Spousal participation

Can my spouse participate in my Solo 401k plan?

• A spouse is eligible to participate in your plan if they are an employee of the company that adopts the plan
• If your spouse is an employee of the company that adopts your Solo 401k, he/she is considered an owner-employee since the two of you are married
• Or, if a husband and wife both own and operate the business together, they can both participate in the same Solo 401k
• Solo 401k eligibility requires that there are no part-time employees at 500 hours+/year or full-time employees in the adopting company other than owners, partners and their spouses
• Independent contractors and part-time employees (who work under 1000 hours per year) are not considered full-time employees

Example

• Mary has a marketing company called MMM Marketing
• Mary employs her husband, John, to do bookkeeping for the company
• John can also participate in the Solo 401k adopted by MMM Marketing

Benefits of having a spouse participate in your plan

• A spouse who is eligible to participate in the Solo 401k can also make contributions to the plan, from his/her income received from the adopting employer
• This effectively doubles the amount that can be contributed to Solo 401k
• The spouse can also transfer eligible existing retirement funds into the plan
• When both spouses participate in the same Solo 401k, this eliminates the costs of having to create and maintain multiple plans

Establishing separate accounts

Your Solo 401k requires separate accounts per participant and per type.

If your spouse is participating in the Solo 401k, he/she will need additional account(s) for their funds within the Solo 401k.

Separate accounts