QUESTION: I have the following questions regarding funding a solo 401k with a 403(b) insurance annuity. I would be funding the Solo 401K by rolling over funds from an insurance annuity. If I understand correctly, I get the Solo 401K set up FIRST, and later instruct the annuity company to roll the funds over into the Solo 401K account. Do I have that right?
ANSWER: As long as you qualify to open a solo 401k, which entails being self-employed with no full-time employees (click here for more information on qualifying for a solo 401k), yes the transfer rules allow for the transfer of a 403b annuity funds to a qualified plan such as a solo 401k plan.
Further, yes the solo 401k would first need to be adopted and the solo 401k bank account or brokerage account setup before the 403b annuity funds can be transferred or directly rolled over to the solo 401k.
Lastly, before funding the solo 401k with annuity proceeds first check with the annuity company as the annuity funds may be invested in a fixed annuity, or a variable annuity that is invested in funds that have distribution restrictions or may be subject to annuity early surrender penalties.
Thanks.
Carl
Irvine, CA
ANSWER: As long as you qualify to open a solo 401k, which entails being self-employed with no full-time employees (click here for more information on qualifying for a solo 401k), yes the transfer rules allow for the transfer of a 403b annuity funds to a qualified plan such as a solo 401k plan.
Further, yes the solo 401k would first need to be adopted and the solo 401k bank account or brokerage account setup before the 403b annuity funds can be transferred or directly rolled over to the solo 401k.
Lastly, before funding the solo 401k with annuity proceeds first check with the annuity company as the annuity funds may be invested in a fixed annuity, or a variable annuity that is invested in funds that have distribution restrictions or may be subject to annuity early surrender penalties.
Thanks.
Carl
Irvine, CA
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