Should You Roll Over Your IRA to a Solo 401k?

A solo 401k allows you to invest in your retirement without a group plan. Many people use IRAs to fund their retirement, but, a solo 401k should also be considered. Here are a few things to consider if you are trying to decide whether or not to roll your IRA into a solo 401k.

Investment Options

The investment options that both plans offer are usually quite different. With an IRA, you usually can invest in whatever you want. They have many more options than a solo 401k. Depending on what 401k provider you go with, you will only have a few choices to pick from. If you like to have a lot of options to pick from, then an IRA is definitely for you.

Contribution Limits

Just like a group 401k, you can contribute a lot more money each year with a solo 401k. With a 401k, you can put in up to $16,500 of your salary into the plan. You can also put a matching contribution of up to 25% of the company's revenue into the account. With an IRA, you can only put in $5000 per year.

 

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