Administrator vs Broker vs Custodian for a Solo 401(k)?
Their paperwork should help you along.  Schwab is the broker and custodian, you are the administrator.  There's virtually no paperwork after the account is opened, until you hit $250K in value, and then there's one extra IRS form you need to fill out each year.  See One-Participant 401(k) Plans for a good IRS description of form 5500. Disclosure - I use the Schwab Solo 401(k) myself, and the only downsides, in my opinion, the don't offer a Roth flavor, and no loans are permitted. Both of these features would offer flexibility.
Fidelity Investments offers Solo 401(k) plans without any management fees. The plan administrator is typically the employer itself (so, your business, or you as the principal manager). You (as the individual employee) are the participant. I don't know what you mean by 'major'. Do you mean the fund company is a Fidelity or Vanguard, or that the fund is broad, as in an s&P fund?  The problem starts with a question of what your goals are. If you already know the recommended mix for your age/risk, as you stated, you should consider minimizing the expenses, and staying DIY. I am further along, and with 12 year's income saved, a 1% hit would be 12% of a year's pay, I'd be working 1-1/2 months to pay the planner?  In effect, you are betting that a planner will beat whatever metric you consider valid by at least that 1% fee, else you can just do it yourself and be that far ahead of the game.  I've accepted the fact that I won't beat the average (as measured by the S&P) over time, but I'll beat the average investor. By staying in low cost funds (my 401(k) S&P fund charges .05% annual expense) I'll be ahead of the investors paying planner fees, and mutual fund fees on top of that. You don't need to be a CFP to manage your money, but it would help you understand the absurdity of the system. I would at least encrypt the part of the drive you keep forms like that, but not to protect myself from the odd villain who works for the IRS.   Your broker does report your capital gains to the IRS, whether in sales or dividends.   I received a bill last month from the IRS for dividends I forgot to report on my 2013 return. The bill contained a partial duplicate of my 1099-DIV form from the brokerage, and included account numbers and SSN. Therefore it's safe to say IRS employees don't need to hack your laptop in order to get that info. :) As for minimum information, it depends on your broker. Call them and ask; they'll tell you everything you need to know.  Vanguard, for example, has some security questions, among other things. A self-directed IRA could be a good solution for you and all IRAs are qualified IRAs the administrator must allow for alternative assets. However, if you're looking to do the ROBS (Roll Over Business Start-up) system, there are not very many administrators that can facilitate that. There is also a checkbook IRA (aka single member LLC) that more administrators are able to work with, but the rules are different from a ROBS plan. Check with your financial adviser, CPA, tax guru and ask which method would work best for what you're looking to accomplish. "You have a Solo 401(k). You can fund it with cash, or I believe, with shares of your own company. You can't pull in other assets such as the ISOs from another employer. I see why that's desirable, but it's not allowed.  You wrote ""this will mitigate all tax complications with employee stock options.""  But - you can't transfer the ISOs from your job into your Solo 401(k). As littleadv notes, it's self dealing. Once the ISO is exercised there's no hiding the gain into that 401(k)." None of your options seem mutually exclusive.  Ordinarily nothing stops you from participating in your 401(k), opening an IRA, qualifying for your company's pension, and paying off your debts except your ability to pay for all this stuff.  Moreover, you can open an IRA anywhere (scottrade, vanguard, etrade, etc.) and freely invest in vanguard mutual funds as well as those of other companies...you aren't normally locked in to the funds of your IRA provider. Consider a traditional IRA.  To me your marginal tax rate of 25% doesn't seem that great.  If I were in your shoes I would be more likely to contribute to a traditional IRA instead of a Roth.  This will save you taxes today and you can put the extra 25% of $5,500 toward your loans.  Yes, you will be taxed on that money when you retire, but I think it's likely your rate will be lower than 25%.  Moreover, when you are retired you will already own a house and have paid off all your debt, hopefully.  You kind of need money now.  Between your current tax rate and your need for money now, I'd say a traditional makes good sense.  Buy whatever funds you want.  If you want a single, cheap, whole-market fund just buy VTSAX.  You will need a minimum of $10K to get in, so until then you can buy the ETF version, VTI.  