Last Updated 1/5/2025
QUESTION:
I am 53; therefore, can I contribute the catch up amount to the after-tax solo 401k ?”
ANSWER:
The short answers is no. The IRS and 401k rules including the solo 401k rules, do not permit the treatment of catch up contributions to be applied as voluntary after-tax contributions. This is true for the current catchup rules for those age 50 or older as well as for the expanded catch up rules found in SECURE 2.0 Act which goes into effect starting in 2025 where those age 60, 61, 62 and 63 can make higher $10,000 (indexed for inflation) catch up contributions to their solo 40k.
- The maximum amount of voluntary after-tax contributions that you can make to a solo 401k plan for 2025 is $70,000 even if you are 50 or older (assuming that you have the self-employment income to justify such contributions).
- Assuming that (i) you are 50 or older, (ii) you have not already made employee contributions to another 401k plan (such as through a day job) and (iii) that you have sufficient self-employment income, you can make an additional $7,500 catch up contribution for 2025. This would be made as either a pre-tax or Roth employee contribution (not as a voluntary after-tax contribution) and would also not be counted in determining the amount of voluntary after-tax contributions that you can make.
