Author Topic: Solo 401k - with in-plan roth rollovers  (Read 1082 times)

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  • 5 O'Clock Shadow
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Solo 401k - with in-plan roth rollovers
« on: November 11, 2014, 03:50:17 PM »
I'm considering opening a solo 401k account and max out on the contributions between my wife and me (about 52k). We are in a high tax bracket right now, but if we retire in 5 years, we will potentially be in a much lower tax bracket. I have been reading about in-plan roth conversion options in 401k plans, that let you designate some of the money into a roth account within the plan and pay taxes on that. Ideally, after 5 years, it will be beneficial to transfer about 50k each year and just pay taxes on that until all of it is moved over to the roth account.

This is the problem - I called Vanguard, Fidelity & TD Ameritrade so far and none of them offer this in-plan roth conversion within their solo 401k plans. I think this is because this feature is newly introduced in 2013 and there is not much demand. Do you know any company that offers this option in their solo 401k plan?

If not, what other options do I have? Assuming that my tax bracket will be lower after we retire, how can I convert the money from this traditional 401k account into a roth account without paying significant taxes?

These are links that describe what I'm talking about.

http://www.irs.gov/pub/irs-tege/forum13_roth_conv_opps.pdf

http://www.irs.gov/pub/irs-utl/2013_NTF_Roth_Curveballs.pdf

Thanks in advance for any help and suggestions.