Can My Spouse Participate in My Individual 401(k) Plan?

Spouse participation: Spouses (and partners, as well as partners’ spouses) are eligible to participate if they work for the business and receive qualifying compensation.

Increased savings: If both spouses participate, each person can contribute to the annual limits, which essentially doubles the household’s tax-advantaged contributions.

Active status: If your spouse stops working for the business, they can keep their existing account balance but can’t make new contributions unless they’re employed by the company again.

Individual(k) plans, also known as Solo 401(k) plans or self-employed 401(k)s, are designed for self-employed individuals or small business owners with no employees. These plans offer many of the same benefits as traditional 401(k) plans, including tax-deferred growth and the potential for employer contributions.

However, spousal participation is not automatic. Eligibility depends on whether your spouse is legitimately employed by the business and receives qualifying compensation.

Individual 401(k) spousal requirements

Spousal participation in an Individual 401(k) depends on several eligibility and compensation requirements. Factors such as how the business is structured, whether a spouse is legitimately employed, and how compensation is reported all play a role in determining who can participate and how contributions are handled.

Is my spouse eligible for my Individual 401(k)?

If you actively employ your spouse, they may be eligible to participate in your Solo 401(k) plan. This means your spouse must be legitimately employed by the business and earning compensation as either a co-owner, partner, or employee. Your registered business structure helps determine how your spouse will be included in your plan.

Sole proprietorship: You are the only business owner, and your spouse is included as a W-2 employee in your business.
Partnership: You and your spouse will be listed as co-owners of the business. Each spouse receives a share of partnership income as reported on Schedule K-1, which documents each partner’s share of business income.

The IRS treats compensation differently depending on how the business is structured, which directly affects eligibility and contribution limits.

How much can my spouse contribute?

One of the benefits of including a spouse in an Individual 401(k) plan is the ability to increase total household retirement savings. Because contribution limits apply to each eligible participant, both spouses can take advantage of the maximum limits—provided each spouse earns enough compensation from the business to support their contributions.

Solo 401(k) contribution limits when a spouse participates (2026)

Participant age	Maximum contribution per person	Combined household maximum
Under age 50	$72,000	$144,000
Ages 50–59 or 64+	$80,000	$160,000
Ages 60–63	$83,250	$166,500

When both spouses qualify, each can contribute up to the applicable limit based on age and compensation, allowing households to significantly increase tax‑advantaged retirement savings.

What happens if my spouse stops working for my business?

If your spouse’s employment with your business ends, they don’t have to withdraw or rollover their funds; they can keep their Solo 401(k) plan. However, your spouse can’t contribute new funds to this Solo 401(k) plan while they aren’t actively employed by your business.

Do I need to open a new plan to add my spouse?

No, you can add your spouse to your existing Individual 401(k) plan by working with your plan provider. The provider will amend your plan to add your spouse. Once added, separate bank and brokerage accounts are created for them, and they can start making contributions and investing.

How to start an Individual 401(k) plan

A great starting point is to set up a call with your financial advisor or tax professional. They can help ensure you comply with IRS rules and maximize the benefits of your Solo 401(k) plan. With proper planning and management, you and your spouse can build a robust retirement nest egg for a more secure and comfortable financial future.

Choosing the right provider is an important step, too. With more than 45 years of industry experience, Ascensus can act as your plan provider and partner. We understand that many small business owners don’t always have the time or resources to manage a retirement plan. That’s why our retirement solutions are flexible, transparent, and designed to help owner-only businesses like yours.

Ready to get started?

To learn more about starting or updating your Solo 401(k) or similar retirement plan, contact our retirement specialists at 833-893-3233.