I want to Open Self-Directed Solo 401k

I am interested in using your service to open Solo 401k plan with check writing privileges.    I used your online Solo 401k contribution calculator to calculate maximum Solo contributions for a self-employed individual such as me. The contribution is $32,320.20.  Of this I have a Chase savings account (approx. $10,000.00)which was opened in July of 2012  to be held in trust as well as a 6 month CD for (approx. $10,000.00 also opened in July) with my local bank.  As discussed, a Fidelity brokerage account would be opened for my self-directed Solo 401k and I would deposit the balance of the dollars to the money market/checking account. If the checking account requires a minimum balance, please advice.

As a self-employed caregiver, I receive checks from Easter Seals. What information do you need regarding the Savings account and the CD?


First, you need to ultimately confirm with your accountant or tax preparer as to whether or not the income that you are receiving from Easter Seals is being taxed as earned income or not. Reason being, in order to open a Solo 401k, you have to generate income from self-employment income. For some reason I associate Easter Seals income with charitable giving not self-employment income; therefore, you need to confirm with your accountant that you are in fact generating self-employment income.

Second, you can only contribute the funds in your Chase and local bank to your Solo 401k, assuming you qualify to open solo 401k, if they originated from self-employment income in 2012 and if they don’t exceed the annual, maximum Solo 401k contribution limit for 2012 of $50,000 plus additional catch-up amount of $5,500 if you are age 50 or older.  On the other hand, if the funds in Chase and local bank account are held in an IRA, you can transfer the IRA to your newSolo 401k, but again, only if you qualify to open 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 >>


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