Transferring Retirement Funds to a Solo 401K Plan

May 27th, 2011

The transfer of retirement funds to a Solo 401K plan is done via a tax-free direct rollover. Transferring retirement funds such into a Solo 401K Plan will be beneficial to you in many ways, especially with the help of IRA Financial Group and their expert in-house tax attorneys. There are many benefits to transferring funds to a self directed IRA or Solo 401k plan, including saving money, and checkbook control. Take charge of your retirement funds today!

Transfer retirement funds such as a Traditional IRA, SEP-IRA, SIMPLE IRA, 401 K, 403b, and most other pre-tax retirement plans tax-free from your current custodian to any financial institution or credit union who can serve as your Solo 401K Plan custodian for no fee. The only transfer restriction is that a Roth IRA cannot be rolled into a Solo 401K Plan. Also, a number of Solo 401K Plan documents do not allow after-tax retirement funds to be rolled into a Solo 401K Plan even if it is permitted by law. The reason is that most Solo 401K Plans do not want to impose a heavy administrative burden on the Plan Administrator, which is typically the Plan’s sole participant. In addition, a SIMPLE IRA must be established for at lest two years before funds can be transferred out of it.

The manner in which retirement plans assets are moved into a Solo 401K Plan is called a direct rollover. A direct rollover form would be completed by the Plan participant and signed by the Solo 401K Plan trustee to authorize the current custodian to transfer the retirement funds to the new Solo 401K Plan bank account tax-free.

With a Solo 401K Plan with “checkbook control” you no longer have to pay excessive custodian fees based on account value and transaction fees. Instead, with a “checkbook control” Solo 401K Plan, you can use any local bank or credit union to serve as your custodian. By using a Solo 401K Plan with “checkbook control” you can take advantage of all the benefits of self-directing your retirement assets without incurring excessive custodian fees and custodian created delays.

A Solo 401K plan allows you to eliminate the expense and delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself. As trustee of the Solo 401K Plan, you will be able to write a check or wire money from the 401K bank account to make an investment. The Investment is then made in the name of your Solo 401K account. As trustee and administrator of the Solo 401k Plan, you will have “checkbook control” to make investments on behalf of your Solo 401K Plan.

With a Solo 401K Plan, essentially, you will gain control of your retirement funds and be able to do what you want with them, eliminating any fees you may incur otherwise with a custodian. In addition, you have the flexibility to choose how you invest your retirement funds and complete the investment in a quick and efficient manner.