Personally I would contribute enough to your 401(k) to get the match and anything else to an IRA (usually they have more and better investment options).  If you max that out, go back to the 401(k). Your investment mix isn't that important.  Recent research into target date funds puts them in a poor light. Since there isn't a good benchmark for a target date fund, the managers tend to buy whatever they feel like and it may not be what you would prefer if you were choosing.  However, the fund you mention has a pretty low expense ratio and the difference between that and your own allocation to an equity index fund or a blend of equity and bond funds is small in expectation.  Plus, you can change your allocation whenever you want. You are not locked in. The investment options you mention are reasonable enough that the difference between portfolios is not critical.  More important is optimizing your taxes and paying off your debt in the right order. Your interest rates matter more than term does. Paying off debt with more debt will help you if the new debt has a lower interest rate and it won't if it has a higher interest rate.  Normally speaking, longer term debt has a higher interest rate.  For that reason shorter term debt, if you can afford it, is generally better.  Be cold and calculating with your debt.  Always pay off highest interest rate debt first and never pay off cheap debt with expensive debt. If the 25 year debt option is lower than all your other interest rates and will allow you to pay off higher interest rate debt faster, it's a good idea.  Otherwise it most likely is not.  Do not make debt decisions for psychological reasons (e.g., simplicity).  Instead, always chose the option that maximizes your ultimate wealth. "I frequently advise to go 401(k) up to the match. With no match, I'm not so sure.  If you are in the 15% bracket, I'd skip the 401(k). Your standard deduction is $5800 this year, do you itemize? I ask because the 15% bracket ends at $34,500, and I don't know if you manage enough deductions to get under that.  But - I'd only pt into the 401(k) what would otherwise be taxed at 25%, no more. Even then only if the 401(k) expenses were pretty reasonable. Will all the hoopla over retirement accounts, we easily forget the beauty of the investment in ETFs long term. You buy the SPY (S&P 500 ETF) and hold it forever. The gains are all deferred until you sell, and then they have a favored rate. You control the timing of the sale with no risk of penalty. The expenses are low, and over time, can make up for the lack of tax deduction (The pretax deposit) vs the 401(k) account. You die and the beneficiaries have a stepped up basis with no tax due (under whatever the limit is that year).  Long term, I'd go with low cost ETFs and pay the mortgage at the minimum payments. Even without itemizing, 4.2% is pretty low compared to the expected return over the next decade in stocks.  I recommend a look at Fairmark to help understand your marginal rate. Your gross doesn't matter as much as that line on 1040 ""taxable income."" This will tell you if you are in the 25% bracket and if so, how deep.  Edit - If one's taxable income, line 43 on your 1040, I believe, puts him into the 15% bracket, there are issues using a pretax 401(k). The priority should be to use a Roth IRA or Roth 401(k). Being so close to that 25% bracket at 26 tells me you will grow, and/o marry into it over time, that's the ideal time to use the pre-tax 401(k) to stay at 15%. i.e. deposit just enough to bring your taxable income right to that line of 15/25%." "There are a lot of unintended consequences of fairly arbitrary IRS guidelines when it comes to 401Ks, they both close and create tons of loopholes and many companies are left to implement their own policy around these laws. Ultimately what you are left with are a lot of random things, interpreted differently by every single company in the country, that aren't directly codified by the IRS or Congress. If you have a choice regarding what brokerage firm manages your 401(k), then just call around. Be sure to ask the pencil pusher on the phone to double check because they might say ""OF COURSE you can get paperless statements it is 2015"" but then when you sign up it becomes ""ooohhh sorry due to recent guidelines this kind of account isn't eligible for paperless statements""" "1 - in most cases, the difference between filing joint or married filing single is close to zero. When there is a difference you're better off filing joint.  2 - The way the W4 works is based on how many allowances you claim. Unfortunately, even in the day of computers, it does not allow for a simple ""well my deduction are $xxx, don't tax that money."" Each allowance is equal to one exemption, same as you get for being you, same as the wife gets, same as each kid. 3 people X $3800 = $11,400 you are telling the employer to take off the top before calculating your tax. She does this by using Circular E and is able to calculate your tax as you request. If one is in the 15% bracket, one more exemption changes the tax withheld by $570. So if you were going to owe $400 in April, one few exemption will have you overpay $170. i.e. in this 15% bracket, each exemption changes annual withholding by that $570.  