You can rollover multiple old and “orphan” retirement plans (e.g. Rollover IRA, SEP-IRA, SIMPLE IRA, Traditional IRA, etc.) into your Solo 401(k). You also have the option to rollover funds in part or full in your old accounts into your Solo 401(k). And, yes, you maintain the same tax-deferred status within the Solo 401(k). The only account type that may not be rolled over into a Solo 401(k) is a Roth IRA.
Find the IRS Rollover Chart here.
Using Rocket Dollar's preferred banking partner, you can open an account for Traditional (pre-tax) dollars and an account for Roth (post-tax) dollars. You can then roll over Traditional IRAs or transfer an old 401(k) from a previous employer.
Where do Traditional and Roth Rollovers go?
- At Rocket Dollar's preferred banking partner, you can open two trust bank accounts: One for Traditional (pre-tax) dollars and one for Roth (after-tax) dollars.
- If you plan on making both Traditional and Roth contributions, you should open both accounts! MAKE SURE to name them correctly, and that you do not commingle Traditional and Roth dollars!
- If you plan on making Roth conversions, you should open a third trust bank account for pre-tax conversions. This is commonly referred to as an "After Tax" account.
- You can open as many or as few checking accounts as you wish for whatever suits your needs. Many customers only open one if they only want to make one type of contribution.
- If you are having a spouse join you as part of your Solo 401(k) plan, keep in mind you will need to double the number of bank accounts. Spousal money cannot commingle. Even though there is one Solo 401(k), spouses are two different taxpayers.