An important feature of the Self Employed 401k plan is the opportunity to consolidate retirement assets via a rollover.Most retirement accounts can be rolled over into a Self Employed 401k and if the rollover is done properly there is no tax liability. The easiest option is to do a direct rollover. With a direct rollover, you authorize your ex-employer’s administrator or current IRA custodian to make the check payable directly to the new custodian for benefit of (FBO) your name. For example, the check would be made payable to the new custodian FBO John Smith. This is sometimes referred to as a trustee-to-trustee transfer and there is no tax withholding, no taxes and no penalties with this option. Your retirement savings will continue to grow tax-deferred. In most situations, a direct rollover makes the most sense since it avoids potential tax liabilities and penalties.

What retirement accounts can be rolled over into a Self Employed 401k?

You can rollover your 401k, 403b, 457 retirement plan from a previous employer. You can transfer a Rollover IRA, Traditional IRA, SEP IRA, Simple IRA, Keogh and Defined Benefit Plan.

You can’t rollover a Roth IRA into a Self Employed Roth 401k. You can rollover a Roth 401k into a Self Employed Roth 401k. Consolidating retirement accounts is particularly important if you would like to use the Self Employed 401k loan provision. Other advantages of consolidating your retirement plans via a rollover into you Self Employed 401k are improved financial organization and ease of monitoring your retirement portfolio.

Learn more about the benefits of the Self Employed 401k

Self Employed 401k Loan - Tax free loans are permitted with a Self Employed 401k plan. Loans up to 50% of the total value of the Self Employed 401k up to a maximum of $50,000 are permitted. IRS rules do not allow loans with IRAs, SEP IRAs, or Keogh (Money Purchase/Profit Sharing Plans).

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Eric Kuniholm Eric Kuniholm, CPWA®
Certified Private Wealth Advisor®
Beacon Capital Management Advisors

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