According to individual k rules, the spouse of the business owner can also participate in the Solo 401k plan, if he or she is also involved in the business. This means that the spouse can also have the right to contribute up to the maximum limit of $53,000 per year. If he or she is at least 50 years old the contribution limit is $59,000.
The spouse also has all the rights and responsibilities of the plan participant. For self directed plans, individual k rules allow plan participants to have Checkbook Control and direct their investments freely. They can also take out a loan from the Solo 401k plan for up to $50,000 or 50% of the account balance, whichever is less.
What happens if the spouse stops working for the Solo 401k business? How does that affect the Solo 401k plan? Sense Financial discusses this situation in the latest Solo 401k Quick Tip video:
Individual k Rules: When a Spouse Stops Working for the Solo 401k Business
According to individual k rules, as long as the business still exists, you can still keep the Solo 401k plan and make contributions using your income from that business. If your spouse stops working and earning income from the business, he or she can still direct the investments within the Solo 401k plan. However, because your spouse no longer earns income from the business, he or she can no longer make contributions to the Solo 401k plan. Your spouse still has all the rights of a plan participant, except for the ability to contribute.