Stupid question of the day - Simple (k) rollover?

[Webzter]

So, I did some work in the past as a sole proprietor. I set up a simple k at AIM. I want to roll that to my Vanguard IRA. Do I need to go about firing myself or quitting from myself to let me roll my assets over?

Bonus second question. (I'm stupid, but I make up for it by reading slow) I am probably going to be able to hit a self-employment contribution this year as well (I'm an LLC now but it's about the same). If I'm both employed by the man and self-employed, am I allowed to contribute to a SEP IRA or does my salary from 'da man' count against all IRA contribution limits? (I ask because it looks like Vanguard has a SEP IRA but not a SEP 401(k)).

Bonus third question (delivering more per post). Assuming I can't do a SEP IRA, where do you guys like for holding your self-employment 401(k)'s?

Thanks in advance

 

[Martha]

Publication 560 (2006), Retirement Plans for Small Business is the IRS publication for small businesses such as yourself and retirement plans.

You can have a SEP IRA or a solo 401k and also have a 401k or other defined contribution retirement plan through work but there will be limits on what you can contribute. From the above pub 560: If you contribute to a defined contribution plan (defined in chapter 4), annual additions to an account are limited to the lesser of $44,000 or 100% of the participant's compensation. When you figure this limit, you must add your contributions to all defined contribution plans. Because a SEP is considered a defined contribution plan for this limit, your contributions to a SEP must be added to your contributions to other defined contribution plans.

For a nice plain language description of contribution limits when you have multiple plans, I suggest reading this article: Common Questions About Retirement Plans

I tend to favor solo 401ks rather than SEP IRAs for small businesses that don't earn a whole lot of money because you may be able to sock away more money in the solo 401k.

I wonder, but I haven't looked at the issue, if you could roll over your simple 401k into a new solo 401k which you establish for your LLC.

 

[Webzter]

Martha, thanks! That investopedia article helped immensely. And, I just re-checked, my AIM account was set up as a Solo 401(k). So, for this year, I'm limited to contributing the difference between $15,500 and my actual contributions on the employee side and 20% of net profits on the employer side. I understand that I could contribute a lot more on the non-qualified side, but I guess I don't see the point of that at this time.

Thanks again!