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Comment by lotsofpulp | Hacker News Reader

Not using Fidelity for HSA and Vanguard/Fidelity for 401k is a sign of bad leadership. I have to assume management is getting paid off some way to subject themselves to an inferior and more expensive custodian.

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> have to assume management is getting paid off some way to subject themselves to an inferior and more expensive custodian

I’ve done a startup that tried to run ADP for payroll. It was a mess.

Lots of startups avoid that problem by using Gusto. And until recently, Gusto integrated better with Guideline than other providers. So that’s what one got. No kickback needed.

(Like, constellation of shitty products users are locked into helped make Larry Ellison the world’s richest man.)

ADP seems to have a half dozen or more discrete variations on their payroll product, each with their own weird quirks. I’ve experienced some that were perfectly adequate. Some of them being trash also seems plausible.

> some of them being trash also seems plausible

I wouldn't call them trash. They're just absurdly powerful tools for moving boatloads of money in infintessimal increments. It's incredibly low-level financial tooling that simply outclasses any organisation without full-time finance and payroll departments.

I recently had to select a 401(k) plan for our small startup. For a startup, the _employee_ fees was significantly better on Guideline (0.15 - 0.3%) than Fidelity (0.5% + $100 bookkeeping fee). The _employer_ fees were slightly more expensive with Guideline ($1,778 on Enterprise plan for Guideline vs $1,200 for Fidelity) but offered more features.

Important for founders in the US to know: you can put up to $70k annually into your 401k using profit sharing, which only some 401k plans offer. Your startup does not need to be making a profit to do 401k profit sharing. Employees may also be able to negotiate this!

I was very happy when Fidelity added HSA. Much better than the 2 previous places I had HSA. Fidelity HSA just works, and is directly investable, including in the very competitive iShares index ETFs.

I wish more startups would find a way to use Fidelity or Vanguard (with access to the very-low-ER index funds).

I never did figure out how to track Guideline 401k in GnuCash satisfactorily. It was complex, when all I wanted was a balance of IVV/ITOT and AGG (or Vanguard equivalents).

And a different startup used Transamerica 401k, which looked like it had been forgotten on one person's desk in the basement of their skyscraper a decade earlier, and I didn't like their funds. As soon as I could rollover to an old Fidelity account, I did so.

Note that unless your start-up is matching, you can set up your own HSA anywhere you like. Very different from an FSA.

> Note that unless your start-up is matching, you can set up your own HSA anywhere you like.

Even if your employer provides an HSA, you can still open a separate HSA anywhere you like (or multiple, if you really wanted to). You just have to make certain that all contributions (from you, your employer(s), and your payroll) sum up under your annual limit at the end of the year (keeping in mind that changing jobs or benefits mid-year can impact your limit for that year).

The slight advantage for employer contributions to HSA are that they avoid payroll tax. You’ll get the employEE part of it back when you file your taxes, so the savings is the 7.5% employER side.

If you’re an senior+ software dev in the US there’s a good chance you’re already over the social security payroll tax cap, and if so you’re really only saving the Medicare tax of 1.45% on up to $8000 for a family plan. It’s not nothing but not worth dealing with a crappy provider to get.

I love the bubble that much of HN is in. In most of the US, most senior+ software developers are not making over $176K. They are working at boring old enterprise companies. (Yes I’ve done a stint at BigTech and I know what comp is like there and have friends that work at Amazon, Netflix, Nvidia and Google).

I’m no longer strictly a software engineer nor do I live in Atlanta any more. But that’s where I spent most of my career. If you look at the well known companies headquartered there like Delta, Coke, Home Depot, GE (large headquarters there), etc.

Very few of their developers are making over $176K. You see the same in most other tier 2 cities where most software developers work in the US.

Hell most of the job postings by YC companies here on HN aren’t offering their developers over $176K.

Having selected a 401k provider for a small (<15 person) company and also for a larger (>100 person) one, I can say that the big names make it prohibitively expensive for small companies to use them. And that expense ultimately comes out of peoples’ retirement funds in the form of fees. They frankly don’t want the business - too much compliance overhead for a small asset pool.

Believe me, I would prefer to have my own 401k at Fidelity too.

I have no dog in this fight, I just know from experience that setting up a 401k for your company is vastly different from setting up a brokerage account, and the reason a lot of small companies end up with off-the-run vendors is because those are the ones that will take the business.

Hey, fresh startup here. We use Gusto and selected Guideline out of the two options presented, mostly because we have a ton of things we're focused on. Always had a feeling it was a scam, but didn't have time to really dig into it (we're also pretty small at the moment)

What's the best way to transition to Fidelity / Vanguard? I assume Fidelity would be better for having a single entity to deal with rather than Fidelity for HSA and Vanguard for 401K?

Call Fidelity and ask them - they'll happily walk you through it!

Yeah, Fidelity customer service regularly beats my private client groups’. They want your money and then for you to be so happy about them that you forget you saved it :P.

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