then process an in-plan Solo 401k Roth
Rollover. You can find out more about Roth Solo 401k conversion by visiting our
blogs:
8. Question:
Based on what I've stated above, does Fidelity still stand your test for
me to deposit my account. In other words, would any Fidelity term
restrict my flexibility to invest my Solo 401k in non-traditional investments
such as real estate and precious metals?
Answer: As detailed above, Fidelity is only providing
brokerage account for your Solo 401k, not the Solo 401k trust documents, which we would
provide and allow for investing in alternative investments as mentioned
above.
I am anxious to make a
decision, but still need some answers.
Thank you so much for
your time.
CB
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