Contribute to Both a Nonqualified Deferred compensation Plan (NQDC) and a Self-Directed Solo 401k

Yes, it is possible to contribute to both a 401k plan including a self-employed solo 401k and a nonqualified deferred compensation plan. Often times, a a nonqualified deferred compensation plan is used to help supplement a high earners retirement planning.

1) Having a Nonqualified Deferred compensation Plan (NQDC) will not prevent one from setting up a Solo 401k (if one is otherwise eligible to do so).

2) While we don’t offer non-qualified plans, to our knowledge contributions to such a plan won’t reduce one’s ability to make contributions to a Solo 401k since they are not tax deductible.

Items to Consider

Since contributions to a solo 401k are tax deductible and Roth solo 401k funds also grow tax free, one may consider first contributing to a solo 401k as contributions to a Nonqualified Deferred compensation Plan (NQDC) are neither tax deductible nor are distributions tax free once distributions commence.


About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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