How can I close my Solo 401(k)?

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BogleFanGal
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Re: How can I close my Solo 401(k)?

Post by BogleFanGal »

This may have been answered in the mega Vanguard/Ascensus thread, but can't find it. If I have both a Traditional and Roth solo 401k, can I just close out the traditional account (to avoid Ascensus transfer/fees), but transfer the ROTH solo401k plan to another firm and fund it there?

I no longer have a need for traditional: would rather not deal with extra paperwork/complication of transferring an empty shell.
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MP123
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Re: How can I close my Solo 401(k)?

Post by MP123 »

BogleFanGal wrote: Sat Jun 01, 2024 5:33 pm If I have both a Traditional and Roth solo 401k, can I just close out the traditional account (to avoid Ascensus transfer/fees), but transfer the ROTH solo401k plan to another firm and fund it there?
If you're over 59.5 you could take a total in-service distribution from the traditional side and roll it into an IRA. Then amend the plan to another provider and transfer just the remaining Roth portion.

If you're under 59.5 there's usually no way to get money out of the plan short of terminating it, which would affect both sides.

Or, are you saying there is already no balance in the traditional?
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BogleFanGal
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Re: How can I close my Solo 401(k)?

Post by BogleFanGal »

MP123 wrote: Sat Jun 01, 2024 6:03 pm
BogleFanGal wrote: Sat Jun 01, 2024 5:33 pm If I have both a Traditional and Roth solo 401k, can I just close out the traditional account (to avoid Ascensus transfer/fees), but transfer the ROTH solo401k plan to another firm and fund it there?
If you're over 59.5 you could take a total in-service distribution from the traditional side and roll it into an IRA. Then amend the plan to another provider and transfer just the remaining Roth portion.

If you're under 59.5 there's usually no way to get money out of the plan short of terminating it, which would affect both sides.

Or, are you saying there is already no balance in the traditional?
Thanks for your quick answer. :beer Only have a small amount left in traditional - and yes, qualified to roll over to IRA. Just wasn't sure if that zero balance traditional acct would still move to asascensus in July and cost me.
RoadRat
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Re: How can I close my Solo 401(k)?

Post by RoadRat »

After closing the 401k, when does Vanguard send the 1099-R.

I closed mine 4/22/24.

Thanks.
EphYeah
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Re: How can I close my Solo 401(k)?

Post by EphYeah »

Hi, I have a 2 participant solo 401k with Vanguard. It's my business but my husband helped out a couple of years. Since he no longer helps and we no longer contribute to his i401k, I was considering rolling over his to a Rollover IRA with Vanguard and then transferring mine to Schwab so that I can keep contributing.

Is this possible? Also, if we did this, could we then do a backdoor Roth with my husband's rollover IRA?

Thank you all! These threads have been really helpful.
HomeStretch
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Re: How can I close my Solo 401(k)?

Post by HomeStretch »

EphYeah wrote: Mon Jun 10, 2024 12:25 pm Hi, I have a 2 participant solo 401k with Vanguard. It's my business but my husband helped out a couple of years. Since he no longer helps and we no longer contribute to his i401k, I was considering rolling over his to a Rollover IRA with Vanguard and then transferring mine to Schwab so that I can keep contributing.

Is this possible? Also, if we did this, could we then do a backdoor Roth with my husband's rollover IRA?

Thank you all! These threads have been really helpful.
For Federal tax purposes, is your business that sponsors the plan a partnership, S-Corp… ?

Are you planning to amend your current plan to a one-person or two-person Solo 401k plan at Schwab?

If your spouse is age 59-1/2+ he is allowed per the Vanguard plan provisions to take an in-service distribution which allow him to rollover his 401k balance to an IRA.
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PaddyMac
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Re: How can I close my Solo 401(k)?

Post by PaddyMac »

Thanks for all these tips. I just filed with EFAST and it only took a couple of minutes.

Note that if you have filed with EFAST before for 2023, you can select "5500 Series Submissions" and "Replicate" the 2023 "current year" filing. That fill in all the contact info and details.

The only thing to watch is that the (6a) "Beginning of Year Balance" will default to the same amount for the beginning of 2023, so take the End of Year balance and move it to the Beginning field. (If you printed your 2023 form, the ending value is on that too.)
Ren
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Re: How can I close my Solo 401(k)?

Post by Ren »

Can someone point me to which part of Vanguard you started the termination process with? I am the plan admin for my wife's Solo 401k and I'm trying to terminate and roll it over into her existing Vanguard rollover IRA. I've tried both the personal investor line and retirement plan line and both point back to each. This is getting exhausting for what I thought would be an easy process.
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PaddyMac
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Re: How can I close my Solo 401(k)?

