How to Get a 401(k) Through Work or Self-Employment

To get a 401(k), you enroll through your employer’s plan if one is offered, or you open a Solo 401(k) through a brokerage if you’re self-employed with no employees. Through work, you typically become eligible after a short waiting period, complete enrollment forms online, pick a contribution rate and investments, and the money starts coming out of your paycheck automatically. For 2026, you can defer up to $24,500 of your salary, with higher limits if you’re 50 or older.¹

Who Qualifies for an Employer’s Plan

Federal law under the Employee Retirement Income Security Act sets the baseline for who can participate. Most plans require you to be at least 21 years old and to have completed one year of service with the company.² Employers can be more generous and let you in sooner, but they can’t impose stricter rules than federal law allows.³

A “year of service” usually means at least 1,000 hours worked during a 12-month period, roughly 20 hours per week. Part-time workers who don’t hit that threshold still qualify under a separate rule: if you log at least 500 hours in two consecutive years, the plan must let you in. That two-year rule is a recent change under the SECURE 2.0 Act, which shortened the previous three-year requirement for plan years starting after December 31, 2024.²

Once you meet the age and service requirements, your actual start date can still lag by up to six months, or until the start of the next plan year, whichever comes sooner.² Many employers set quarterly entry dates, so you might wait a few weeks after becoming eligible before your first contribution kicks in.

When You’re Enrolled Automatically

If your employer created its 401(k) plan after December 29, 2022, you may not need to do anything to enroll. The SECURE 2.0 Act requires most new plans to automatically enroll eligible employees, starting with plan years that began after December 31, 2024. The default contribution rate your employer picks must be at least 3% but no more than 10% of pay, and it automatically increases by one percentage point each year until it reaches at least 10%, capped at 15%.⁴

You can always opt out or change the percentage to whatever you prefer. Automatic enrollment just flips the default from “out” to “in.”⁵ If money starts coming out of your paycheck before you notice, you can generally withdraw those automatic contributions within 90 days.

Several plan types are exempt from the mandate, including plans that existed before December 29, 2022, SIMPLE 401(k) plans, government plans, church plans, and plans at businesses with 10 or fewer employees. Companies less than three years old also get a pass.⁴ If your employer’s plan predates the mandate, you’ll likely need to enroll yourself.

How to Enroll

Most enrollment today happens through a digital portal hosted by a third-party administrator. You’ll provide your full legal name, Social Security number, date of birth, and current address, then step through screens for your elections and confirm with an electronic signature. If your company uses paper forms, you submit them to HR for manual processing.

The decisions you’ll make during enrollment are:

Your contribution rate: the percentage of each paycheck you want deferred into the plan.
Traditional or Roth: whether contributions go in pre-tax or after-tax.
Investment selections: how your money is allocated across the available funds.
Beneficiary designations: who inherits the account if you die.

You should receive a confirmation notice showing your enrollment date and election choices. The first payroll deduction typically appears within one to two pay periods after the administrator processes your paperwork.

How Much You Can Contribute in 2026

For 2026, you can defer up to $24,500 of your salary into a 401(k).¹ That’s the employee deferral limit, and it applies across all your 401(k) plans combined if you have more than one. Most enrollment forms let you choose any percentage from 1% up to a plan-imposed ceiling, and some plans allow deferrals up to 100% of your pay as long as you stay under the IRS dollar cap.⁶

If you’re 50 or older at any point during 2026, you can add $8,000 in catch-up contributions, bringing your personal limit to $32,500. Workers aged 60 through 63 get an even higher catch-up of $11,250, for a total employee deferral ceiling of $35,750.¹ That enhanced catch-up for the 60-to-63 bracket is a SECURE 2.0 provision that makes the last few years before typical retirement age especially powerful for saving.

When you combine your deferrals with any employer contributions, the total going into your account for 2026 cannot exceed $72,000, or $80,000 if you’re 50 or older and making catch-up contributions.⁷ Most employees won’t bump into that combined ceiling, but it matters if your employer is unusually generous with profit-sharing or matching contributions.

Traditional or Roth

Many plans now offer both a traditional and a Roth option, and you’ll often choose between them during enrollment. The difference is when you pay taxes. Traditional contributions come out of your paycheck before income tax, lowering your taxable income today. You pay tax later when you withdraw the money in retirement. Roth contributions come out after tax, so there’s no deduction now, but qualified withdrawals in retirement are tax-free.⁸

If you expect to be in a higher tax bracket when you retire than you are now, Roth contributions tend to work out better. If you’re in your peak earning years and expect a lower bracket in retirement, traditional contributions let you defer tax until your income drops. You can split contributions between both types if your plan allows it, though the combined total still can’t exceed the annual deferral limit.

