Can You Have More Than One 401k, A 2026 Guide

Your new US hire just asked a question that stopped you mid-conversation: "I already have a 401k from my last job. Can I contribute to yours too?"

For UK and EU headquartered companies building US teams, this question surfaces more often than you'd expect. And the answer matters because getting it wrong creates tax headaches for employees and compliance risks for employers. The short answer is yes, you can have more than one 401k account. But the rules governing contributions across multiple plans are where things get complicated, particularly for mid-market companies navigating US benefits for the first time.

A 401(k) plan is a US employer-sponsored defined contribution retirement plan that allows eligible employees to defer part of their pay into tax-advantaged accounts, often with employer contributions. Unlike UK workplace pensions or EU occupational schemes, each US employer sponsors its own separate plan. This means experienced US professionals often accumulate multiple accounts as they move between jobs, creating a patchwork of retirement savings that your People and Finance teams need to understand.

Key Takeaways

• It's legal to have more than one 401k account. Many people accumulate multiple accounts through job changes, though owning multiple accounts differs from contributing to multiple plans simultaneously.

• The employee elective deferral limit applies once per person per year across all 401(k) plans combined, meaning employees with two jobs must keep their combined deferrals at or below the annual IRS limit, according to Teamed's cross-employer 401(k) compliance checklist for mid-market companies.

• Employer contributions follow different rules. Matching and profit-sharing contributions are tested within each employer's plan, up to separate plan-level caps.

• Mid-market companies hiring in the US must understand these rules to avoid non-compliant plan design and to properly advise staff who already hold another 401k or a Solo 401k from self-employment.

• European organisations expanding into the US should treat 401k design as part of a wider benefits and employment model strategy, including the entity versus employer of record choice.

• For UK and EU headquartered firms, grasping multiple 401k rules helps People and Finance leaders design compliant, competitive US benefits that attract experienced talent.

Can You Have More Than One 401k Account

An employee elective deferral is a 401(k) contribution made from an employee's wages (pre-tax or Roth) that is subject to a single annual IRS limit per individual across all 401(k) and similar plans. This single limit creates the core constraint that governs multiple 401k situations.

You can legally hold more than one 401k account. This happens constantly. Someone works at Company A for five years, leaves their 401k balance behind, joins Company B and starts a new plan, then takes on consulting work and opens a Solo 401k for that self-employment income. Three accounts, all perfectly legal.

The confusion arises when people conflate owning multiple accounts with contributing to multiple plans. Holding old accounts from previous employers creates no compliance issues. Actively contributing to more than one plan in the same calendar year is where the rules tighten.

Here's how people typically end up with multiple 401k accounts:

• Job changes that leave old 401k balances behind with former employers

• Side businesses that adopt a Solo 401k for self-employment income

• Corporate mergers or acquisitions that result in separate legacy accounts

• Working two part-time jobs where both employers offer 401k plans

For UK and EU mid-market firms hiring experienced US professionals, this matters because your new hires often arrive with existing retirement accounts. A senior product manager you're recruiting from a San Francisco tech company probably has at least one old 401k sitting somewhere. Understanding how your plan interacts with their existing accounts shapes the benefits conversation from day one.

How Many 401ks Can You Have At The Same Time

There's no legal cap on the number of 401k accounts you can hold. The IRS doesn't care if you have two accounts or twelve. What they care about is how much you contribute across all of them in a single tax year.

Consider a realistic scenario: a US-based executive works for your UK-headquartered company's US subsidiary while also serving on the board of an unrelated startup that offers a 401k. With 497,000 Americans having at least $1 million in their 401(k) accounts, many senior executives manage substantial balances across multiple plans. She participates in both plans simultaneously. This is permitted. But her total employee deferrals across both plans must stay within the annual limit.

Or picture a software engineer who works full-time for your company while running a weekend consulting practice. He could contribute to your company's 401k and maintain a Solo 401k for his consulting income. Again, permitted, but the employee contribution limits are shared.

Many small accounts create administrative headaches even when they're perfectly legal. Lost logins, forgotten balances, fragmented investment strategies, and difficulty tracking total retirement assets across multiple providers. From an employer's perspective, you administer only your own plan. You can't bar employees from having another 401k elsewhere, but you can educate staff on coordinating their contributions to avoid problems.

A mid-market company (200 to 2,000 employees) that acquires or spins up multiple US entities can inadvertently create a controlled group, which can require treating employees across entities as one employer for retirement plan compliance testing, according to Teamed's entity-structure risk notes for UK/EU groups hiring in the US.

