Author Topic: Are there any advantages to an employer 401k with no matching vs self-employed?  (Read 1664 times)


  • 5 O'Clock Shadow
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  • Posts: 74
  • Location: location, location.
  • Living the FIRE life pre-FIRE
Hey all- I run my own seasonal business that generates the book of my income, then work a job I enjoy the rest of the year for dirt cheap. I need to double check on this, but I believe that given my status in the company, I won't be eligible for employer matching 401k contributions. In that case, is there any advantage to using their plans versus a self-employed plan from vanguard? Would it somehow reduce my expenses or increase my contribution limit or anything else?

What are the important questions to ask them before enrolling? So far for tax advantaged accounts, I've only contributed to a personal Roth IRA through vanguard, which seems incredibly simple in comparison with the manual the company gave me describing their offerings.

Thanks for your help!


  • 5 O'Clock Shadow
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  • Location: NJ
I'm self-employed as well and have a plan with Vanguard. If you find that you're not eligible for the match, you're better off with the individual 401k - you'll be able to contribute the full $18000 (2015) PLUS an additional 25% of your salary as the employer match (since you're both the employer and employee).

Flying Squirrel

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I would say the biggest difference is with the self-employed, you can choose Vanguard. With an employer sponsored 401(k), you are only able to pick the funds they have available. Sometimes it can be good, but other times the choices can be horrendous.