What is a Solo 401(k)?
A Solo 401(k) is a retirement plan specifically designed for self-employed individuals or small business owners with no employees, except for a spouse. This plan offers the same benefits as a traditional 401(k), such as tax-deferred growth of contributions, but has simplified administration and is cost-effective due to having fewer employees.
How does a Solo 401(k) differ from a traditional 401(k)?
- Designed for solo entrepreneurs & small business owners: Solo 401(k) plans empower small business owners with no full-time employees and self-employed individuals to maximize their retirement savings.
- Dual contribution: A Solo 401(k) allows you to contribute as both the employee and the employer. This dual contribution can lead to higher potential retirement savings and tax benefits.
- Testing and compliance: Solo 401(k) plans follow slightly different testing and compliance requirements, and plan holders will need Form 5500-EZ.
SEP vs Solo 401(k)
| SEP | Solo 401(k) |
| Lower contribution potential | Higher contribution potential |
| Employer contributions only | Employer & employee contributions |
| No Roth contributions or loan options | Allows Roth contributions and loans (plan permitting) |
| Simpler to administer | Subject to more administrative oversight |
Do I Need An EIN?
EIN stands for Employer Identification Number, and we require you to provide one to sign up for a Solo 401(k) plan. If you do not have one, please obtain one here. We do not allow you to sign up using your SSN because this would appear in the public filings for the plan.
Contribution Limits
In 2025, for traditional (pre-tax) and Roth contributions, the annual limit is $23,500 per participant. Plus, any saver aged 50 and over can make an additional catch-up contribution of $7,500, bringing the maximum amount of annual deferrals they can make to $31,000.
In addition, individuals aged 60 to 63 can make higher catch-up contributions to their retirement plans, with limits increasing to $11,250.
Employers of incorporated businesses may contribute up to 25% of their compensation, and for unincorporated businesses, employers may contribute approximately 20% of their net self-employment income.
Combined contributions made by employers and employees have an annual limit of $70,000, $77,250 for individuals age 50 or older, and up to $81,250 for individuals aged 60 to 63.
You can learn more about contribution limits here.