The Roth 401k rules including the Roth solo 401k rules require a triggering event such as being age 59 1/2 or older in order to transfer Roth solo 401k funds in the 401k plan to a Roth IRA. Don’t confuse the voluntary after-tax solo 401k rules where you can convert those funds to a Roth IRA directly. The distinction is that moving funds from a Roth solo 401k to a Roth IRA is considered a direct rollover whereas moving funds from the voluntary after-tax solo 401k to the Roth IRA is considered a conversion.
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4 Comments
According to this source:
Tou must generally be separated from your employer to roll your 401k into a Roth IRA. However, some employers do permit an in-service rollover, where you can do the rollover while still employed. It’s permitted by the IRS, but not all employers participate.
https://www.goodfinancialcents.com/can-you-roth-ira-rollover-rules-from-401k/
Are they wrong?
Yes, pre tax 401k funds that were transferred from a former employer 401k to the pre tax solo 401k may be converted to a Roth Solo 401k or to a Roth IRA.
https://www.mysolo401k.net/items-to-consider-if-you-plan-to-process-a-self-directed-roth-solo-401k-pretax-in-plan-conversion-in-2023/
https://www.mysolo401k.net/2-year-5-year-self-directed-solo-401k-access-to-profit-sharing-rules-for-distribution-or-conversion-to-a-roth-ira/
It seems it’s also possible to do in-service distributions of after-tax contributions (looking at the 2nd question):
https://www.kitces.com/blog/intra-plan-conversions-to-a-roth-401k-and-converting-in-service-distributions-from-a-401k-plan-to-a-roth-ira/
Would it then be possible to rollover the our after-tax 401k acct into a Roth IRA instead of converting to a Roth 401k?
Yes, as voluntary after-tax contributions may be converted to the Roth solo 401k or to the Roth IRA. See the following:
https://www.mysolo401k.net/after-tax-to-roth-solo-401k-in-plan-conversion-form/
https://www.mysolo401k.net/after-tax-solo-401k-to-roth-ira-conversion-form/