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Vanguard SEP IRA to Fidelity Self Employed 401k (the process)

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  • Vanguard SEP IRA to Fidelity Self Employed 401k (the process)

    For anyone that that has set up a SEP IRA at Vanguard but now wants to utilize a backdoor roth you will find that Vanguard does not have a standard plan to enable a rollover into a solo 401k.  You can use a custom solo 401k at Vanguard if you jump through a few hoops.   Fidelity will however allow a rollover into a solo 401k without any additional expenditures.

    Below are the general steps for moving from a Vanguard SEP IRA to Fidelity Self Employed 401k.  I just completed this process.  It wasn't hard and the Fidelity customer service was good.  I wish I'd have known about backdoor Roth contributions prior to starting my SEP plan originally.  Be prepared for at least one person to ask you why you are doing this.  I guess there are not a lot of people that want to max so much space out.

    1. Open an account. (I had a prior employer with Fidelity so no new account for me).

    2. Setup individual 401k at Fidelity. This will eventually show up as a Profit Sharing Keogh. (give it a week, probably just a couple days)

    3. Call Fidelity to set up your rollover.  Fidelity will want to move it to a Rollover IRA first.  If you are holding admiral shares you will need to move your funds to cash for the rollover as you cannot hold the admiral shares in a Fidelity account. (started process on a Thursday, money moved 4 days later)

    4. After the money arrives at Fidelity you must then roll the money from your rollover IRA to your individual 401k (the form).  I dropped it off at an actual Fidelity Investment center however you can mail it after a medallion signature if you are not close to a Fidelity branch.  As crazy as it may be, my money was mailed by check from Fidelity to Fidelity to be deposited with my PLLC's plan.  I kept everything in cash to stay simple since I already needed to eliminate my admiral shares. (an additional few days of waiting)


    Anyone else have a similar experience or comments on the path it took me?

  • #2
    Thanks for the write up - my fiancee may need to the same thing in the near future


    • #3
      Might be good to mention the "why" behind this. I don't think Vanguard's individual 401(k) allows for a rollover, even of a Vanguard SEP-IRA.
      Helping those who wear the white coat get a fair shake on Wall Street since 2011