Solo 401k age 55 10% exemption question
I have a 401k at my old employer that has both Pre-Tax and Roth money in it. I am 53 and just separated from service from the old employer.
Question 1:
If I establish a solo 401k and roll the money from the old 401k into there, would my age 55 exception be valid under the new plan if, for example, I retired at age 57. I have read somewhere that the age 55 exception does not apply to a Solo 401k but not sure if the source was accurate.
Question 2:
My new company might establish a regular 401k plan in the near future. I do not want to leave the money in my old employer’s plan while I wait, though. If I roll the old 401k into an IRA and a Roth IRA, and then later roll the money out of the IRAs into the 401k plan, would my age 55 exception still apply?
Thanks in Advance.
Permalink Submitted by John Peterson on Thu, 2021-09-16 19:23
1. The age 55 exception probably can’t apply to a solo K because how do you “separate from service” from yourself.2. Yes
Permalink Submitted by William Tuttle on Thu, 2021-09-16 19:59
2. The age 55 exception only applies to an employer plan you separate from >= age 55. You could rollover to a traditional IRA and then roll back pre-tax and only pre-tax traditional balances to an employer’s 401k that accepts such rollovers. However, a rollover from a 401k to a Roth IRA is irrevocable. A Roth IRA can only be rolled over to another Roth IRA.