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Consolidating multiple 403b's to a solo 401k

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  • Consolidating multiple 403b's to a solo 401k

    I am a hospital employed physician and also have ~ 15-20K of 1099 income for medico-legal consulting work which may become more. I have 403b accounts with 2 prior employers (total ~550K). I would like to open a solo 401k to contribute to from my current 1099 income and also rollover my 2 other 403b accounts to this solo 410K. I think this would simplify things, provider more/better investment options, and preserve my ability to do a backdoor Roth. Other than the hassle of setup, is there any downside that I am failing to realize or reasons not to do this?

    Thank you.

  • #2
    • Most 403b plans are not ERISA qualifed just like a one-participant 401k. Most likely a wash on asset protection.
    • The one-participant 401k plan's year end balance > $250K will require annual Form 5500-EZ filing. Not exceptionally difficult, but serious late/failure to file penalties.

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    • #3
      Small clarification to the OP…you have the ability to use the backdoor Roth maneuver regardless of what you do, nothing to preserve. You can:
      • Leave the funds where they are (does not achieve your goal of simplification)
      • Roll 403b’s out to a TIRA (will pay pro-rata taxes on annual conversions from your TIRA to Roth IRA)
      • Roll 403b’s over to your current employer 401k/403b if it accepts rollovers (401k would provide asset protection probably lacking in a 403b)
      • Roll 403b’s into your solo-k per the above discussion
      Welcome to the forum!
      Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        Make sure the company you choose for your solo 401k allows rollovers. Vanguard did not in the past, but changed their policy fairly recently and now allow rollovers into a solo 401k.

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