I need some answers regarding solo 401K

[Harvey Corsino]

How to apply for a self directed 401k? Do I need to quit my job to roll over my 401k? Do I need to have my own business to apply for it? What are the advantages (benefits) vs the standard 401k.  Thanks!

[Brian Eastman]

@Harvey Corsino

A Solo 401k is a simplified version of a 401k designed for owner only businesses.  You would need to be self-employed with no full time employees in order to establish such a plan.

You would need to terminate employment with your current employer in order to be able to roll those funds to an IRA or 401k of your choosing, unless you are already over age 59 1/2, in which case you will have that flexibility to move funds while still employed.

Solo 401k plans are offered via brokerages and in a self-directed format.  There is no great benefit of a brokerage Solo 401k vs an employer 401k other than perhaps a few more conventional investing choices and the ability to make contributions from your self-employment.

A self-directed Solo 401k would also give you the flexibility to invest in non-traditional assets such as real estate.

If you do not qualify for the Solo 401k, there are self-directed IRA based plans you should qualify for, but as noted above, that might all be moot if you cannot move your current 401k funds.