Contribution Limits When You Have Multiple 401k Plans

The employer-side annual additions limit (which caps total contributions to a participant's 401(k) from employee and employer sources within a single plan) is indexed annually and is materially higher than the employee elective deferral limit, reaching $72,000 in 2026, according to Teamed's 2026 global rewards brief for companies hiring in the US. Understanding how these limits interact across multiple plans is where most confusion lives.

Employee contributions face one aggregate ceiling. For 2026, the IRS sets this limit at $24,500 for employees under age 50, $32,500 for employees age 50 and older with standard catch-up contributions, and $35,750 for employees ages 60-63 under the enhanced SECURE 2.0 catch-up provisions. This ceiling applies across all 401(k), 403(b), and similar workplace plans an employee participates in during the calendar year. If you contribute $15,000 to one employer's plan, you can only contribute $9,500 to another employer's plan before hitting the limit.

Employer contributions work differently. An employer matching contribution is a 401(k) contribution made by an employer based on an employee's elective deferrals, typically defined by a plan formula and subject to plan and IRS limits. These employer contributions are tested within each employer's plan, up to separate plan-level caps. Two unrelated employers can each make substantial employer contributions to an employee's accounts without those contributions being aggregated.

A controlled group is a set of related entities under common ownership that the IRS treats as a single employer for certain retirement plan compliance rules, which can change how contribution limits and testing apply across companies. If your UK parent company owns 80% or more of your US subsidiary, and that subsidiary owns 80% or more of another US entity, you may have a controlled group situation. This collapses the perceived advantage of multiple plans because the IRS treats the group as one employer for contribution limit purposes.

The SECURE 2.0 Act introduced mandatory Roth catch-up contributions for higher earners. Beginning January 2026, employees age 50 or older who earned more than $150,000 in FICA wages from the sponsoring employer in the prior year must make catch-up contributions on a Roth (after-tax) basis rather than pre-tax. If one of your plans doesn't offer Roth contributions, those high-earning employees effectively cannot make catch-up contributions to that plan at all.

Employees must track their total contributions across all plans. Each employer sees only its own payroll and has no visibility into what an employee contributes elsewhere. Despite these higher limits, only 14% of workers maximized their 401(k) contributions in 2024. This creates a coordination challenge that falls primarily on the employee, though employers can help through clear communication.

How Multiple 401k Accounts Affect Mid Market Companies With US Employees

Most articles answering "Can you have more than one 401(k)?" omit the employer-side controlled-group risk that arises when UK/EU headquartered companies operate multiple US entities and accidentally trigger single-employer retirement plan compliance treatment. This gap matters because the consequences affect plan design, contribution limits, and annual testing requirements.

From a compliance and governance perspective, employers must operate their own plan correctly with clear contribution limits and processes. You're not responsible for monitoring an employee's external plan totals, but you are responsible for ensuring your plan documents, payroll systems, and employee communications are accurate.

Payroll operations require configuration for deferrals, employer match calculations, and catch-up contribution handling. If you have employees who split time across roles or entities within your group, the complexity increases. Your payroll team needs to understand whether those entities form a controlled group and how that affects contribution calculations.

Employee communication becomes critical. Explain your plan features and participant responsibilities clearly. Provide neutral guidance for staff with multiple accounts without crossing into individual tax or investment advice. The boundary matters: you can explain how your plan works and remind employees they're responsible for tracking their total deferrals across plans, but you shouldn't recommend specific actions about their external accounts.

US retirement plan compliance cycles for employers typically include annual nondiscrimination testing and annual Form 5500 filing (for applicable plans), creating recurring compliance workload that should be costed into US expansion budgets by CFO teams, according to Teamed's US entity versus EOR cost modelling framework.

For regulated sectors like financial services, healthcare, and defence, missteps carry regulatory and reputational consequences beyond the immediate tax implications. A compliance failure in your 401k plan can create audit triggers and board-level questions that distract from your core business.

What European Mid Market Companies Need To Know About US 401k Rules

For EU and UK headquartered companies, cross-border employment models must account for local mandatory benefits and worker protections, which cannot be replaced by US-style voluntary benefits like a 401(k) for non-US employees. The 401k is a US-specific vehicle that serves a similar purpose to UK workplace pensions or EU occupational schemes, but the legal framework, terminology, and administration differ substantially.

US employees expect a 401k with an employer contribution, particularly in knowledge-based and regulated sectors. When you're competing for senior talent in the US market, offering a competitive 401k with meaningful employer matching isn't optional. It's table stakes.

Employee mobility creates multiple-account situations naturally. Mid-career US hires often bring legacy 401ks to a new European employer's US team. A VP of Engineering you're recruiting from a competitor probably has retirement accounts from two or three previous employers. Understanding this context helps you have informed benefits conversations during hiring.

