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Options for Rolling 401K Funds from a Former Employer – Time to think about the Solo 401K

There are many instances when an individual will gain access to the 401K retirement funds. Typically, in order for one to gain the ability to access their retirement funds and roll them over to an IRA or another 401K Plan, there must be a plan triggering event. A Plan triggering event is generally occurs if one of the following events occur, (i) the Plan is terminated, (ii) the individual leave the employer adopting the plan, or (iii) the individual reached the age of 59 1/2. If there is a plan triggering event, an individual can generally rollover his or her 401(k) funds to a Traditional IRA or another 401(k) Plan tax-free.

The 401K Rollover

What many individuals are not aware of is that if they are permitted to roll over their 401(k) plan funds, they are not required to roll those funds directly to a Self Directed IRA or Solo 401K Plan.

In the case of a Self Directed IRA, the 401K plan participant is permitted to roll the 401K funds directly to an IRA Passive Custodian tax-free who would then roll the funds directly to a limited liability company owned by the IRA holder (you). The IRA holder would then have control over his or her retirement funds to make real estate and other investments tax-free and without custodian consent. Instead of being stuck investing the rolled over 401(k) plan funds in stocks or mutual funds, rolling the 401K plan funds to a Self Directed IRA Checkbook control structure would unlock a world of investment opportunities and allow one to invest in real estate, precious metals, tax liens and much more tax-free and without custodian consent.

In the case of an individual leaving an employer to start a new business that will have no employees other than the owner, the Solo 401K plan, also known as a Self Directed 401K or individual 401K would provide an attractive vehicle for the rolled over retirement funds. A Solo 401K is perfect for sole proprietors, small businesses and independent contractors such as consultants. A Solo 401K plan offers the same advantages as a Self Directed IRA LLC, but without having to hire a custodian or create an LLC. A Solo 401K Plan offers a self employed business owner the ability to use his or her retirement funds to make almost any type of investment, including real estate, tax liens, private businesses, precious metals, and foreign currency on their own without requiring custodian consent tax-free! In addition, a Solo 401K Plan will allow you to make high contribution limits (up to $54,500) as well as borrow up to $50,000 for any purpose.

If you are leaving a job and have a 401K Plan and have an investment opportunity, such as real estate or a business investment that you would love to make with your 401(k) funds? Then the Self Directed IRA LLC or Solo 401K Plan structures may be your solution. Also, with the Solo 401K Plan, you would be able to use up to $50,000 to start or finance a new business.

To learn more about the benefits of rolling 401K funds into a Self Directed IRA or Solo 401K Plan, please contact a retirement expert at 800-472-0646 or visit

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Posted in 401(k), Solo 401(k)

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