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  • Multiple retirement accounts

    For year 2021

    If you are employed and have a 401k with your employer and contribute the max to the employee side and your employer contributes the max to the employer side and then open up a SEP IRA with separate income stream (side job), are you limited to the total aggregate of 58K for year 2021 if under age 50.
    For example employer 401k 19500 employee, 38500 employer
    SEP IRA (separate income separate job) can I max out at 58K here as well from employer income if I earn enough
    In other words have two accounts with a total aggregate of 116K

    Also can you open up a simple IRA 6K in addition to the maxed out 401k at 58K? Is there a income limit if you use post tax money for the simple traditional IRA? Assuming you are less than 50 years old

    I looked at this website
    https://www.irs.gov/retirement-plans...ibution-limits

    In particular they give this example:

    Example 1: In 2020, Greg, 46, is employed by an employer with a 401(k) plan, and he also works as an independent contractor for an unrelated business and sets up a solo 401(k). Greg contributes the maximum amount to his employer’s 401(k) plan for 2020, $19,500. He would also like to contribute the maximum amount to his solo 401(k) plan. He is not able to make further elective deferrals to his solo 401(k) plan because he has already contributed his personal maximum, $19,500. He would also like to contribute the maximum amount to his solo 401(k) plan.

    Greg is not able to make further elective salary deferrals to his solo 401(k) plan because he has already contributed his personal maximum, $19,500, to his employer’s plan. However, he has enough earned income from his business to contribute the overall maximum for the year, $57,000. Greg can make a nonelective contribution of $57,000 to his solo 401(k) plan. This $57,000 limit is not reduced by the elective deferrals Greg made under his employer’s plan because the limit on annual additions applies to each plan separately.

    Remember that annual contributions to all of your accounts maintained by one employer (and any related employer) - this includes elective deferrals, employee contributions, employer matching and discretionary contributions and allocations of forfeitures, to your accounts, but not including catch-up contributions - may not exceed the lesser of 100% of your compensation or $61,000 for 2022 ($58,000 for 2021 and $57,000 for 2020). This limit increases to $67,500 for 2022; $64,500 for 2021; $63,500 for 2020 ($62,000 for 2019) if you include catch-up contributions. In addition, the amount of your compensation that can be taken into account when determining employer and employee contributions is limited to $305,000 for 2022; $290,000 in 2021 ($285,000 in 2020).


  • #2
    This might help. Read down a bit to get to SEP IRA. https://www.whitecoatinvestor.com/multiple-401k-rules/ Short version is that you can have both if the employers are unrelated.

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