Leaving company - setup solo 401k?

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Topic Author
arsenalfan
Posts: 774
Joined: Mon Dec 09, 2013 12:26 am

Leaving company - setup solo 401k?

Post by arsenalfan » Sun Dec 01, 2019 4:52 pm

Leaving company, and have company 401k and roth 401k holdings at Fidelity. Also have individual roth IRA at fidelity for my annual backdoor Roth.

I'd like to sever ties from the company entirely, but don't want an IRA, and don't want to roll into my new company's 401k. At some point in the future I envision being entirely 1099 income/having an individual 401k.

2 questions:
1. Can I roll the company Roth 401k into my individual Roth IRA?
2. Can I make an individual solo 401k at Fidelity, and roll my company 401k into that? Will Fido permit that, even if I won't be adding to that individual 401k for many years/possibly never?

Thanks for advice
Last edited by arsenalfan on Sun Dec 01, 2019 7:45 pm, edited 2 times in total.

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Duckie
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Location: California Bay Area

Re: Leaving company - setup solo 401k?

Post by Duckie » Sun Dec 01, 2019 6:53 pm

arsenalfan wrote:Leaving company, and have company 401k and roth 401k holdings at Fidelity. Also have individual roth 401k at fidelity for my annual backdoor Roth.

I'd like to sever ties from the company entirely, but don't want an IRA, and don't want to roll into my new company's 401k. At some point in the future I envision being entirely 1099 income/having an individual 401k.

2 questions:
1. Can I roll the company Roth 401k into my individual Roth 401k?
2. Can I make an individual solo 401k at Fidelity, and roll my company 401k into that? Will Fido permit that, even if I won't be adding to that individual 401k for many years/possibly never?
This post is confusing.
  • Do you already have a solo 401k at Fidelity or not? Fidelity does not offer Roth solo 401k plans.
  • Do you already have self-employment income or not? You cannot open a solo 401k without having current self-employment income.
  • When you talk about the backdoor Roth do you mean contributing to a TIRA and converting to a Roth IRA or something else?
  • Why don't you want an IRA? Don't you already have a Roth IRA via the backdoor? Do you mean you don't want a rollover IRA because you need to use the backdoor method?

HomeStretch
Posts: 2894
Joined: Thu Dec 27, 2018 3:06 pm

Re: Leaving company - setup solo 401k?

Post by HomeStretch » Sun Dec 01, 2019 7:06 pm

arsenalfan wrote:
Sun Dec 01, 2019 4:52 pm
Also have individual roth 401k at fidelity for my annual backdoor Roth.
Do you mean you have a Roth IRA at Fidelity?

Assuming the new and old employer 401k plans have good low-cost fund choices, it’s likely easier for now to leave your old 401k where it is or roll it over to your new 401k. If you have self-employment income in the future, if eligible you can at that time open a Solo 401k at a provider that allows rollovers in and rollover your old 401k into the Solo 401k.

It’s far easier to use a good employer 401k plan than a Solo 401k plan.

Topic Author
arsenalfan
Posts: 774
Joined: Mon Dec 09, 2013 12:26 am

Re: Leaving company - setup solo 401k?

Post by arsenalfan » Sun Dec 01, 2019 7:44 pm

Sorry. Will clarify and also do in OP.

1. I have a Roth IRA at Fidelity
2. I don't have self-employment income, now or in the forseeable future.
3. I don't want convert my large 401k to an IRA, because I'd like to continue doing backdoor Roth IRAs.

HomeStretch
Posts: 2894
Joined: Thu Dec 27, 2018 3:06 pm

Re: Leaving company - setup solo 401k?

Post by HomeStretch » Sun Dec 01, 2019 7:51 pm

Based on your latest post, your options are to leave your old 401k where it is or to rollover the pretax balance, if allowed, to your new 401k and the Roth balance to a Roth IRA. Check your old 401k plan document to see if a third option is available which is to take a partial distribution of the Roth 401k balance to roll it over to your Roth IRA.

Spirit Rider
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Joined: Fri Mar 02, 2007 2:39 pm

Re: Leaving company - setup solo 401k?

Post by Spirit Rider » Sun Dec 01, 2019 8:11 pm

Duckie wrote:
Sun Dec 01, 2019 6:53 pm
You cannot open a solo 401k without having current self-employment income.
Under 401(c)(1)(b), a self-employed individual can adopt a 401k with self-employed earned income in the current or any prior year.

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