I work two full time jobs and both have 401k options. One matches up to 7% of my income and the other doesnt match. Can I contribute 19.5k *2 to two independent accounts?

Forum|Forum|4 years ago
September 29, 2021
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SundayInSalem

Level 8

No. You can contribute a maximum of $19,500 spread among all your 401(k) plans. If you overcontribute, you will have to withdraw the money or pay a penalty. Employees [fixed typo] age 50 and over can make an additional catch-up contribution of $6,500.

If you want to contribute more, you can contribute to an individual retirement account (IRA) even if you max out you 401(k) contribution.

The IRS says:

The limit on employee elective deferrals (for traditional and safe harbor plans) is:

$19,500 in 2021 and 2020 ($19,000 in 2019), subject to cost-of-living adjustments

Generally, you aggregate all elective deferrals you made to all plans in which you participate to determine if you have exceeded these limits. If a plan participant’s elective deferrals are more than the annual limit, find out how you can correct this plan mistake.

See: Deferral limits for 401(k) plans

TaxAdvisorAuthor

Level 2

Ok thanks. Based on this article here - , it seems to indicate that you can contribute over 19.5k (up to 58k) as long as the employers are independent. Is this not right ?

SundayInSalem

Level 8

The $58,000 limit refers to the maximum employee and employer contribution. As an employee you are limited to $19,500. See Example 1 in Retirement Topics - 401(k) and Profit-Sharing Plan Contribution Limits

The remainder is a non-elective contributions made by the employer or commonly to a profit-sharing plan by an individual with a Solo 401(k) plan. See Ben example in One-Participant 401(k) Plans

What is a Non-Elective Contribution?