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Maximize Your Retirement Savings With a Solo 401k
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LEARN MORE*Solo 401(k) eligibility and contribution limits depend on IRS rules. Carry does not provide tax advice, consult a tax advisor. Carry Advisors LLC, an SEC-registered investment adviser, provides investment advisory services for discretionary and non-discretionary accounts (e.g., Solo 401(k), IRA, taxable brokerage accounts). Bank and trust accounts are not advised by Carry Advisors. Brokerage accounts are introduced by Global Carry LLC and carried by DriveWealth LLC, both members FINRA/SIPC. Advisory fees may apply and additional disclosures are described in our Form ADV and CRS.
If you’ve left a previous job and now qualify for a Solo 401k, rolling over your old 401k could be a strategic way to boost your retirement savings. A Solo 401k may offer more investment flexibility, potential tax advantages, and higher contribution limits than your former workplace plan.
With a Solo 401k, you generally have direct control over the account, access to a Roth sub-account, and the ability to contribute as both the employee and the employer. This structure could allow for more meaningful contributions, depending on your income and business type.
Rolling over an old 401k is one of the fastest ways to fund a new Solo 401k. The IRS does not impose any dollar limits or taxes on rollovers between similar account types. However, your former plan provider might charge processing or transfer fees, so it’s important to check.
If you’re self-employed and still have funds sitting in an old company 401k, here’s what you need to know about moving that balance into a Solo 401k.
Can You Rollover a Company 401k to a Solo 401k?
Yes, you’re generally allowed to roll over a former employer’s 401k into your Solo 401k. But in most cases, you need to leave the company first. Employers typically don’t permit rollovers from an active 401k plan while you’re still on their payroll.
That’s why rollovers into a Solo 401k usually happen after a job change or transition to self-employment. Once you’re no longer employed, you’re free to move those retirement funds into your new plan.
📌 Also Read: How to rollover an IRA to a Solo 401k
Are There Fees for Rolling Over a 401k to a Solo 401k?
There are no IRS-imposed fees for rollovers, but your former plan provider might charge processing or transfer fees. It’s best to check with your current plan administrator before starting the rollover.
Will I Owe Taxes?
A rollover is generally not taxable if both accounts have the same tax treatment.
✅ Rolling over a traditional 401k into a traditional Solo 401k typically does not trigger taxes.
❌ Rolling over a traditional 401k into a Roth Solo 401k may trigger a taxable event, since Roth accounts are funded with after-tax dollars.
The IRS treats this type of conversion as taxable ordinary income in the year you complete the rollover.
Do I Have to Rollover Everything?
No. You’re not required to roll over the full balance. You can transfer part or all of your existing 401k into your Solo 401k. Some employers may even allow you to leave funds in the old plan after leaving the company, especially if your balance meets minimum thresholds.
That said, managing multiple retirement accounts can complicate tracking and long-term planning.
Can I Rollover Assets or Only Cash?
In most cases, you can roll over cash, existing plan assets, or a combination of both—as long as your new Solo 401k provider can accept those specific investments. Not all providers support in-kind transfers, so be sure to confirm this in advance before initiating the rollover.
Does a 401k Rollover Affect My Contribution Limits?
No, rollovers are considered separate from contributions and do not affect your yearly Solo 401k contribution limits.
How to Rollover a 401k Into a Solo 401k
Rolling over an old 401k into your Solo 401k is usually a straightforward process. Start by contacting your current plan administrator. Let them know you want to initiate a rollover into your Solo 401k and provide the new plan’s account details. Your provider will then begin the transfer either as a direct or indirect rollover.
Direct Rollovers vs. Indirect Rollovers
In most cases, rollovers are processed as direct rollovers, unless you specifically request otherwise.
✅ Direct rollover: The funds move directly from your old 401k plan to your Solo 401k account. You don’t handle the money yourself. No taxes are withheld, and there’s no risk of early withdrawal penalties if the accounts are compatible.
❗ Indirect rollover: The provider sends the money to you instead of your Solo 401k. They are required to withhold 20% of the taxable portion for federal income tax purposes. You must then deposit the entire original amount, including the withheld 20%, into your Solo 401k within 60 days.
If you fail to deposit the full amount on time, the IRS treats the distribution as taxable income. If you’re under age 59½, an additional 10% early withdrawal penalty may also apply.
📝 Tip: Unless you’re prepared to cover the withheld amount and meet the deadline, a direct rollover is typically the simpler and safer route.
Reasons to Rollover a 401k Into a Solo 401k
Moving your old 401k into a Solo 401k can potentially unlock more flexibility, broader investment access, and higher contribution opportunities especially if you’re now self-employed. Here are some key reasons people consider this move:
✅ Access to a Roth account
As of 2025, about 86% of large company 401k plans offer a Roth option, but some smaller plans still don’t. Many Solo 401k providers include a Roth sub-account by default, letting you make after-tax contributions if that suits your tax strategy.
✅ More investment options
Company 401k plans often limit you to a narrow selection of mutual funds. According to 2025 data from Vanguard, most plans offer 17 to 18 core investment options. A Solo 401k typically provides access to a much wider range of investments, including stocks, ETFs, real estate, private equity, and in some cases, private funds. Just note that plan rules still apply, and some assets may be restricted.
✅ Higher contribution potential
With a Solo 401k, you contribute as both the employee and the employer, which increases your combined contribution limit. Depending on your income and business structure, this could allow for larger annual contributions than a company-sponsored plan.
📝 Note: The IRS allows contributions to both a traditional employer 401k and a Solo 401k in the same tax year. If you haven’t left your job yet, check with your plan administrator to see if they permit rollovers from an active plan. Some do, but many restrict rollovers until after employment ends.
Final Thoughts on Rolling Over a 401k Into a Solo 401k
Rolling over a former employer’s 401k into your Solo 401k could give you more flexibility with your investments, additional contribution capacity, and access to both traditional and Roth options. It’s a common step for self-employed individuals who want to consolidate retirement funds and take more control over how those funds are managed.
Just make sure to review the rollover process carefully—especially if you’re considering an indirect rollover, which comes with stricter deadlines and potential tax consequences. Also, confirm any provider fees or limitations that may apply before you begin.
If you’re self-employed and thinking about how to make the most of your existing retirement savings, a Solo 401k rollover might be worth considering.
📌 Want to learn more about Solo 401k rules, contributions, or investment options? Explore our other articles for additional guidance:
Disclaimer:
The Carry Learning Center is operated by The Vibes Company Inc. (“Vibes”) and contains generalized educational content about personal finance topics. While Vibes provides educational content and technology services, all investment advisory services discussed on this website are provided exclusively through its wholly-owned subsidiary, Carry Advisors LLC (“Carry Advisors”), an SEC registered investment adviser. The information contained on the Carry Learning Center should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or engage in a particular investment, accounting, tax or legal strategy. Vibes is not providing tax, legal, accounting, or investment advice. You should consult with qualified tax, legal, accounting, and investment professionals regarding your specific situation.
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