Can I Have a Solo 401k and an Employer 401k

Yes, you can have both a Solo 401(k) and an employer-sponsored 401(k) plan. A Solo 401(k) is a retirement savings plan for self-employed individuals or small business owners without any employees. It allows you to contribute as both the employer and the employee. An employer-sponsored 401(k) is offered by your employer and allows you to contribute a portion of your paycheck on a pre-tax basis. Having both plans can maximize your retirement savings and provide tax benefits. However, there are contribution limits and eligibility requirements for both types of plans, so it’s best to consult a financial advisor to determine the best strategy for your specific situation.

Dual 401k Advantages

Maintaining both a solo 401k and an employer-sponsored 401k can provide significant financial advantages, including:

  • Increased Contribution Limits: Solo 401k plans offer higher contribution limits than employer-sponsored plans, allowing individuals to save more for retirement.
  • Flexibility: Solo 401k plans offer greater flexibility in investment options and distribution rules.
  • Tax Benefits: Both solo and employer-sponsored 401k plans offer tax-advantaged savings.
Solo 401kEmployer-Sponsored 401k
Contribution Limits:
Up to $66,000 in 2023 (includes employee and employer contributions)
Contribution Limits:
Up to $22,500 in 2023 (employee contribution only)
Investment Options:
Wide range of options, including stocks, bonds, and mutual funds
Investment Options:
Limited to employer-selected options
Distribution Rules:
Distributions can be taken without penalty after age 59½
Distribution Rules:
Distributions are generally subject to a 10% early withdrawal penalty before age 59½

Can I Contribute to Multiple 401(k) Plans?

Yes, you can contribute to both a solo 401(k) plan and an employer 401(k) plan. However, there are limits on how much you can contribute to each plan.

Contribution Limits for Combined 401(k) Plans

The contribution limits for 401(k) plans are set by the IRS. For 2023, the contribution limits are as follows:

  • Employee elective deferrals (traditional and safe harbor plans): $22,500
  • Employer matching contributions: 100% of the employee’s elective deferrals, up to a maximum of $66,000 (including elective deferrals)
  • Non-elective employer contributions (for safe harbor plans only): 100% of eligible compensation, up to a maximum of $66,000

If you have both a solo 401(k) plan and an employer 401(k) plan, the total amount you can contribute to both plans is limited to the above limits. For example, if you contribute $10,000 to your solo 401(k) plan, you can only contribute $12,500 to your employer 401(k) plan.


Let’s say you are self-employed and you have a solo 401(k) plan. You also work part-time for an employer who offers a 401(k) plan.

Plan TypeContribution Limit
Solo 401(k)$66,000
Employer 401(k)$22,500

In this example, you can contribute a total of $88,500 to your solo 401(k) and employer 401(k) plans combined. You could allocate your contributions as follows:

Plan TypeContribution
Solo 401(k)$50,000
Employer 401(k)$22,500

Eligibility Requirements for Solo and Employer 401ks

Individuals who are self-employed, meaning they own their own business, can establish a solo 401(k) plan if they meet the following requirements:

  • Must be employed as either a sole proprietor or self-employed individual
  • Have net income from self-employment
  • Have no employees (other than the spouse)

Employers who have employees and wish to establish a 401(k) plan must meet the following requirements:

Number of EmployeesMust have at least one employee, including the owner
Business StructureCan be established by a variety of business entities, including corporations, LLCs, and partnerships
Net IncomeMust have net income from the business
Plan TypeCan choose from a variety of plan types, including traditional, safe harbor, and SIMPLE 401(k) plans

Multiple 401(k) Accounts: Solo 401(k) and Employer 401(k)

Individuals can contribute to multiple 401(k) accounts, including a Solo 401(k) for self-employed individuals and an employer-sponsored 401(k).

Withdrawal and Distribution Rules in Multiple 401(k) Accounts

When withdrawing funds from multiple 401(k) accounts, the following rules apply:

  • Withdrawals from any 401(k) account are generally subject to ordinary income tax and potential early withdrawal penalties if taken before age 59½.
  • Required Minimum Distributions (RMDs) must be taken from all 401(k) accounts starting at age 72.
  • The IRS mandates a specific withdrawal order, known as the “Multiple Employer Plan Aggregation Rule,” when there are multiple employer-sponsored 401(k) accounts.
  • Aggregation rule: Withdraw funds from older accounts first, then from newer accounts.
Withdrawal Order for Multiple Employer-Sponsored 401(k) Accounts
AccountWithdrawal Order
Employer A (oldest)1st
Employer B2nd
Employer C (newest)3rd

Note: The aggregation rule does not apply to Solo 401(k) accounts.

Well, there you have it, folks! The ins and outs of juggling a solo 401k and an employer 401k. It’s not a walk in the park, but it’s definitely doable with a little planning and preparation. So, go forth and conquer that retirement savings game. Thanks for hanging out with me, and be sure to swing by again—I’ll be here dishing out more retirement wisdom. In the meantime, keep those finances in tip-top shape, my friends!