I am finally getting around to considering what to do with the 401k I had at a previous employer, now that I’m self employed. That 401k is at Fidelity. I am planning to open a self-employed 401k. So, my question is whether to switch brokerages (i.e. open the self-employed one elsewhere and then roll over to there).
Is Fidelity good or is there a better one you would recommend?
I would suggest opening one at E*trade which also allows incoming rollover, but allows Roth contributions. They also have a number of Vanguard funds that trade commission free and the usual slate of ETFs.
The reason I mention Roth is that Roth solo 401(k) contributions don’t reduce the Qualified Business Income deduction while traditional do, which creates the unusual circumstance of one type of traditional contribution (solo 401(k)) being worse than another (IRA). Traditional solo 401(k) contributions might still be worth it despite the reduced tax savings, but it’s nice to have the option of Roth.
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