I am switching jobs. My previous job offered a 401(k) plan and I contributed through payroll. My new company literally offers "no benefits at all" meaning no 401(k), healthcare, etc.

How can I still contribute to my 401(k)?

All this is from CA

  • What kind of employment are you in?
    – Joe
    Jun 14, 2017 at 14:39

2 Answers 2


You will want to do two things, and do them correctly:

1) You will want to roll over your existing 401K into a Rollover IRA. I would go with either Vanguard or Fidelity. While I have both, I like the website of Fidelity better. You can sign up for free accounts for both and see which one you like better. Some love Vanguard more.

They will help you with the rollover, not charge fees, and give you more investment choices. You want to make sure that you never receive the money, it goes directly from your existing 401(k) to the new one. This avoids a lot of tax hassles.

2) You then want to start your own IRA or Roth IRA. Again, both Vanguard and Fidelity will give great advice on how to get started, what you can contribute, and the mechanics of it all.

  • 1
    Pete, why bother rolling over the 401K? When I moved companies, I just left the money where it was because I was happy with the investment choices available, though I understand some don't give many options. For new contributions, I did step 2: set up an SEP-IRA. (+1 by the way).
    – Peter K.
    Jun 14, 2017 at 13:21
  • 1
    If you are happy with your investment choices, have no fees, and are comfortable with the administrator then you could leave it there. However, I just prefer to have it all in one place. Fidelity is great for that.
    – Pete B.
    Jun 14, 2017 at 13:45
  • "2" is really the answer. "1" brings us back to the rollover or not debate. We should find a good version of that, clean up our answers, and post at the FAQ. Jun 14, 2017 at 14:05
  • @JoeTaxpayer There is already a question Why would you not want to rollover a previous employer's 401(k) when changing jobs? that is already in the FAQ (in the 401(k) section of the FAQ). Jun 14, 2017 at 15:32
  • Ha. I need to print a copy of FAQ and keep it handy. I guess we're set for now. Jun 14, 2017 at 20:05

Pete's suggestion to roll your money into an IRA is a good way to manage existing money, but you can only contribute an additional $5,500/year (2017 numbers -- $6,500 if you're over 50, but limited in how much you can make and still be eligible to deduct your contributions). $5,500 is much lower than the $18,000 limit for 401(k) contributions.

California is one state that is creating an alternative program that will allow payroll deductions even if you don't have a retirement plan sponsored by your employer. California's plan is called Secure Choice, and they hope to have it available by 2019.

You could also consider moving to a 1099 contract relationship with your employer and pay your own taxes and create a solo 401(k) plan. That assumes your employer would pay you the difference on their share of the payroll taxes and any other benefits that they are currently giving you that you would lose by moving to a contractor relationship.

  • That first sentence is not quite correct. If you (or your spouse) have compensaion (wages, salary, self-employment income, commissions on sales, etc), you are eligible to make a contribution to a Traditional IRA subject to the limits mentioned. What is limited is the ability to deduct the contribution on your income tax return and it is this limitation that kicks in when the income is too hight. If you don't get to deduct the contribution, file Form 8606 (it can be sent in with your tax return or separately) to report to the IRS that you have made a nondeductible contribution ... Jun 14, 2017 at 15:26
  • ... and so you will not be taxed on that money when it is withdrawn from the IRA in later years. Jun 14, 2017 at 15:27

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