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I'm leaving a job that has a 401k for a startup that has no 401k. I can switch to using a traditional IRA but the max contribution per year is 5K, so that would cut my tax-deffered savings per year by approximately 10K.

So is it possible for me to open up a solo 401K even though I have a full time job? Thanks

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    If your new company is paying you a salary (that will be reported as wages on a W-2 form), then that money cannot be used to contribute to a solo 401k. If you are a consultant and will be reporting your earnings on Schedule C, that is a different matter. – Dilip Sarwate Aug 7 '12 at 16:04
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    Uh, this is a great answer not a comment. +1 anyway. – JTP - Apologise to Monica Aug 7 '12 at 20:25
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    @JoeTaxpayer Thanks. I responded in a hurry since I did not have enough time then to compose a satisfactory (to me) answer. Of course, littleadv's answer covers it all perfectly. – Dilip Sarwate Aug 7 '12 at 22:04
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Solo 401k is a simplified 401k plan for an employer who only employs himself (spouses allowed). As Dillip said, you have to have self-employed income.

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