Setup options vary in control, cost, and complexity. You can establish a bespoke 401k with a local provider, join a pooled employer plan (PEP), or hire via an employer of record with a master 401k arrangement. Each approach has tradeoffs. A bespoke plan gives you maximum control but requires more administrative infrastructure. An EOR arrangement can get you started quickly but limits your ability to customise plan design.

An Employer of Record (EOR) is a third-party organisation that becomes the legal employer of workers in a given country and runs payroll, tax withholding, and statutory employment compliance while the client company directs day-to-day work. For companies testing the US market before committing to entity establishment, an EOR can provide 401k access without the overhead of sponsoring your own plan.

Avoid copy-paste templates. Map US retirement rules to your global employment model and European governance standards. The 401k decision should sit within your broader strategy for US expansion, not be treated as an isolated benefits checkbox.

How UK And EU Employers Should Communicate 401k Rules To Staff With More Than One Plan

Most consumer-focused explanations fail to tell CFOs and Legal teams that an employer generally cannot see an employee's contributions to another employer's 401(k), so the control mechanism is employee communication and payroll process design rather than enforcement. This reality shapes how you should approach 401k communications.

During onboarding, explain what your company 401k offers, the plan-level limits, and that employees must coordinate their own totals across other plans. Be clear about boundaries: you're providing information about your plan, not individual tax or investment advice. Signpost plan documents, recordkeeper resources, and independent advisers for questions beyond your scope.

Core messages to communicate include the fact that total annual employee deferrals across all workplace plans are capped by IRS rules, and exceeding those limits creates tax and administrative problems that fall on the employee to resolve. Employees who change jobs mid-year or hold two jobs face the highest risk of accidental over-contribution.

Common questions you'll encounter include scenarios involving two jobs, side businesses, and legacy plans from previous employers. Provide high-level information on contribution rules, rollover options, and consolidation possibilities without recommending specific actions. The distinction matters: "Here's how rollovers work" is appropriate; "You should roll your old 401k into our plan" crosses into advice territory.

Employee mobility between the UK/EU and the US commonly results in employees holding multiple retirement accounts concurrently (for example a UK pension plus a US 401(k)), which increases employee demand for clear benefit communications during relocation and return-to-Europe scenarios, according to Teamed's global mobility policy templates.

Use consistent HR policy wording, manager talking points, and benefits decks so staff receive the same messages regardless of who they ask. Teamed can help craft compliant template wording, interpret cross-border considerations at a policy level, and decide what belongs in internal documentation versus external advice.

Pros And Cons Of Having Multiple 401k Accounts

Having multiple 401(k) accounts differs from having multiple 401(k) plans in that an employee can hold multiple accounts from past employers without actively contributing, while active contributions across plans must still respect the single annual elective deferral limit per individual.

For individuals, multiple accounts can provide access to multiple employer contributions when holding more than one job. Different plan menus and providers allow for tailored investment approaches across accounts. Self-employment plans like Solo 401ks can increase total retirement saving within IRS rules. Some people view diversification across providers and custodians as a risk management approach.

The downsides are real. More accounts mean more administrative complexity, more logins, and less holistic visibility of your retirement picture. Combined fees across multiple plans often exceed what you'd pay with consolidated accounts. Small or old accounts get forgotten, and the risk of accidental over-contributions increases when you're not tracking totals carefully.

From an employer perspective, staff can have multiple accounts, but your plan should remain simple to operate and clear to understand. Lean mid-market HR teams don't have bandwidth for complex plan administration or fielding endless questions about how your plan interacts with employees' external accounts. Design for clarity.

What To Do With Multiple 401k Accounts From Previous Jobs

A rollover is a transfer of retirement assets from one qualified plan (such as a prior employer 401(k)) to another qualified plan or IRA that is intended to preserve tax-deferred status when done under IRS rules. Understanding rollover options helps employees make informed decisions about their old accounts.

Many 401(k) plans permit participants to keep assets in a prior employer's plan after termination, but plan-level rules often impose minimum balance thresholds for automatic cash-outs and may force distributions below that threshold, according to Teamed's retirement-plan vendor due diligence questions.

Employees generally have four options for old 401k accounts. They can leave the money in the old employer's plan if permitted, which maintains access to institutional funds but reduces control and adds another account to track. They can roll the balance into their current employer's 401k, which simplifies oversight but depends on the current plan's fees, investment options, and willingness to accept rollovers. They can roll into an IRA, which provides broad investment choice and consolidation but involves different fee structures and protections. Or they can cash out, which is usually the least favourable option for retirement savings due to taxes and potential penalties.

HR can explain rollover processes and point employees to plan resources while clarifying that the choice belongs to the employee. Keep a list of former plans and use official tools to trace lost accounts if needed.

