Rollover to solo-401K

[wanaberetiree]

I am trying to understand what is possible with solo-401K.

I was told by the Schwab rep that in addition to a regular *employee* contribution limits, I will be able to add %20 of my income as a small business owner to it.

Can somebody confirm/deny this?

Also, he told me that I won't be able to do a back rollover from my personal IRA to my solo-401K. Is it true?

Thx

 

[Animorph]

I am trying to understand what is possible with solo-401K.

I was told by the Schwab rep that in addition to a regular *employee* contribution limits, I will be able to add %20 of my income as a small business owner to it.

Can somebody confirm/deny this?

Also, he told me that I won't be able to do a back rollover from my personal IRA to my solo-401K. Is it true?

Thx

The 20% is correct for sole proprietors. It can be 25% in other cases. That's essentially the employer match.

The IRA to Solo 401k may depend on the specifics of your 401k. Mine had plenty of check boxes to allow things like in-service rollovers (other direction) and other stuff. I don't recall if IRA to 401k was an option. Read the fine print to see what you can do. Try a different brokerage if this one doesn't do what you want.

 

[wanaberetiree]

The 20% is correct for sole proprietors. It can be 25% in other cases. That's essentially the employer match.

Is it 20% per person or total from an income?

 

[Animorph]

Is it 20% per person or total from an income?

I think that would be 20% of each individual's compensation. So not 20% of the entire business profit to each person.


This has some info:

https://us.etrade.com/retirement/individual-401k