Picking Investments and Naming Beneficiaries

Most plans give you a menu of mutual funds, and you allocate percentages across them to total 100%. If you don’t want to build your own mix, target-date funds are the path of least resistance. They automatically shift from stocks toward bonds as you approach your expected retirement year. You pick the fund with the year closest to when you plan to retire.

Beneficiary designations determine who receives your account balance if you die. You’ll typically provide names, dates of birth, and Social Security numbers for each beneficiary. If you’re married, your spouse is automatically the beneficiary in most 401(k) plans. If you want to name someone else as primary beneficiary, your spouse generally must sign a written waiver, witnessed by a notary or plan representative.² This is one of the enrollment steps people skip and later regret. Outdated beneficiary forms are one of the most common causes of estate disputes over retirement accounts.

Why the Employer Match Changes the Math

The employer match is free money, and it’s the single best reason to enroll even if you can only contribute a small amount. The vast majority of plans offer some form of matching contribution. A common formula is dollar-for-dollar on the first 3% of salary you contribute, then 50 cents on the dollar for the next 2%. The exact formula varies by employer, and your plan’s summary plan description will spell it out.

Employer matching contributions usually aren’t fully yours right away. Most plans use a vesting schedule that determines how much of the employer’s contributions you keep if you leave before a certain number of years. Your own contributions are always 100% yours immediately. For the employer match, federal law allows two vesting structures:²

Cliff vesting: you’re 0% vested until you hit three years of service, then jump to 100%.
Graded vesting: you vest gradually, starting at 20% after two years and reaching 100% after six years.

Safe harbor plans are the exception. If your employer uses a safe harbor match, you’re immediately 100% vested in those contributions from day one.² Knowing your vesting schedule matters most when you’re thinking about changing jobs. Walking away one year short of full vesting can mean leaving thousands of dollars behind.

Checking the Fees

Every 401(k) charges fees, and they vary enough to meaningfully affect your long-term returns. Federal rules require your plan administrator to disclose all fees before you first direct your investments.⁹ You should receive this information as part of enrollment or shortly after. Three types of charges to look for:

Investment fees: the expense ratio of each fund, shown as a percentage and as a dollar amount per $1,000 invested. An index fund might charge 0.03% while an actively managed fund charges 0.75% or more.
Administrative fees: plan-wide costs for recordkeeping, legal work, and accounting, often allocated across all accounts.
Individual fees: charges for specific transactions like taking a plan loan or processing a domestic relations order.

A difference of even half a percentage point in annual fees compounds over a 30-year career. Comparing expense ratios across the available funds takes a few minutes and can save you tens of thousands of dollars by retirement.

Setting Up a Solo 401(k) If You’re Self-Employed

If you’re self-employed with no employees other than a spouse, you can open a Solo 401(k) and contribute as both the employer and the employee. The employee deferral limit is the same $24,500, or $32,500 with catch-up contributions if you’re 50 or older. On top of that you can make employer profit-sharing contributions of up to 25% of your net self-employment income. The combined total from both sides cannot exceed $72,000 for 2026.⁷

To get started, you’ll need an Employer Identification Number from the IRS, which you can apply for online and receive immediately.¹⁰ Next, you adopt a written plan document through a brokerage firm or plan provider. Setup fees from third-party administrators typically range from $100 to $1,500 depending on the provider and plan complexity.

Deadlines matter and they differ for the two kinds of contributions. For tax years 2023 and later, a sole proprietor with no employees can adopt a Solo 401(k) after the end of the tax year, as long as the plan is established by the tax filing deadline, not counting extensions.¹¹ Your election to defer salary must still be made before December 31 of the year you want the deferral to apply. So if you want to make employee deferrals for 2026, the plan needs to exist and the deferral election needs to be in place before the end of 2026. The employer profit-sharing contribution is the piece you can fund after year-end, up to your filing deadline.

The Solo 401(k) is only available to businesses where the sole participants are the owner and potentially a spouse. Once you hire employees who meet the plan’s eligibility requirements, it’s no longer a Solo 401(k).³

1
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
2
U.S. Department of Labor. FAQs About Retirement Plans and ERISA
3
Internal Revenue Service. 401(k) Plan Qualification Requirements
4
Federal Register. Automatic Enrollment Requirements Under Section 414A
5
Internal Revenue Service. FAQs – Auto Enrollment
6
Office of the Law Revision Counsel. 26 USC 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans
7
Internal Revenue Service. Notice 25-67 – 2026 Amounts Relating to Retirement Plans and IRAs
8
Investor.gov. Traditional and Roth 401(k) Plans
9
Federal Register. Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans
10
Internal Revenue Service. Get an Employer Identification Number
11
Internal Revenue Service. Publication 560 (2025) – Retirement Plans for Small Business