Solo 401k and rollover IRA

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
robiu977
Posts: 78
Joined: Tue May 29, 2007 2:46 pm

Solo 401k and rollover IRA

Post by robiu977 »

Hello, hopefully a quick and straightforward question. My wife has a rollover IRA in VG. She just opened a solo 401k at VG last year. I should have opened a solo 401k that accepts a rollover so will likely move to TD Ameritrade so we can do a backdoor Roth and avoid the pro rata rule. Do you know if I need to close down the current solo 401k as well or can I just move the rollover IRA to TDA (into a solo 401k) and would then have two separate solo 401k's? Hopefully that makes sense, thank you!
User avatar
ICMoney
Posts: 395
Joined: Fri Oct 28, 2016 2:38 pm

Re: Solo 401k and rollover IRA

Post by ICMoney »

Spirit Rider should hopefully be along soon to provide a detailed response... but in the meantime - no, you can't have two separate solo 401ks. TDA (or whichever vendor is taking over the plan) will need to work with you to amend the solo 401(k) plan to change service provider.

I wanted to point you to my post as follows (viewtopic.php?f=1&t=302493&p=4992829#p4992829) - you can just skip to the part where I talk about transferring my solo 401(k) from Vanguard to another vendor. (and you don't have to read the whole thread, just my first post) Vanguard reps gave me terribly wrong information related to the solo 401(k) transfer in my case, but I knew enough thanks to this forum to not go along with what Vanguard said. I want you to go into your own transfer armed with the right information so you don't make a costly mistake. In short, this isn't going to be an easy/quick process in my experience to successfully move your solo 401(k) from Vanguard to another vendor.

Best, ICM
HomeStretch
Posts: 5379
Joined: Thu Dec 27, 2018 3:06 pm

Re: Solo 401k and rollover IRA

Post by HomeStretch »

You need to amend the Solo 401k to TD Ameritrade and then do a direct trustee-to-trustee transfer of plan assets from Vanguard to TD Ameritrade. Then you can rollover the IRA into the Solo 401k.
Spirit Rider
Posts: 13910
Joined: Fri Mar 02, 2007 2:39 pm

Re: Solo 401k and rollover IRA

Post by Spirit Rider »

Ditto
Topic Author
robiu977
Posts: 78
Joined: Tue May 29, 2007 2:46 pm

Re: Solo 401k and rollover IRA

Post by robiu977 »

I just transferred the rollover IRA to TDA from VG but they are having trouble getting her solo 401k from VG. Is it possible for me to just transfer the new TDA solo 401k to the old VG solo 401k account or is it better to still make the VG transfer and then potentially start over with a new VG solo 401k if I decide to go that route? Thanks!
User avatar
Wiggums
Posts: 3110
Joined: Thu Jan 31, 2019 8:02 am

Re: Solo 401k and rollover IRA

Post by Wiggums »

robiu977 wrote: Tue Jan 12, 2021 2:41 pm I just transferred the rollover IRA to TDA from VG but they are having trouble getting her solo 401k from VG. Is it possible for me to just transfer the new TDA solo 401k to the old VG solo 401k account or is it better to still make the VG transfer and then potentially start over with a new VG solo 401k if I decide to go that route? Thanks!
What exactly is the issue moving the solo 401k? Signatures? Amending the plan? Something else?
Topic Author
robiu977
Posts: 78
Joined: Tue May 29, 2007 2:46 pm

Re: Solo 401k and rollover IRA

Post by robiu977 »

Wiggums wrote: Tue Jan 12, 2021 2:49 pm
robiu977 wrote: Tue Jan 12, 2021 2:41 pm I just transferred the rollover IRA to TDA from VG but they are having trouble getting her solo 401k from VG. Is it possible for me to just transfer the new TDA solo 401k to the old VG solo 401k account or is it better to still make the VG transfer and then potentially start over with a new VG solo 401k if I decide to go that route? Thanks!
What exactly is the issue moving the solo 401k? Signatures? Amending the plan? Something else?
They say the account is a Roth IRA for some reason. Would I get into “trouble” if I keep the solo 401k account from VG open and just transfer the TDA money into it?
Spirit Rider
Posts: 13910
Joined: Fri Mar 02, 2007 2:39 pm

Re: Solo 401k and rollover IRA

Post by Spirit Rider »

robiu977 wrote: Tue Jan 12, 2021 3:06 pm They say the account is a Roth IRA for some reason. Would I get into “trouble” if I keep the solo 401k account from VG open and just transfer the TDA money into it?
You need to understand that it is a 401k plan and not just an account(s). The plan itself is an entity with a lifetime.

If/when you moved the plan from Vanguard to TD Ameritrade, by using the amendment section of the TD Ameritrade adoption agreement. The plan has moved from Vanguard to TD Ameritrade. It no longer exists at Vanguard.

The Vanguard assets can only be moved from Vanguard to TD Ameritrade by trustee transfer as part of the change of providers. It is still the same plan, but only at TD Ameritrade and no longer Vanguard. There is no basis for transferring any plan assets back to the now orphaned Vanguard accounts.

Many Bogleheads have changed one-participant 401k providers from Vanguard to E-Trade, Fidelity, Schwab, and TD Ameritrade and vice versa. So I have no idea what is going on.
Post Reply