QUESTION: I’m self-employed as a therapist and would like to open a solo 401k and subsequently transfer my former employer 401k consisting of both pretax and Roth 401k contributions. Does your solo 401k allow for incoming Roth 401k transfers?
Truly yours, Michael O. located in Texas
ANSWER: While not all solo 401k providers solo 401k plan documents contain a Roth feature since it is not an IRS requirement but rather up to the solo 401k provider to offer the Roth Solo 401k option, our solo 401k plan documents allow for Roth solo 401k contributions, in-plan conversions (Roth Solo 401k conversion) and accepts transfers in from former employer Roth 401k, Roth 403(b) and Roth 457 plan funds.
The process of transferring a former employer Roth 401k to a Roth Solo 401k is for the most part identical to the process of transferring pretax 401k funds to a solo 401k, the only difference is that a separate bank account tiled in the name of the Solo 401k and labeled with the word “ROTH” immediately after the title is required to satisfy the separate tracking of pretax vs. post tax (Roth) transfers in. Therefore, you would open one solo 401k plan but have two bank accounts to track both solo 401k contribution types.