Contributions

Does my current employer’s 401k plan have any effect on my Solo 401k plan, such as the contribution limit?

Answer:

Please see our Contribution Calculator for current contribution limits and an explanation of how to calculate them.

In your Solo 401k plan, there are two types of contributions:

• Employee contributions (salary deferral)
• Employer contributions (profit sharing)

The employee contribution limit is per person, not per plan.  This means that any contributions made towards your employer’s 401k plan as an employee will reduce the amount you can contribute to your Solo 401k as an employee for that year.

For example, if you are over the age of 50, then your maximum contribution limit as an employee is $24,000 for 2017.  If you contribute $10,000 to your employer’s 401k plan, you can only contribute up to $14,000 as an employee to your Solo 401k plan.

As always, please consult your CPA or tax advisor.