The 5-Year Rule and Multiple Plans (e.g., Roth solo 401k & Roth 401k plan)

Those that have multiple Roth 401k plans—for example, both a Roth 401k with a former employer and a Roth solo 401k need to understand the rules surrounding the 5 year Roth 401k distribution period.

  • Each 401k plan will have its own 5-year holding period.
  • The existing holding period can be rolled to a new 401k plan. For example, those that transfer a former employer Roth 401k to a new Roth solo 401k plan can carry over the former employer’s Roth 401k holding period to the new solo 401k plan.
  • However, if you do a 60-day rollover from the former employer 401k to the new solo 401k plan, the existing holding period becomes that of the new plan.


Jim is 61 years old and has a Roth 401k with his former employer, The Home Store. After working for The Home Store from 2006 to 2014, Jim can take a qualified distribution from his Roth 401(k) at The Home Store because that Roth 401(k) account has been held for more than 5 years and Jim is over age 59½.  Then Jim became self-employed and opened a solo 401k for his self-employed business in 2015 that allows for Roth Solo 401k contributions and started making Roth solo 401k contributions in 2016 . However, Jim cannot take a qualified distribution from his Roth solo 401(k) even though he is over 59½.  Reason being, his Roth solo 401(k) account has not been held for 5 years. The time he has accrued in his former employer Roth 401(k) at The Home Store does not affect the time he has in his Roth solo for his self-employed business.

However, there is a way that Jim can take qualified distributions. Jim can process a direct rollover of his former employer Roth 401k with The Home Store to his self-employed Roth solo 401k plan. Therefore, His time in the plan at The Homes Store will also transfer to his self-employed Roth solo 401k. As a result, Jim can take qualified Roth solo 401(k) distributions from his self-employed Roth solo 401k.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>


  • Popular Video

  • ROBS 401k Funding Process

  • Solo 401k Contributions Including Mega

  • Checkbook IRA LLC

  • About MySolo401k

    We help our clients take control of their retirement money. Our products and services provide our clients the freedom to invest their retirement savings in their own business as well as alternative investments such as real estate, private companies, promissory notes, precious metals, tax liens and equities.
    Learn more

    Connect with us

  • We’re here to help.

    Call: 800-489-7571


    8:00 am - 4:00 pm PT

    Why us?