Solo401k with both Roth and PreTax funds - Possible? and How?

[David Chance]

* I hope this is not a double post, thought I had this posted but it isn't showing up.
Hi,

Just checking to see if anyone else has this situation and how they are handling it.

I have a solo401k setup with checkwriting with Fidelity and I have rolled over an old pre-tax 401k into it several months ago.

Recently I have changed jobs and now the 401k from this last company is now able to be rolled over to this solo401k. The catch is that in this old 401k it is a combined pretax and roth... roughly a 50%-50% split of each.

I've been told by Fidelity that I can rollover the whole thing into my non-prototype account (solo401k) which currently is only 100% pretax funds, however it would be up to me to keep detailed records on which percentage is roth and which is pre-tax.

Is anyone else having this issue and how is it being handled?  Don't wanna get into trouble down the road.

I considered opening a separate account for the 'Roth' only funds within the solo401k, and Fidelity said i couldn't do that. (if I understood correctly).

I've been reviewing my plan documents and I think it allows it, but it's hard for me to decipher the 'legalese'.

Let me know what you think.

[Dmitriy Fomichenko]

David,

I strongly recommend that you keep your Roth funds in a separate account from your pre-tax rollovers. If you have a truly self-directed Solo 401k you can have as many accounts as you need. This will make accounting very easy, otherwise it could be accounting nightmare unless you have really good software in place for tracking. 

Regarding the comments from Fidelity, they can't tell you what to do or limit the number of accounts you open for your 401k. They are simply holding your 401k funds, they are not the custodian of the funds. As plan trustee and administrator you have that responsibility. If they are giving you hard time you should consider other banking options. We have been recommending Solera bank to our clients, they have excellent system in place to assist self-directed clients and have a division in the bank setup specifically for that. Reach out to Kreighton Reed, bank's VP who can personally assist you with your Solo 401k banking needs:

https://www.biggerpockets.com/users/Kreighton