Combining retirement funds of family into 1 solo 401k

[Tony C.]

I'm looking to combine my own as well as my sister's retirement funds to invest in real estate via a solo 401k under my name. She is fine with us combining funds and investing under a single entity belonging to me. This single entity is under only my name. Is this arrangement allowed? If not, what are the alternatives?

[Dmitriy Fomichenko]

@Tony C.

First, self-directed Solo 401k is not for everyone. In order to set one up you need to be self-employed or own a small business without full time employees other than your spouse.

If you qualify for it then this is really great tool which can give you great flexibility when it comes to investing in addition to being awesome tax-sheltering vehicle. 

@Mark Rogers is correct, you can not move your sister's retirement funds into your 401k. However, she can set up her own self-directed retirement account and then be the lender to your Solo 401k (or if you chose to you can buy the investment jointly). 

She is not a "disqualified person" to you which gives you some options based on how much involved (or passive) she would like to be in the deal.