I'm currently working in a contract position with no option to contribute to a 401k. For 2019, the contribution limit on a 401k is 19,000 vs 6000 on an IRA. Why is there such a big difference? I could understand if you were contributing to both. If you only can contribute to one or the other why can't the limits be more equal?

  • 2
    People do contribute to both.
    – Ben Voigt
    Feb 13, 2019 at 16:07
  • 1
    Do you have the ability to a 1099 contract? If so, you can really sock money away. A contractor making 40/hr below age 50 can put away about 34K/year. If they are above 50, add another 6k to that.
    – Pete B.
    Feb 13, 2019 at 17:01
  • @PeteB.Unfortunately the only option was W2 for this position. If on 1099, what type of account can you put away that much in?
    – Rich
    Feb 13, 2019 at 18:03
  • 3
    Wow, so lack of employee benefits and lack of self-employment benefits (20% pass-through deduction, SEP-IRA/solo 401k). Kind of a bummer of a position to be in.
    – Hart CO
    Feb 13, 2019 at 18:20

1 Answer 1


If you are a 1099 contract worker (self-employed), you should be eligible for a solo 401(k) which potentially has a much higher effective contribution limit because the participant is both the employer and the employee.

Edited to note: Since I posted this answer, you have clarified in the comments that you are a W-2 employee. It seems the best option is to seek a job that will allow for 401(k) contributions or allow you to work as a contractor.


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