Last Updated September 16, 2026
If you are self-employed, your self-employed business can sponsor both a Defined Benefit Plan (DBP) and a defined contribution Solo 401(k) plan. Combining the two types of retirement plans can allow a self-employed business owner to significantly increase annual retirement plan contributions.
Contributions to a Defined Benefit Plan are treated as employer contributions. Therefore, contributions to a DBP generally do not reduce the amount you may contribute to a Solo 401(k) as an employee elective deferral.
However, employer contributions made to the Solo 401(k), such as profit-sharing contributions, are subject to special deduction rules when the same business also sponsors a Defined Benefit Plan.
We have previously covered this topic in the following articles:
- Contribute to Both a Defined Benefit Plan (DBP) & a Self-Directed Solo 401(k) Plan
- Making Voluntary After-Tax Contributions to a Combined Hybrid 401(k) and Defined Benefit Plan
Making Solo 401(k) Contributions When You Also Contribute to a Defined Benefit Plan
For purposes of the following example, assume your self-employed business is taxed as an S corporation, you receive W-2 wages from the business, and the business sponsors both a Defined Benefit Plan and a Solo 401(k).
Employee Solo 401(k) Contributions
Assume you have already funded the maximum contribution determined for your Defined Benefit Plan and would also like to maximize your Solo 401(k) contributions.
Because Defined Benefit Plan contributions are employer contributions, they do not reduce your regular Solo 401(k) employee elective-deferral limit.
For 2026, the regular 401(k) employee elective-deferral limit is $24,500. You may generally make this contribution as:
- Pre-tax Solo 401(k) contributions;
- Roth Solo 401(k) contributions; or
- A combination of pre-tax and Roth contributions.
The $24,500 elective-deferral limit is subject to the usual requirement that you have sufficient compensation and is also coordinated with elective deferrals made to other 401(k) and 403(b) plans.
Catch-Up Contributions
If you are age 50 or older by the end of 2026, you may also be eligible to make a $8,000 catch-up contribution.
For participants who are ages 60, 61, 62, or 63 during 2026, the higher SECURE 2.0 catch-up contribution limit is $11,250 instead of $8,000.
Beginning in 2026, certain higher-paid employees must make catch-up contributions on a Roth basis. Whether the mandatory Roth catch-up rule applies depends on the participant’s prior-year FICA wages from the employer sponsoring the plan.
Visit our article on mandatory Roth catch-up contributions beginning in 2026 to learn more.
Employer Solo 401(k) Contributions
Employer contributions to the Solo 401(k), commonly referred to as profit-sharing contributions, require additional analysis when the same employer also sponsors a Defined Benefit Plan.
Under IRC §404(a)(7), special combined deduction limits can apply when an employer sponsors both a Defined Benefit Plan and a defined contribution plan covering the same participant.
A particularly important rule is the 6% rule.
Generally, when employer contributions to the defined contribution plan—excluding elective deferrals—do not exceed 6% of compensation, those contributions are not subject to the IRC §404(a)(7) combined DB/DC deduction limitation.
Therefore, a common design for a business sponsoring both plans is to limit the Solo 401(k) employer contribution to 6% of W-2 compensation while separately funding the Defined Benefit Plan.
This does not mean that 6% is always the absolute maximum employer contribution permitted under the Solo 401(k). Rather, contributions above 6% can cause the combined deduction limitation under IRC §404(a)(7) to apply and should be reviewed with the plan’s actuary or tax adviser.
Voluntary After-Tax Solo 401(k) Contributions — Mega Backdoor Roth
Another important planning opportunity involves voluntary after-tax Solo 401(k) contributions.
Voluntary after-tax contributions are employee contributions, not employer profit-sharing contributions. As a result, they are not treated as employer contributions for purposes of the 6% employer-contribution rule discussed above.
For 2026, the IRC §415(c) annual additions limit for a defined contribution plan such as a Solo 401(k) is $72,000, or 100% of the participant’s compensation if less.
The $72,000 annual additions limit generally includes:
- Pre-tax employee elective deferrals;
- Roth employee elective deferrals;
- Employer profit-sharing contributions; and
- Voluntary after-tax employee contributions.
Catch-up contributions are not counted toward the $72,000 annual additions limit.
Therefore, if your Solo 401(k) plan permits voluntary after-tax contributions and you have sufficient W-2 compensation from your S corporation, you could potentially contribute as much as $72,000 entirely as voluntary after-tax contributions, provided you have not made other contributions that count toward the $72,000 annual additions limit.
Those voluntary after-tax funds can then potentially be converted to a Roth Solo 401(k) or transferred to a Roth IRA, if permitted by the terms of the Solo 401(k) plan—commonly referred to as the Mega Backdoor Roth Solo 401(k) strategy.
Bottom Line
A self-employed business owner may be able to combine a Defined Benefit Plan with a Solo 401(k) to make substantially larger retirement contributions.
The key is understanding that the different contribution types are subject to different rules:
- Employee elective deferrals are generally not reduced because the business also funds a Defined Benefit Plan.
- Employer profit-sharing contributions are subject to the special combined DB/DC deduction rules under IRC §404(a)(7).
- Voluntary after-tax contributions can provide additional room within the Solo 401(k)’s $72,000 annual additions limit and may be used as part of a Mega Backdoor Roth strategy.
Because the allowable Defined Benefit Plan contribution is actuarially determined and the combined-plan deduction rules can be complex, the DBP contribution and any Solo 401(k) employer contribution should be coordinated with the Defined Benefit Plan actuary and the business’s tax adviser.
