Thinking you need to choose between a full-time job and opening a Solo 401k? Good news — you don’t. Even if you have a regular employer, you can still set up a Solo 401k for your own business.
Read on to learn how having a full-time job affects your Solo 401k eligibility and how you can take advantage of this retirement strategy.

Maximize Your Retirement Savings With a Solo 401k
As a business of one, you can contribute more and potentially save more on taxes.* Carry’s Solo 401k is built for entrepreneurs, freelancers, and high earners who want flexible investing and bigger retirement contributions, all in one streamlined plan.
LEARN MORE*Solo 401(k) eligibility and contribution limits depend on IRS rules. Carry does not provide tax advice, consult a tax advisor. Carry Advisors LLC, an SEC-registered investment adviser, provides investment advisory services for discretionary and non-discretionary accounts (e.g., Solo 401(k), IRA, taxable brokerage accounts). Bank and trust accounts are not advised by Carry Advisors. Brokerage accounts are introduced by Global Carry LLC and carried by DriveWealth LLC, both members FINRA/SIPC. Advisory fees may apply and additional disclosures are described in our Form ADV and CRS.
Solo 401k Eligibility Rules
A Solo 401k is designed for self-employed individuals and small business owners. To qualify, you generally need to meet just two main requirements:
✅ You have a business or earn self-employment income.
✅ You have no employees, except for your spouse. Employees include part-time workers who are at least 21 years old and who have worked 500 hours or more in each of two consecutive 12-month periods.
The size, type, or structure of your business usually does not affect eligibility. What matters most is that you generate business income and do not employ workers who meet the criteria above.
📝 Note: Some categories of workers typically do not count as employees for a Solo 401k plan (if your plan document allows):
✅ Employees under age 21
✅ Part-time employees who do not meet the long-term part-time (LTPT) eligibility — fewer than 500 hours in each of two consecutive years (for 2025 plan years)
✅ Independent contractors properly classified under common-law rules
✅ Union employees
✅ Nonresident alien employees with no U.S.-source earned income from your business
These exclusions mean you can often maintain a one-participant Solo 401k plan even if you have certain categories of workers.
How Does Having a Job Affect a Solo 401k?
Having a full-time job does not prevent you from opening a Solo 401k. Your eligibility for a Solo 401k is based solely on your business or self-employment income, not your W-2 job.
📝 Note: Your contribution limits for a Solo 401k may be affected if you also participate in a 401k plan at work.
Contributions Are Separate
✅ Solo 401k contributions must come from your business or self-employment income.
✅ Contribution amounts are determined by what you earn from your business, not your employer paycheck.
✅ You cannot use wages from your day job to fund your Solo 401k.
Can I Get a Solo 401k Even If I Have a 401k From My Day Job?
Yes, you can contribute to both a Solo 401k and a 401k at your full-time job at the same time.
✅ Your Solo 401k is funded with business or self-employment income.
✅ Your employer 401k is funded with the W-2 wages you earn from that job.
This setup allows you to save more for retirement by taking advantage of both plans without affecting your Solo 401k eligibility.
How Solo 401k Contributions Work
In 2025, the total Solo 401k contribution limit is $70,000, or $77,500 if you are age 50 or older (including the $7,500 catch-up contribution).
📝 Note: If you also have a 401k through your day job, you cannot contribute the full amount as an employee to your Solo 401k. Your total employee contributions are aggregated across all plans.
Employee vs. Employer Contributions
With a standard 401k at work:
✅ You can contribute up to 100% of your W-2 compensation, up to $23,500 in 2025.
✅ If you are age 50 or older, you may add a catch-up contribution, bringing the total to $31,000.
✅ Employer contributions, such as matching, are optional and vary by company.
With a Solo 401k:
✅ You act as both the employee and the employer.
✅ Employee contribution limits are the same as a regular 401k: $23,500 ($31,000 if 50+).
✅ Employer contributions allow additional savings, with total annual additions up to $70,000 for 2025.
