AboutAllen Expertise Pension questions ONLY. Pension, profit sharing, and 401(k) plan design, installation, administration and actuarial services; rollovers to Individual Retirement Accounts; taxation of retirement plan distributions
Experience Over 35years experience in the pension field
Organizations Various actuarial organizations
Education/Credentials MBA and various professional certifications
Question I recently switched jobs from the federal government (where I participated in the TSP (Thrift Savings Plan) retirement program) to a school that provides a retirement program through TIAA-CREF. The school's matching program is good, but the investment choices through TIAA-CREF are quite limited.
I would like to start a home-based business/sole proprietorship on the side -- am I eligible to start a solo 401(k) for my home business to take advantage of the greater variety of investment opportunities? If so, may I rollover my TSP contributions into the solo 401(k)?
Answer If you are receiving income for your side business and that income is reported to the government on Form 1099, then you can set up a 401k plan for that business. You can then make contributions to the plan for that business. Those contributions can be in addition to the contributions made by you and the school to the TIAA-CREF plan with one exception. The contributions that are characterized as salary deferrals to the school's plan and the contributions that are characterized as salary deferrals to your 401k plan can not exceed $16,500 (or $22,000 if you are 50 or older).
As far as the rollover, I am not familiar enough with the rules rergarding rollovers from TSP. However, if this money can be transferred to the TIAA-CREF plan, then I believe you should be able to transfer to your 401k plan. I would verify this with whoever sets up the 401k plan and get it in writing.