For most people, running the W4 numbers will get them very close, and only if they are getting back or owing over $500, will they even think of adjusting.  3 - My recently published Last Minute Tax Moves offers a number of interesting ideas to address this. The concept of grouping deductions in odd years is worth noting.  4 - I'm not sure what this means, 2 accounts each worth $5000 should grow at the same rate if invested the same. The time it makes sense to load one person's account first is if they have better matching. You say you are not sure what percent your wife's company matches. You need to change this. For both of your retirement plans you need to know every detail, exact way to maximize matching, expense ratios for the investments you choose, any other fees, etc. Knowledge is power, and all that. In What is an appropriate level of 401k fees or expenses in a typical plan? I go on to preach about how fees can wipe out any tax benefit over time. For any new investor, my first warning is always to understand what you are getting into. If you can't explain it to a friend, you shouldn't be in it.  Edit - you first need to understand what choices are within the accounts. The 4% and 6% are in hindsight, right? These are not fixed returns. You should look at the choices and more heavily fund the account with the better selection. Deposit to her account at least to grab the match.  As far as the longer term goals, see how the house purchase goes. Life has a way of sending you two kids and forcing you to tighten the budget. You may have other ideas in three years. (I have no P2P lending experience, by the way.)  Last - many advise that separate finances are a bad path for a couple. It depends. Jane and I have separate check books, and every paycheck just keep enough to write small checks without worry, most of the money goes to the house account. Whatever works for you is what you should do. We've been happily married for most of the 17 years we've been married." Can't tell you where to go for a good policy, but I can tell you that most brokers make a hefty commission out of your payments for at least a year before you even start funding the tax sheltered investment account that you're trying to buy under the umbrella of life insurance. You'll have to do a lot of homework to hunt down a reputable discount broker or a direct policy purchase from the insurance company. Life insurance requires insurable need. The description is vague enough, that you can probably still get the account despite being a single male with no apparent heirs to benefit, but it raises the question of why you are buying the insurance. Whole life policies require you to maintain a certain ratio of investment to premium payment and you will likely never be able access all of the money in the account for your own personal usage. Compare several policies from several brokers and companies. Read all the critical sources you can about the pitfalls and dangers of commissions, fees and taxes eating the benefits of your account. Verify that the insurance company you buy the policy from is financially stable after the market crash. You are paying a commission to pool your money into their investment fund, and if your insurer goes under, you'll have to get a portion of your money (possibly only the principle) back from the state insurance commissioner. Some companies sold pretty generous policies during the bubble and have cut their offerings way down without fixing their marketing literature and rosy promises.  Finally, let us know what you find. It never hurts to see hard numbers and to run multiple eyes over the legalese in these contracts. OK, so first of all, employers don't set up IRAs.  IRA stands for Individual Retirement Account.  You can set up a personal IRA for yourself, but not for employees.  If that is what you're after, then just set one up for yourself - no special rules there for self employment. As far as setting up a 401(k), I'd suggest checking with benefits management companies.  If you're small, you probably don't have an HR department, so managing a 401(k) yourself would likely be overly burdensome.  Outsourcing this to a company which handles HR for you (maybe running payroll, etc. also), would be the best option.  Barring that, I'd try calling a large financial institution (Schwab, Fidelity, etc.) for clear guidance. "Your employment status is not 100% clear from the question.  Normally, consultants are sole-proprietors or LLC's and are paid with 1099's.  They take care of their own taxes, often with schedule C, and they sometimes can but generally do not use ""employer"" company 401(k).  