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The solo 401k plan, commonly referred to as self-directed Solo 41k is the retirement plan of choice for self-employed individuals or owner-only businesses including for the features highlighted below:

-The highest contribution limits for any defined contribution plan including up to $57,000 (or even $63,500 if you are 50 or older) for 2020 (for 2021: $58k or $64.5 if you are 50 or older).

-The ability to make pre-tax, Roth, and even Mega Backdoor Roth contributions.

-401k participant loans of up to $50,000

-Invest with checkbook control in real estate, cryptocurrencies, notes, private placements, and other types of alternative investments.

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For over 10 years, My Solo 401k Financial is the leading self-directed solo 401k provider having helped over 8,000 clients take control over their retirement funds by focusing on superior knowledge, expertise, and customer service with over 100+ 5-star verified customer reviews on the Better Business Bureau (BBB)….(read more)

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Self-directed IRA Question Answered – Do 401k/IRA rollovers count towards IRA contribution limits?

When it comes to retirement savings, there are many different types of accounts and rules to be aware of. One common question that often arises is whether 401k/IRA rollovers count towards IRA contribution limits.

The short answer is no, 401k/IRA rollovers do not count towards IRA contribution limits. Rollovers occur when an individual moves funds from a 401k or another IRA into a new IRA account. These rollovers are not considered contributions and therefore do not affect the annual contribution limits set by the IRS.

The IRS sets annual contribution limits for both traditional and Roth IRAs. For 2021, the limit is $6,000 for individuals under the age of 50, and $7,000 for individuals age 50 and older, known as a catch-up contribution. These limits are separate from any rollovers that may occur.

Rollovers are a valuable tool for individuals looking to consolidate their retirement savings or move funds from an employer-sponsored plan to an IRA. They allow individuals to maintain the tax-advantaged status of their retirement funds without affecting their annual contribution limits.

It’s important to note that while rollovers do not count towards contribution limits, there are still rules and limitations to consider. For example, individuals must complete a rollover within 60 days of receiving funds from their previous retirement account in order to avoid taxes and penalties. Additionally, there are restrictions on the types of funds that can be rolled over, such as employer stock and after-tax contributions.

When considering a rollover, individuals should consult with a financial advisor or tax professional to ensure they are following the proper guidelines and taking advantage of any potential tax benefits.

In conclusion, 401k/IRA rollovers do not count towards IRA contribution limits. This means individuals can move funds from one retirement account to another without impacting their ability to contribute annually to an IRA. Rollovers are a useful tool for retirement planning, but it’s important to understand the rules and limitations associated with the process. Consulting with a financial professional can help individuals navigate the rollover process and make informed decisions about their retirement savings.