# Set up Roth 401K and convert it to a Roth IRA?

**URL:** <https://discussion.mainstreetbusinesspodcast.com/t/set-up-roth-401k-and-convert-it-to-a-roth-ira/20>\
**Category:** Retirement Accounts and Strategies\
**Created:** [August 22, 2022, 11:01pm UTC](https://discussion.mainstreetbusinesspodcast.com/t/set-up-roth-401k-and-convert-it-to-a-roth-ira/20 "2022-08-22T23:01:47Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![CMS](https://avatars.discourse-cdn.com/v4/letter/c/76d3ee/32.png) [@CMS](https://discussion.mainstreetbusinesspodcast.com/u/CMS)\
**Post date:** [August 22, 2022, 11:01pm UTC](https://discussion.mainstreetbusinesspodcast.com/t/set-up-roth-401k-and-convert-it-to-a-roth-ira/20/1 "2022-08-22T23:01:47Z")

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I turn 72 next year. I have a single member LLC and have contributed to a SEP-IRA for years. I didn’t realize until now that my LLC could set up a solo 401K or solo Roth 401K. I have already filed my taxes for 2021, so my question is for my 2022 taxes.

If I do not contribute to my SEP-IRA for fiscal year 2022, could I establish a solo Roth 401K this year, contribute $27,000 and then immediately roll it into my existing Roth IRA? Am I correct in thinking that because I am older than 59 1/2 the 5-year rule does not apply? My existing Roth IRA was established more than 5 years ago.

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**Author:** ![CMS](https://avatars.discourse-cdn.com/v4/letter/c/76d3ee/32.png) [@CMS](https://discussion.mainstreetbusinesspodcast.com/u/CMS)\
**Post date:** [August 23, 2022, 7:18pm UTC](https://discussion.mainstreetbusinesspodcast.com/t/set-up-roth-401k-and-convert-it-to-a-roth-ira/20/2 "2022-08-23T19:18:31Z")

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Followup to my previous question: Would it be better to set up a solo 401K that allowed after-tax contributions, contributed the maximum pre-tax amount and the maximum after tax amount and then converted the entire amount to my existing Roth IRA? I assume I would have to pay tax on the conversion of the pre-tax contribution – OR – can I set up a 401K plan that allows after-tax contributions without requiring pre-tax contributions? Once my RMDs kick in next year my marginal rate may be higher than it will be this year, which is why I am more interested in after tax contributions for 2022. I don’t want to add to my income by converting an IRA, but I would like to get all of this year’s income that I have to pay tax on anyway into a Roth.