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Can you contribute to an employer 401K (W2 job) and also contribute to a Solo 401k?
Can you contribute to an employer 401K (W2 job) and also contribute to a Solo 401k?
Rachel Nabers avatar
Written by Rachel Nabers
Updated over a week ago

The answer is yes, and understanding how these contributions interact can help individuals make the most of their retirement savings opportunities.

Employee (Salary Deferral) Contributions

The Department of Labor permits a maximum employee salary deferral contribution of $22,500 (as of 2023). This contribution can be up to 100% of an individual's net compensation. However, this maximum limit applies across all plans where the individual is employed. This is a crucial point to consider when contributing to both an employer 401(k) and a Solo 401(k).

For instance, let's consider the example of Tim, who has a full-time W2 job and a side business with a Solo 401(k).

Tim is contributing $12,000 to his employer's W2 job 401(k). This leaves him with $22,500 - $12,000 = $10,500 remaining for his Solo 401(k) employee contribution. In other words, if an individual contributes, for instance, $10,000 to their regular job's 401(k), they can allocate the remaining balance to their Solo 401(k).

Employer (Profit Sharing) Contributions

In addition to employee contributions, Solo 401(k) plans offer the opportunity for employer (profit sharing) contributions. This type of contribution can range from 20% to 25% of an individual's net profits from their business. The unique aspect of employer contributions is that they are not affected by contributions made to any other retirement plan.

Maximizing Contributions

To maximize retirement savings while contributing to both a W2 job's 401(k) and a Solo 401(k), individuals should consider the following steps:

Understand Contribution Limits: Familiarize yourself with the contribution limits for both employee and employer contributions. This knowledge will help you make informed decisions about how much you can contribute to each account.

Allocate Contributions Wisely: Based on the total employee contribution limit, allocate your contributions between the employer 401(k) and the Solo 401(k) in a way that aligns with your retirement goals and financial situation.

Leverage Employer Contributions: Since employer contributions to the Solo 401(k) are not impacted by contributions to other retirement plans, take advantage of this opportunity to increase your retirement savings even further.


In conclusion, contributing to both an employer 401(k) and a Solo 401(k) is a viable strategy for maximizing retirement savings. By understanding the contribution limits and opportunities for both employee and employer contributions, individuals can effectively balance their contributions and work towards a secure financial future. It's advisable to consult with a financial advisor or tax professional to ensure that your retirement strategy aligns with your overall financial plan.

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