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If you have a solo 401(k) plan, it’s essential to understand the rules surrounding Required Minimum Distributions (RMDs) and rollovers. In this blog post, we’ll address some frequently asked questions to help you navigate these topics.
FAQ:
- Can I roll my RMD amount into an IRA?
- No, once you are subject to RMDs, the RMD amount must be distributed and cannot be rolled over into any retirement account, including an IRA.
- However, you can roll over amounts that exceed the RMD and this transfer will be reportable on a Form 1099-R as a non-taxable direct rollover.
- How will the SECURE Act 2.0 affect RMDs for Roth 401(k) plans starting in 2024?
- Starting in 2024, RMDs will no longer apply to the Roth portion of 401(k) plans, including solo 401(k) plans.
- This means that Roth 401(k) holders, including Roth solo 401(k) holders, will not need to transfer their funds to a Roth IRA to avoid RMDs, as Roth IRAs are also not subject to RMDs before the account holder’s death.
- Can I roll over funds from my Roth IRA to a Roth solo 401(k)?
- No, you cannot roll over funds from a Roth IRA into a Roth solo 401(k).
Conclusion: It’s crucial to stay informed about the rules and regulations surrounding solo 401(k) RMDs and rollovers so you can make the most of your retirement savings!
