I have a pension plan with my old company (I was laid off in July) that has a lump sum pay out of about $20k. Would it be preferable to keep this in the pension plan or to roll it into a new solo 401k? I think I can get some 1099 income for 2024 which would make it possible to open a solo 401k if there would be some benefits in doing this.
The back story on this situation is that I was going to roll the lump sum into my old company’s 401k, but now Fidelity (actually it’s Fidelity’s Net Benefits who manages the 401k) tells me that this isn’t possible because my status changed with the 401k from being an active employee to being a retired employee.
So the question is whether it is worth the effort to set up the solo 401k? I would likely do this with Fidelity. I’m not crazy about the current pension because I find it difficult to see my basis in the plan even though they have modeling tools.
Also, I do not want to do a rollover into an IRA because we are currently doing Backdoor Roth IRAs for 2024 which would be a problem on Form 8606 and the pro rata rule.
Thank you in advance for your input!
The back story on this situation is that I was going to roll the lump sum into my old company’s 401k, but now Fidelity (actually it’s Fidelity’s Net Benefits who manages the 401k) tells me that this isn’t possible because my status changed with the 401k from being an active employee to being a retired employee.
So the question is whether it is worth the effort to set up the solo 401k? I would likely do this with Fidelity. I’m not crazy about the current pension because I find it difficult to see my basis in the plan even though they have modeling tools.
Also, I do not want to do a rollover into an IRA because we are currently doing Backdoor Roth IRAs for 2024 which would be a problem on Form 8606 and the pro rata rule.
Thank you in advance for your input!
Statistics: Posted by MartinOM28V — Wed Sep 11, 2024 1:17 pm — Replies 5 — Views 184