If this is your situation, you can contact any provider you want and set up your own solo 401(k), which will have great investment options and no fees.  I do this, through Fidelity. If you are paid with a W2, you are not a consultant.  You are an employee and must use your employer's 401(k). Figure out what you are. If you are a consultant, open a solo 401(k) at the provider of your choice.  Make sure beforehand that they allow incoming rollovers.  Roll all of your previous 401(k)s and IRA's into it. When you have moved your 401(k) to a better provider, you won't be paying any extra fees, but you will not recoup any fees your original provider charged. I'm not sure why you mention a Roth IRA.  If you try to roll your 401(k) into a Roth instead of a traditional IRA or 401(k), be aware that you will be taxed on everything you roll. ---- Edit: a little info about IRA's in response to your comment ---- Tax advantaged retirement accounts come in two flavors: one is managed by your company and the money is taken out of your paycheck.  This is usually a 401(k) or 403(b).  You can contribute up to $18K per year and your company can also contribute to it.  The other flavor is an IRA.  You can contribute $5,500 per year to this for you and $5,500 for your spouse.  These are outside of your company and you make the deposits yourself.  You choose your own provider, so competition has driven prices way down.  You can have both a 401(k) and an IRA and contribute the max to both (though at high incomes you lose the ability to deduct IRA contributions). These accounts are tax advantaged because you only pay taxes once.  With a regular brokerage account, you pay income tax in the year in which you earn money, then you pay tax every year on dividends and any capital gains that have been realized by selling.  There are two types of tax-advantaged accounts: Traditional IRA or Traditional 401(k).  You do not pay income tax on this money in the year you earn it, nor do you pay capital gains tax.  Instead you pay tax only in the year in which you take the money out (in retirement). Roth IRA or Roth 401(k).  You do pay income tax on money on this money in the year in which you earn it.  But then you don't pay tax on any gains or withdrawals ever again. When you leave your job (and sometimes at other times) you can move your money out of a 401(k) into your IRA, where you can do a better job managing it.  You can also move money from your IRA into a 401(k) if your 401(k) provider will allow you to. Whether traditional or Roth is better depends on your tax rate now and your tax rate at retirement.  However, if you choose to move money from a traditional account into a Roth account, you must pay tax on it in that year as if it was income because traditional and Roth accounts are taxed at different times.  For that reason, if you are just trying to move money out of your 401(k) to save on fees, the logical place to put it is in a traditional IRA. Moving money from a traditional to a Roth may make sense, for example, if your tax rate is temporarily low this year, but that would be a separate decision from the one you are looking at. You can always roll your traditional IRA into a Roth later if that does become the case.  Otherwise, there's no reason to think your traditional 401(k) should be rolled into a Roth IRA according to what you have described." The S&P top 5 - 401(k) usually comply with the DOL's suggestion to offer at least three distinct investment options with substantially different risk/return objectives. Typically a short term bond fund. Short term is a year or less and it will rarely have a negative year. A large cap fund, often the S&P index. A balanced fund, offering a mix. Last, the company's stock. This is a great way to put all your eggs in one basket, and when the company goes under, you have no job and no savings.  My concern about your Microsoft remark is that you might not have the choice to manage you funds with such granularity. Will you get out of the S&P fund because you think this one stock or even one sector of the S&P is overvalued? And buy into what? The bond fund? If you have the skill to choose individual stocks, and the 401(k) doesn't offer a brokerage window (to trade on your own) then just invest your money outside the 401(k). But. If they offer a matching deposit, don't ignore that. In the case of an investment strategy, if you don't retain custodianship over your funds, or at least determine who is the custodian, then walk away.  You should be able to get accurate account statements from a trustworthy third party at all times. No, sorry. A change of 401(k) administrator is not an out, otherwise many would flee a bad plan. I'd suggest you only deposit up to the match, but use an IRA if you'd like to save more. A plan with high fees can easily negate the tax benefits and then some.