Small business owners and self-employed individuals face multiple problems every day and the biggest one is the lack of time. It is quite common among these individual to outsource their business and personal finance responsibilities.
If you are a small business owner with a Solo 401k retirement plan, it is equally important to monitor your retirement plan, as it is to contribute. It could be lack of time or limited understanding of the investment landscape out of which, self-employed individuals let their Solo 401k provider handle everything.
Here are five signs that indicate that it is time to reevaluate your investments and hire a new Solo 401k plan provider.
Your Solo 401k Provider doesn’t offer fee disclosures
According to the Department of Labor (DOL), every single retirement plan provider charging more than $1,000 for retirement plan is bound to provide complete fee disclosures. If you never received these disclosures from your retirement plan provider, ask for them. In case the provider denies your request for fee disclosures, you can contact the DOL and fire that provider immediately.
Your retirement plan provider is overcharging for services
It is important that you pay only for the services you receive and that too within a reasonable limit. Service charges may vary depending upon the quality of service. The best way to identify the right fees is to benchmark your current services against the ones provided by the other Solo 401k providers.
You are not satisfied with administration services of your provider
For small business owners with several employees, it is important to devise an optimal retirement strategy for the company and its employees. If your retirement service provider does not help you with the strategy or provides only vague answers, it is time to look for a new provider. A well-qualified retirement plan provider dedicated towards the job would help you avoid critical planning errors and build sufficient retirement savings.
You only hear from your retirement plan provider during quarterly fee collection period
Does it sound surprising? Well, many third party administrators (TPAs) only visit their clients while collecting their quarterly fees. The problem with these TPAs is that they do not keep track of the changes in regulations governing retirement plans and things might go south for the clients. They inform only when something has already gone wrong. It is best to replace such service providers and choose a company that works proactively.
You came to know about multiple errors through an IRS audit
Solo 401k providers that lack the competence to do their job end up with several plan mistakes and unless you conduct an independent plan review, you will hear about them from the IRS only. Such mistakes can cost you thousands of dollars in penalties and taxes. It is all right to make a few mistakes but the provider must take the responsibility for the same. If your provider always has an excuse for his/her mistakes, it is time to hire a new retirement plan provider.
Comments