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Self-Directed Solo 401k FAQ: How do I roll over Roth funds in a former employer plan to my solo 401k?
QUESTION:
We have a 401k that we would like to roll over into the Solo 401k. How do we keep the setup that we already have: Traditional vs. Roth?
RESPONSE:
Great question! One of the top reasons that clients set up accounts with us is the fact that our Solo 401k plan supports Roth Solo 401k funds.
If the Solo 401k owner/participant has both pretax and Roth funds in a former employer plan, the Solo 401k owner/participant can roll over both Pretax funds from the former employer plan as well as Roth funds to the Solo 401k.
In this case, the funds are transferred via two separate checks and we guide our clients through the process to both initiate the transfer as well as open multiple accounts at the bank or brokerage of choice for the Solo 401k (i.e. one account for pre-tax funds and a second account for Roth Solo 401k funds).
The check to transfer the pre-tax funds is then deposited into the pre-tax sub-account and the Roth 401k transfer check is deposited into the Roth Solo 401k sub-account.