Post by PaddyMac »

Ren wrote: Thu Jun 13, 2024 10:57 am Can someone point me to which part of Vanguard you started the termination process with? I am the plan admin for my wife's Solo 401k and I'm trying to terminate and roll it over into her existing Vanguard rollover IRA. I've tried both the personal investor line and retirement plan line and both point back to each. This is getting exhausting for what I thought would be an easy process.
I did a 401k to Rollover IRAs a few weeks ago and it was very easy. I did call Vanguard (I think I alled 1-800-284-7245 and click "Small Business" at the prompt). But you don't need to call them as you end up doing it all yourself.
I didn't already have a Rollover IRA so I made a new account first.
Then I went to Forms page
https://personal1.vanguard.com/ngf-next ... bapp/forms
selected "Add or remove money..."
The Reason, when asked, is "Termination", and "Roll over to IRA" for tax-deferred funds, or "Roll over to Roth IRA" for Roth 401k funds.

If you've every withdrawn from the 401k, it's no difference apart from the Reason and where the funds should go.
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PaddyMac
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Re: How can I close my Solo 401(k)?

Post by PaddyMac »

I found the post I made on the other thread about Ascensus and will paste it here in case it's useful:

We had a 401k at Vanguard with a Roth 401k. On Monday I called to ask about rolling over to a Vanguard IRA and Roth IRA, and have to say that the steps are very very easy. The money was transferred by Weds night.

Before you start, make a note of how much money is in your 401k and your Roth 401k as you will be asked for an estimate during this process.

Now click on the Add Account button after you log in on your Dashboard. (On the next page, the link to "rollover your Vanguard 401k account" link was broken for me, but maybe it's something they are trying to set up?)

The agent told me to make 2 New accounts: A Rollover IRA and a Rollover Roth IRA. Should be obvious which options to choose, but select "Termination" as the "reason". The accounts will be opened with $0 balance. Make a note of the Account # for each.

Next, go to Forms
https://personal1.vanguard.com/ngf-next ... bapp/forms

and select the "add or remove money" option, "sell shares", and follow the steps to rollover ALL shares to your 401k to your new Rollover IRA.
If you have a Roth 401k, repeat the "remove money" form and roll ALL over to your new Rollover Roth IRA.

Note that my 401k accounts disappeared after the transition, so be sure to save all your Statements beforehand!
Ren
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Re: How can I close my Solo 401(k)?

Post by Ren »

PaddyMac wrote: Fri Jun 14, 2024 11:43 am I found the post I made on the other thread about Ascensus and will paste it here in case it's useful:

We had a 401k at Vanguard with a Roth 401k. On Monday I called to ask about rolling over to a Vanguard IRA and Roth IRA, and have to say that the steps are very very easy. The money was transferred by Weds night.

Before you start, make a note of how much money is in your 401k and your Roth 401k as you will be asked for an estimate during this process.

Now click on the Add Account button after you log in on your Dashboard. (On the next page, the link to "rollover your Vanguard 401k account" link was broken for me, but maybe it's something they are trying to set up?)

The agent told me to make 2 New accounts: A Rollover IRA and a Rollover Roth IRA. Should be obvious which options to choose, but select "Termination" as the "reason". The accounts will be opened with $0 balance. Make a note of the Account # for each.

Next, go to Forms
https://personal1.vanguard.com/ngf-next ... bapp/forms

and select the "add or remove money" option, "sell shares", and follow the steps to rollover ALL shares to your 401k to your new Rollover IRA.
If you have a Roth 401k, repeat the "remove money" form and roll ALL over to your new Rollover Roth IRA.

Note that my 401k accounts disappeared after the transition, so be sure to save all your Statements beforehand!
Thanks so much! I'm not sure why the agents I talked to were so clueless. It's all done.
RoadRat
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Re: How can I close my Solo 401(k)?

Post by RoadRat »

RoadRat wrote: Mon Jun 03, 2024 9:34 pm After closing the 401k, when does Vanguard send the 1099-R.

I closed mine 4/22/24.

Thanks.
Does anyone know the answer to this?
Will it come at the end of 2024?
Rolsky
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Re: How can I close my Solo 401(k)?

Post by Rolsky »

My solo 401(k) is my last account at Vanguard and I've consolidated everything that I can at Schwab. Is it a lot more difficult to rollover to another firm? I'd like to rollover the traditional into my employer's 401(k) at Empower and roll the roth over to my existing roth IRA at Schwab. Will it be easier to roll them over into Vanguard IRAs and then transfer them out or can I just rollover to where I ultimately want the funds?

Thanks.
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