Rollovers to the Solo 401k plan
Pop Quiz:
A Solo 401(k) cannot accept rollover from which of these retirement accounts?
An IRA |
A Roth IRA |
A Roth 401(k) |
Answer: B. You cannot rollover funds from a Roth IRA to a Solo 401k.
Once the Solo 401k plan is set up, the plan owner can start contributing money right away into the funds. What if you have money in other types of retirement accounts, such as in an IRA or an old 401k? Sense Financial explains about different ways to rollover funds into the Solo 401k plan:
Rollovers to the Solo 401k plan
A Solo 401k can accept rollover from qualified retirement plans, including Traditional-IRAs, SEP-IRA, as well as 401k, Profit-Sharing, Defined-Benefit or any other employer-sponsored plans from past employer. The rollover will be tax-free for a Solo 401k, therefore you can maintain your wealth in this seamless transition. Rollover-funds will go to a pre-tax portion of your Solo 401k. Keep in mind that a Solo 401k cannot accept rollover from a Roth-IRA. Roth-401k however can be rolled-over into Roth Solo 401k. If you wish to do a Roth-conversion, you can do so after completing the rollover.