Table of Content
- Fidelity Solo 401k
- Roth Solo 401k Fidelity
- Why Choose Fidelity Individual 401k?
- What is a Fidelity Solo 401k Plan Document?
- Fidelity Solo 401k Contribution Form
- How to Set up 401k Fidelity?
Many providers let you invest in a 401k plan but fidelity Solo 401k Plan remains the preferred one among the customers. To make it easier for you to invest into this, we have briefly described some of its important aspects including fidelity solo 401k fees, roth solo 401k fidelity, contribution form and plan document. So, even if you are new to it, don’t you worry as this review below is going to make it easier for you to invest in it and help you to know how to set up 401k fidelity.
Exploring options for your retirement plan is the wisest step that you will take for your future self. While there are a myriad of options for this including IRA and Roth IRA; Solo 401k fidelity is often the most recommended one if you want to make higher tax differed savings.
Fidelity Solo 401k
Before we begin talking about the features of a self-employed 401k fidelity plan, it is important to understand some terms about the 401k plan itself to get a better understanding of fidelity individual 401k.
- 401k Retirement Plan– A 401k is a retirement saving plan that lets you make tax differed savings while contributing amount from your paycheck which is also matched by your employer.
- Solo 401k – It gives you the freedom to open a 401 k account even if you are not employed. In this, you get to act as both the employer as the employee which adds to a higher saving amount.
- Fidelity Solo or Self Employed 401k– Since if you are opting for a solo 401k plan, you do not have an employer who is going to contribute to it or do the record-keeping task, you have to choose a provider. While there are many prominent names like Vanguard and Schwab that you can choose from, fidelity unanimously remains the most chosen one because it offers more options to invest in.
Roth Solo 401k Fidelity
Roth Solo 401k fidelity is the same as a standard IRA with a few differences. In Roth IRA you don’t have to pay taxes while withdrawing your saving which have to be paid in a standard IRA. If you have been planning on opening a Roth Solo 401k fidelity, the good news is that it does let you open a solo Roth 401k too. But before opting for one don’t forget to check the plans and the features that it offers as it may not offer some features like loans. However, since it is fidelity, there are other large number of options that you can choose to invest in.
Why Choose Fidelity Individual 401k?
Though there’s no doubt that there are infinite saving options that you can choose from yet a fidelity Individual 401k has the perks that make it the best. Some of these include:
- It lets the owner to self-direct a solo 401k plan into alternative investments.
- Gives chequebook control.
- It comes with the freedom for participant loans (the loans borrowed from solo 401k).
- It can also be used to invest in life insurance of the business owner or his/her beneficiaries.
- Fidelity has a reputation of providing larger investing options.
Once you have chosen the provider, the question ‘how to set up a 401k’ plan with fidelity becomes easier to answer. But however, since you get an option to further choose the plan that you want to invest in within fidelity, don’t forget to check for the following:
Fidelity Solo 401k Fees
This is perhaps the most important aspect that should never be overlooked while setting up for not just fidelity but any 401k solo plan. Although there is no setup cost for a self-employed 401k plan yet there might be other charges applicable to it. So don’t forget to ask about details while opening an account. For example, this may include the annual maintenance fees of $20. Although you cannot avoid these, keep the following keep points in mind while doing this.
- Carefully choose to invest in the funds within the plan that have comparatively lesser expense ratio.
- The fees may range from 0.5% to 2% depending on the plan you choose.
What is a Fidelity Solo 401k Plan Document?
A plan document has complete information on the features of a retirement plan. It offers complete information on how it works, what features it offers for customization and a lot more. Don’t forget to check the plan document for the following:
- Plan types and features
- Solo 401k plan eligibility
- Contributions of the plan
- Annual plan review
Fidelity Solo 401k Contribution Form
You can use the fidelity solo 401k plan contribution form to submit your contribution towards the solo 401 fidelity plan. For this, you need to calculate your contributions and fill the contribution from. This form consists of three fields:
- Employer information
- Contributor information
How to Set up 401k Fidelity?
Though it may sound complicated, quite the opposite of it, a 401k plan is very easy to set up and can be easily done. But for this, you need to take care of the following key points.
- You need an administrator who will take care of some important tasks like maintaining the adoption agreement and files.
- You can also download and print the self-employed 401k plan on your own after reading the adoption agreement carefully.
- Don’t forget to sign and put the date of the adoption agreement. Also, don’t forget to return the original form to Fidelity investments.
- Keep all the documents and records.
- You will have to file the annual tax form 5500. However, this is only necessary until your assets exceed $250,000.