My employer does not use the common 401(k) retirement program - they are a state employer and use a different but similar State retirement program, along with a deferred compensation program that uses Roth investments.

I'm not terribly familiar with the terms of a 401(k) program, but if my employer doesn't have one, would I be allowed to (and encouraged to) start one of my own?

Note - I have no intention of leaving my employer's retirement program - I simply wish to know if I could also invest in a 401(k) on my own, separate from my ongoing employer's program.

  • You should invest on your own along with your contributions to your state's retirement plan.
    – RonJohn
    Commented May 1, 2018 at 15:47
  • @RonJohn I have no intention of leaving my state's retirement program - let me clarify this with an edit.
    – Zibbobz
    Commented May 1, 2018 at 15:48
  • 2
    You can't start a 401(k) specifically, but you can contribute to an IRA (Individual Retirement Arrangement) in addition to a 401(k) or 403(b)
    – D Stanley
    Commented May 1, 2018 at 15:49
  • @DStanley An explanation of this and how to invest in one would be a fantastic answer to this question.
    – Zibbobz
    Commented May 1, 2018 at 15:50
  • Try this or this and come back with specific questions.
    – D Stanley
    Commented May 1, 2018 at 15:52

2 Answers 2


You can't start your own 401K unless you have a business. You can, however, contribute to an IRA.

There are 2 main types: Roth and Traditional, with a combined max of $5,500.

They both have their own benefits. With a Roth IRA, there is no pre-tax savings, but the account grows tax-free.

With a Traditional IRA, there are pre-tax savings, but the growth is taxed.

Roth IRA's typically make more sense to invest in, but ask your financial advisor.

If you do own a business, you will want to look into a SEP IRA.


A 401(k) can only be offered by a (private?) employer. Thus, while working for the State, you can't also contribute to a 401(k).

As DStanley mentioned, though, you can -- and should, after maxing out your state plan contributions -- contribute to an IRA.

(Don't forget your Emergency Fund, though!!)

  • 1
    “After maxing out your state contributions” - we have no details on his plan. Is there any match? What are the costs? What are the investing options? He should at least understand what the plan details are. All we know is that it’s ‘not’ a 401(k). (+1 for the ER mention) Commented May 1, 2018 at 16:20

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