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Home > Blog > Self-Directed IRA & Solo 401(k) Contribution Limits

Self-Directed IRA & Solo 401(k) Contribution Limits

Both IRAs and Solo 401(k) plans are great options to help people prepare for retirement. However, account holders aren’t allowed to contribute more than a certain amount each year. Understanding IRA and Solo 401(k) contribution limits is essential if you want to avoid tax penalties.

Woman filling out paper work to take out a loan from a Solo 401(k)

Are Self-Directed IRA Contribution Limits Different From a Standard IRA?

Despite the differences between a standard IRA and a Self-Directed IRA, limits on contributions aren’t among them: Whether you have a standard or Self-Directed IRA, the max contribution is the same.

Chalkboard comparing a Traditional IRA and a Roth IRA retirement accounts.

Does it Matter Whether You Have a Traditional or Roth IRA?

No. The Self-Directed Roth IRA contribution limits are the same as those for a Traditional Self-Directed IRA.

What Are the Solo 401(k) and Self-Directed IRA Limits?

As of 2024, the max contribution to a Self-Directed IRA is $7,000 per year for those younger than age 50. The amount individuals age 50 and over can contribute is $8,000. For SEP IRAs, the limit is $69,000.

For Solo 401(k)s, the limit is $69,000 for those younger than 50 and $76,500 for those 50 or older. Your self-employment income will determine if you're able to contribute the maximum amount. Feel free to use our Solo 401(k) Contribution Calculator to help you determine your maximum contribution.

Here's a snapshot of the contribution limits:

Retirement Plan 2024 Limit: Under Age 50 2024 Limit: Age 50+ 2023 Limit: Under Age 50 2023 Limit: Age 50+
Solo 401(k) $69,000 $76,500 $66,000 $73,500
IRA: Traditional and Roth $7,000 $8,000 $6,500 $7,500
SEP IRA $69,000 $69,000 $66,000 $66,000

How Do Self-Directed Solo 401(k) Contribution Limits Work?

The maximum Solo 401(k) contribution can be confusing because, with a Solo 401(k), the account holder will be contributing in two different capacities, as both the employee and the employer.

In the employee role, you can contribute up to $22,500 in 2023 or $23,000 in 2024. For those 50 or older, the Self-Directed 401(k) limits allow for an additional $7,500 in both 2023 and 2024.

When acting as the employer, you can also contribute up to 25% of your net self-employment income.

The two parts are added together to determine the overall annual Solo 401(k) contribution.

Interested In Learning More?

Schedule a call with one of our Self-Directed Specialists today to get answers to your questions and find the investment vehicle that's right for you.


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