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Old 07-13-2013, 09:45 PM   #21
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Originally Posted by wanaberetiree View Post
So here is my case.
I have ~$200K in VG pre-tax IRA account
My combine income this year will be ~$200K.

Plan:

- Open solo-401-K (where? at VG? Fido? Schwab?)
- move all my pre-tax IRA to solo-401-K
- contribute $6K to an after-tax new IRA account
- convert from the after-tax new IRA account to a Roth IRA
and tax liability will be 0.

Is it correct?

Thanks!!!
That looks about right. You need to be self employed to open the solo 401k. Your OP indicated a company 401k, so I think you would have to do the rollover into the company plan. Check with your company to see if that's possible. If not, you may not have a good Roth option at this time.

I have the same IRA problem. I actually could do the solo 401k since I have one. It just didn't seem worth the hassle for the three or four years I could have made contributions. DW doesn't have an IRA so we contribute to a Roth IRA for her.

I used E*TRADE for the solo 401k since they had a Roth 401k option. The costs are OK and the minimums are small there. No problems so far.
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Old 07-14-2013, 10:41 AM   #22
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Join Date: Apr 2010
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Originally Posted by Animorph View Post
That looks about right. You need to be self employed to open the solo 401k. Your OP indicated a company 401k, so I think you would have to do the rollover into the company plan. Check with your company to see if that's possible. If not, you may not have a good Roth option at this time.
Well, I do have a full-time job as well as I contract for somebody else on W-2 and 1099 basis.

Am I self-employed?

What is preferable to roll-over to my company 401-K or solo-401k (I like this one)?
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Old 07-14-2013, 03:10 PM   #23
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
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Quote:
Originally Posted by wanaberetiree View Post
Well, I do have a full-time job as well as I contract for somebody else on W-2 and 1099 basis.

Am I self-employed?

What is preferable to roll-over to my company 401-K or solo-401k (I like this one)?
Don't look to us for reliable answers to detailed questions, do your homework! I'm too lazy to look everything up, and my memory is only getting worse.

My initial concern was that full-time employment with an employer 401k plan available would make you ineligible for an individual 401k. That is not the case. You can do both, though total contributions to both are limited to the same amount you have with just one. However there are some additional ways to add to your individual 401k.

W-2 work is not eligible for solo 401k contributions or creation. W-2 is not self employment. You do need self employment income to open a 401k. I think 1099 should qualify you. Having to file a Schedule C with your taxes would be a good, but not totally sufficient, indicator. You also can't have any full time employees other than a spouse.

Unless your employer has a really nice plan with funds that you like an can't access through your broker (like a stable value fund), your individual 401k will have better investment choices.

So, I think you can indeed do what you want. But do it carefully. You don't want to have to back out of everything a year later.

Think About Going Solo In Your 401(k) - Forbes
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