Common Mistakes With Multiple 401k Plans And How To Avoid Overcontributing

Over-contributing to 401(k) elective deferrals across two employers generally requires corrective distributions by a tax deadline to avoid double taxation outcomes, and the risk is highest for employees who change jobs mid-year or hold two jobs, according to Teamed's People Ops playbook for US onboarding.

The most common mistake is not tracking total employee deferrals across plans. Employees should keep a running year-to-date total and adjust elections when starting or leaving jobs. This sounds obvious, but it's easy to forget when you're focused on a new role.

SECURE 2.0 catch-up rules create new complexity. Employees need to confirm Roth availability and catch-up features in each plan before setting deferrals. If one plan doesn't offer Roth contributions, high earners over 50 may find themselves unable to make catch-up contributions to that plan at all.

Assuming a Solo 401k and employer 401k allow duplicating the full employee limit is another frequent error. The employee deferral limit is shared across all plans. Consult a tax professional for coordination.

Ignoring controlled group status across related companies creates compliance risk. Assess ownership relationships and treat group testing and limits appropriately. Missing plan communications about Roth, catch-up, and payroll setup changes leads to confusion. Read plan notices and contact the recordkeeper with questions.

If you suspect an over-contribution has occurred, consult tax and plan professionals promptly for correction steps. The IRS provides mechanisms for correcting excess deferrals, but the deadlines matter.

For employer governance, include contribution guidance in onboarding and handbooks, train HR and payroll on multi-plan scenarios and controlled groups, and review plan documents and provider updates regularly.

Building A Confident 401k Strategy For Scaling Companies With US Teams

In Teamed's operational experience supporting mid-market global hiring, the most common internal failure mode for multi-entity groups is inconsistent benefits eligibility and plan enrolment rules across entities, which increases HR casework volume and audit readiness risk, according to Teamed's global employment operations reviews.

A confident 401k strategy includes clear plan design aligned to your growth stage, whether that's EOR versus entity or pooled employer plan versus bespoke arrangement. It requires governance that anticipates controlled groups and regulatory change. Your payroll and processes need to be ready for multi-plan employees and catch-up/Roth handling. Consistent communications set employee responsibilities clearly. And you need pathways for consolidation or transition as the company scales.

Most generic guides do not give People Ops teams a practical policy position for job-changers and dual-employed staff, such as onboarding declarations and payroll cut-off procedures to reduce over-contribution corrections. This gap leaves mid-market companies making it up as they go.

The bigger challenge for scaling firms isn't whether individuals can hold multiple 401k accounts. It's building a plan that's legally robust, administratively manageable, and easy for employees to understand. Your 401k choices should sit within your wider employment model: EOR versus entity, when to introduce a bespoke plan, and how to handle staff who work across group entities.

Mid-market companies often lack in-house global retirement expertise. A strategic partner can interpret US rules through European governance and risk lenses. Don't rely on search snippets or vendor pitches for complex questions. Talk to the experts for tailored guidance on how 401k strategy fits your broader cross-border employment decisions.

FAQs About Having More Than One 401k

How long does it usually take to consolidate multiple 401k accounts?

Timelines vary by providers and plan types. Transfers can range from a few days to several weeks depending on the sending and receiving institutions. Employees should confirm processing steps and expected timing with both old and new plan administrators. Funds don't move instantly, so allow for verification and settlement periods.

Does having more than one 401k affect 401k loan eligibility?

Loan rules are set by each individual 401k plan. Having multiple accounts doesn't automatically increase borrowing capacity. Participants must follow the loan policy of the specific plan they borrow from, and not all plans permit loans.

Can you keep a 401k if you leave the US and move back to Europe?

Many people can leave their 401k in place after moving abroad. The account continues to exist and can remain invested. Tax treatment and withdrawal rules become more complex for non-US residents, so check US rules and seek local European tax advice before making changes.

How do 401k plans interact with European pension schemes?

US 401k plans and European pensions are governed by different legal systems and usually coexist rather than merge. You can hold both simultaneously. Cross-border tax treatment can be complex, and employers and employees should seek specialist advice when coordinating retirement benefits across jurisdictions.

How should a mid-market employer document 401k guidance in internal policies?

Include a clear summary of your company 401k, contribution rules, and employee responsibilities in benefits materials. State that information is not personal financial advice and signpost staff to independent advisers and plan resources. Consistency across all HR documentation reduces confusion and support tickets.

What is mid market?

Mid-market in Teamed's context refers to companies with roughly 200 to 2,000 employees or revenue around £10 million to £1 billion. Teamed's advisory model is built for organisations of this scale rather than very small businesses or global enterprises with dedicated in-house retirement benefits teams.