✅ Employer contributions are generally up to 25% of compensation. For self-employed individuals who are unincorporated, this is roughly 20% of net earnings after required adjustments.
Employee Contributions Are Aggregated Across Plans
The 2025 employee contribution limit applies to all 401k plans combined. This means the total contributions you make as an employee to both your Solo 401k and your employer 401k must not exceed $23,500 (or $31,000 if 50+).
✏️ Hypothetical Example:
If you are under 50 and contribute $15,000 to your 401k at work, the most you can contribute as an employee to your Solo 401k is $8,500.
$15,000 + $8,500 = $23,500 (the 2025 limit).
📝 Note: If you have both a Solo 401k and a 401k at work, track your totals carefully to avoid overcontributing. Tools like a Solo 401k calculator can help ensure your contributions stay within limits.
How to Open a Solo 401k (Even If You Have a Job)
A Solo 401k is not sponsored by an employer, so you need to set it up yourself under your business entity. Your W-2 income from a full-time job does not affect your eligibility or application.
If you’re ready to start a Solo 401k, follow these steps:
Step 1: Choose a Solo 401k Plan Provider
Different providers offer varying features, investment options, and levels of service.
✅ Some providers do not offer Roth accounts or access to alternative investments.
✅ Others provide a full range of features but require you to set up your plan with a third-party brokerage.
Compare providers carefully and choose one that offers the features you want along with strong customer support. Because you manage the Solo 401k yourself, responsive customer service can make a big difference.
Step 2: Get an EIN
An Employer Identification Number (EIN) identifies your business for tax purposes. If you already have an EIN, you can use it. If not, apply on the IRS website — it’s free and usually instant.
Step 3: Complete the Application
Once you have an EIN, you can begin the registration process with your chosen provider. Application steps and timing vary (some providers require paper forms).
📌 With Carry, the process is completed entirely online.
Step 4: Obtain an EIN for Your Solo 401k Trust
Your Solo 401k is held in a trust. The trust is a separate entity, and investments belong to the trust, not you personally.
You may need an EIN for banking, withholding, or tax filing (for example, Form 945 or 990-T).
Step 5: Open Bank and Brokerage Accounts for Your Solo 401k Trust
The trust requires its own bank and brokerage accounts. Contributions go into the Solo 401k bank account, then invested via the brokerage account.
📌 Carry Solo 401k users do not need to do this manually — accounts are created automatically.
Once your Solo 401k is established, fund your account with a contribution or rollover from another retirement plan. After funding, you can begin investing your Solo 401k funds.
Final Thoughts
Even with a full-time job, you can open a Solo 401k. The plan is designed for business owners and self-employed individuals, allowing you to save for retirement through both your business and your employer.
Understanding how contribution limits work across multiple plans can help you make strategic decisions and maximize potential retirement savings. By setting up a Solo 401k properly, you gain greater control over your investments and flexibility in planning for the future, all while keeping your day job.
Disclaimer:
The Carry Learning Center is operated by The Vibes Company Inc. (“Vibes”) and contains generalized educational content about personal finance topics. While Vibes provides educational content and technology services, all investment advisory services discussed on this website are provided exclusively through its wholly-owned subsidiary, Carry Advisors LLC (“Carry Advisors”), an SEC registered investment adviser. The information contained on the Carry Learning Center should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or engage in a particular investment, accounting, tax or legal strategy. Vibes is not providing tax, legal, accounting, or investment advice. You should consult with qualified tax, legal, accounting, and investment professionals regarding your specific situation.
The accounts, strategies and/or investments discussed in this material may not be suitable for all investors. All investments involve the risk of loss, and past performance does not guarantee future results. Investment growth or profit is never a guarantee. All statements and opinions included on the Carry Learning Center are intended to be current as of the date of publication but are subject to change without notice.
To access investment advisory services through Carry Advisors, you must be a client of Vibes on an eligible membership plan. For more information about Carry Advisors’ investment advisory services, please see our Form ADV Part 2A brochure and Form CRS or through the SEC’s website at www.adviserinfo.sec.gov.