Big news in the Solo 401(k) world! Vanguard is closing their Solo 401(k) and will exit the Solo 401(k) business in July.
On April 19th I recorded a YouTube video with my initial reaction.
On April 20th I posted a lengthy X thread and a LinkedIn post with additional thoughts.
UPDATE July 22, 2024: The Vanguard to Ascensus transfer is now complete. For those with a new Ascensus account, it’s vitally important to file a new beneficiary designation form!
UPDATE October 12, 2024 The Ascensus Solo 401(k) contribution portal is not intuitive. I walk through tips for new Ascensus Solo 401(k) owners in this YouTube video.
My Solo 401(k) Book
If you’re interested in the Solo 401(k), I wrote a book about it.
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Thanks for sharing this news. I started a solo 401k at Fidelity last year instead of Vanguard because I already had accounts there, but otherwise would have picked Vanguard after hearing so much positive from JL Collins. No complaints with Fidelity as they do a good job and index funds are low cost.
Thank you for your video and blog post. The letter from Vangard came as a shock. I am planning on transferring my Vanguard Solo 401(k) to Schwab or E-Trade. I checked with Fidelity, but they do not offer a Roth option, which I currently have funded. What do I put for the plan sequence number when I set up the account at the new brokerage firm? My current plan sequence number is 001. If the new brokerage firm is governed by a different plan document, does that force me to use a new sequence number? In that case, I would have to file two returns with the IRS in 2025. I have not come across anyone yet who understands this issue about the sequence number. Can you help? Another issue is finding a brokerage that is set up to receive transfer funds electronically. It’s my understanding that Schwab can do this. I have not checked with E-Trade, yet. Do you know of any other brokerage firms anyone knows that can do this?
I am planning on transferring my Vanguard Solo 401(k) to Schwab or E-Trade. I checked with Fidelity, but they do not offer a Roth option, which I currently have funded. What should I put for the plan sequence number when I set up the account at the new brokerage firm? My current plan sequence number is 001. If the new brokerage firm is governed by a different plan document, does that trigger a new sequence number? In that case, I assume I would have to file two returns with the IRS for 2024. I have not come across anyone yet who understands and can knowledgeably answer the issue about the sequence number. Another issue is finding a brokerage that is set up to receive transfer funds electronically. It’s my understanding that Schwab can do this. I have not checked with E-Trade, yet. Do you know of any other brokerage firms that can do this?
Thanks for reading and commenting. I appreciate it. Everyone is still sorting things out on this. It’s good to start digging in on all of this now — don’t wait until July. I’m very much in learning mode on this as of late April, as I suspect are many other practitioners.