Rocket Dollar Knowledge Base

What is the maximum contribution allowed to my Rocket Dollar Self-Directed 401(k) each year?

For your Rocket Dollar Solo 401(k), you can contribute $19,000 + an employer match in 2019. The limit is $56,000.

The Basics

There are three types of contributions to your Self-Directed Solo 401(k):

  1. Traditional (employee salary deferral, pre-tax)
  2. Roth (after-tax)
  3. Employer contribution or profit sharing. You can choose one calculation period per taxable year. These are pre-tax deferrals only.

The maximum employee salary deferral is $18,500 for 2018 and $19,000 for 2019. You can contribute 100% of your income up to the $19,000 limit. Catch-up contributions of $6,000 are possible for persons 50 and over. The IRS calls these "elective deferrals" because you are choosing to make them as an employee.

You have two contribution limits and "buckets" to hit the $56,000 limit.

Since profit sharing and employer contributions can only be pre-tax, it might make sense to contribute to the Roth bucket for your elective/personal contribution and have the employer/business contribution cover your traditional contributions.

2018: $18,500 for a Traditional deferral or Roth personal contribution, $36,500 for a profit sharing/employer contribution.

2019: $19,000 for a Traditional deferral or Roth personal contribution, $37,000 for a profit sharing/employer contribution.

 

Read more about our Self-Directed Solo 401(k)