Because you are under age 59 1/2, specific IRS rules apply in determining if you can take distributions or transfer money out of the solo 401k to an IRA, for example.
Please see the following:
Different distribution rules apply based on contribution types and the Solo 401k participant’s age.
Types of Solo 401k Contributions and Distribution Rules
- After-Tax Contributions and Rollover Contributions. The solo 401k plan participant may withdraw at any time (after completing a distribution form), all or any portion of her account balance attributable to “rollover contributions” and/or “after-tax contributions.”
- Employer Contributions: Employer contributions are subject to more stringent distribution rules and may be distributed upon the solo 401k participant’s severance from employment, death, or disability. In addition, employer contributions may be withdrawn upon the occurrence of any of the following events:
1) The occurrence of a Hardship,
2) The attainment of age 59 ½
3) The employer contributions being withdrawn have been accumulated in the solo 401k plan for at least 2 years; or
4) The participant has participated in the solo 401k plan for at least 5 years.
- Salary Deferrals (employee contributions): Any employee contribution (including any earnings on such amounts) may not be distributed prior to the solo 401k participant’s severance from employment, death, or disability. However, the solo 401k plan permits an in-service distribution of such amounts upon attainment of age 59 ½ or upon a hardship.
Once you are ready to take distributions, we can assist in providing the necessary distribution forms and in issuing the required 1099-R. Please VISIT HERE to read our full distribution page guide.
