Rollovers to a Solo 401(k)

There is never a bad time to give reminders on rollovers into a 401(k) plan.  There are many different retirement plans (e.g., IRAs, ex-employer’s 401(k) plans) that one can rollover into their Individual 401(k) plan.  And, when you keep in mind that a PGI SelfDirected one-participant 401(k) plan provides you the option of having a plan that can invest in traditional assets and non-traditional assets from one account….well, one may make the argument that it is wise to move any and all eligible rollover funds into your your plan.  Why set up your Solo 401(k) plan at your local bank when there are so many other options to maximize how you make investments from your Solo 401(k)?!

Rolling Over Funds into the Solo 401(k)

So, what type of retirement funds can be rolled over into a Solo 401(k)?  Well, look at the most recent IRS Rollover Chart.  You may be happy to hear that almost any pre-tax retirement funds can, potentially, be rolled over into a 401(k).    These would include the following:

  • Traditional IRA (which would include a Rollover)
  • SIMPLE IRA (provided the SIMPLE IRA has been in place for at least two years)
  • 401(k) (e.g., your account with a previous employer’s plan)
  • 403(b),
  • 457
  • Keogh
  • Defined Benefit (DB) Plan

Unfortunately, many people still believe that only previous-employer’s 401(k) plan funds can be rolled over into a self-administered 401(k) plan.   Actually, there are more types of funds that can be rolled into a 401(k) than not.  As many of you already know, Roth IRA are not permitted to be rolled over into a 401(k) plan…even if the 401(k) plan has the option for Roth contributions.  Finally, as a general rule, an individual most likely will not be able to rollover funds from an employer’s plan in which they are a current participant.

If you qualify for a 401(k), you can clearly see that there are many types of retirement plans that can be rolled over into a trustee-directed 401(k) plan.  And, when you can also make various types of contributions into the plan, well, it just doesn’t get much better.

As always, the information provided is intended to be educational in nature.  It is not intended, nor should it be interpreted as, any form of tax, legal, financial or investment advice.  You must always consult with your respective professional in all such maters.