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Separate accounts

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Your Solo 401k requires separate accounts per participant and per type, such as:

  • Rollovers
  • Employee contributions
  • Employer contributions
  • Roth

Depending on the number of participants and types of funds within your Solo 401k, you will need to establish that number of account(s), when you are ready to fund them.

For example, if you are the only participant and you will be making an employee/elective deferral contribution and an employer/profit sharing contribution, you will open two separate accounts.

Required by the plan

This requirement is listed on your Summary Plan Description, page 11.

All accounts will be titled in the name of your Solo 401k and using the EIN of your Solo 401k

For checking accounts, you can assign nicknames to distinguish between the accounts. Nicknames should identify the participant and the type of fund within the 401k.

Bank Account Set Up

Accounting for each type

Separate accounts enables easier accounting for each type. You are required to account for each type of fund within your Solo 401k, including the returns on investments made with that type of fund.

You will need to establish a clear accounting method to keep track of each type of fund. The format for tracking and accounting is up to you. It's best to choose a method that you are already familiar with, such as:

  • Excel spreadsheet
  • QuickBooks
  • Quicken

Different types of funds have different rules 

For example, employee/elective deferral contributions cannot be distributed from the plan as an in-service distribution before the participant is age 59 ½. Employer/profit sharing contributions, however, can be distributed as an in-service distribution without age restriction.

Rolling funds out of the Solo 401k

Accounts can be combined for investments

Although there are separate accounts within the 401k, the funds from the separate accounts can be combined for investments.

Using both spouse’s accounts under the same 401k

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