Can a Husband and Wife Combine their Retirement Funds into One Self-Directed Solo 401(k) Account?

To properly answer this question, let me first explain the difference between a Self-Directed Solo 401(k) Plan and a Self-Directed Solo 401(k) Account, as the terms are often interchanged although they have different meanings here.

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A Self-Directed Solo 401(k) Plan is the governing doctrine that stipulates the rules, policies, etc. that the plan participants, or account holders, must follow. The individuals participating in the plan make their contributions to their own individual Accounts held at a bank and/or brokerage firm.

That said, a married couple who operates their own self-employed business, with no full-time w-2 employees working more than 1,000 hours per year, is eligible to set up one Self-Directed Solo 401(k) plan sponsored by their business. While technically referred to by the IRS as one-participant plans, two exceptions to this “one-participant” requirement are, 1) businesses owned by a husband and wife, and 2) businesses owned by partners.

While only one plan would be established and sponsored by the company, each spouse/partner participant would have his/her own bank checking or brokerage account in the name of the Self-Directed Solo 401(k) for benefit of (FBO) that person.

Remember, retirement accounts are always established for an individual account holder, not multiple people.

This is no different than if a husband and wife both worked for Amazon and they each participated in Amazon’s 401(k) plan. The husband and wife would not make their contributions to one joint account under Amazon’s plan, they would each have their own.


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