0

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

Improve this question
3
  • 4
    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, 2012 at 16:04
  • 1
    Uh, this is a great answer not a comment. +1 anyway.
    – JTP - Apologise to Monica ♦
    Aug 7, 2012 at 20:25
  • 1
    @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, 2012 at 22:04

1 Answer 1

Reset to default
4

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.

Improve this answer

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .