Rolling amounts over from a Solo 401k to Trad IRA
Summary of User’s Post:
- The main problem reported by the user is whether they can keep their Solo 401k open while transferring an IRA to take advantage of a 3% match offered by RH, and if their contributions for 2024 must remain in the account until tax filing.
- The user learned from a representative that it is not possible to transfer the IRA while keeping the Solo 401k open, as it requires a “triggering event” for withdrawals or rollovers.
- It was advised to consult a qualified tax professional for specific situations regarding retirement accounts.
Here’s the full thread
Is it possible to do this while keeping the Solo 401k open?
I uh, wanted to take advantage of RH’s 3% match, but figured it would be easier to transfer an IRA.
I’ve also contributed amounts for 2024 already. Does that amount have to stay in the account until I file taxes for next year?
Nvm I called in and the rep sent me a link about qualifying events so it’s not possible.
Hi there, @putrid velociraptor love tabasco. Thank you for reaching out to us here. We appreciate your patience as we brought you an answer.
It sounds like you’ve already had the chance to speak with us, but I’ll be happy to cover this further with you. As with standard 401(k) plans, the self-employed 401(k) is intended to help you save money for retirement. It’s important to keep in mind that only if a “triggering event” occurs, you may be able to withdraw or rollover the plan assets.
A “triggering” event includes turning age 59.5, separation from service/terminating your plan, disability, or death. If you are under age 59.5 and are taking a distribution, a 10% early withdrawal penalty from the IRS will apply. A 20% mandatory withholding would also apply to any distribution that is an eligible rollover distribution. Required Minimum Distributions (RMDs) must begin at age 73.
As always, we encourage that you consult with a qualified tax professional if you have questions about your situation. You can learn more about triggering events and withdrawals by visiting the links below.
Understanding the SE 401(k): https://www.fidelity.com/learning-center/personal-finance/retirement/self-employed-401k
SE 401(k) Overview: https://www.fidelity.com/retirement-ira/small-business/self-employed-401k/overview
If we can help with anything else, don’t hesitate to let us know. Enjoy the rest of your day! 🟢
Plan s can still change