Solo 401k Guide: Built for People Who Work for Themselves
You work for yourself—whether as a contractor, consultant, or small business owner. You don't have an employer matching your contributions. A Solo 401k lets you put away up to $70,000 a year ($77,500 if you're 50+). That's more than any IRA, and you can even borrow from it if you need to.
What is a Solo 401k?
A Solo 401k is a retirement plan for self-employed people with no employees (except maybe your spouse). It goes by other names—Individual 401k, Self-Employed 401k—but it's all the same thing.
Here's why the contribution limits are so high: you get to contribute as both the "employer" AND the "employee" of your own business. A regular IRA caps you at $7,000 a year. A Solo 401k lets you put away up to $70,000. If you've been working for yourself for years and feel behind on retirement savings, this is how you catch up.
Who Qualifies for a Solo 401k?
You Qualify If You Are:
- Freelancer or consultant
- Sole proprietor
- Single-member LLC owner
- Independent contractor
- Business with only spouse as employee
- Side hustler with self-employment income
You Don't Qualify If You Have:
- Full-time employees (other than spouse)
- Part-time employees working 1,000+ hours/year
- No self-employment income
Solo 401k Contribution Limits (2026)
The Solo 401k has the highest contribution limits of any self-employed retirement plan.
Under Age 50
Age 50 or Older
*25% of net self-employment income (20% of net profit after self-employment tax deduction for sole proprietors/LLCs)
Solo 401k vs SEP IRA
The Solo 401k offers significant advantages over a SEP IRA for most self-employed individuals.
| Feature | Solo 401k | SEP IRA |
|---|---|---|
| 2026 Max Contribution | $70,000 | $70,000 |
| Employee Deferrals | Yes ($23,500) | No |
| Catch-Up (50+) | Yes ($7,500) | No |
| Roth Option | Yes | No |
| Participant Loans | Yes (up to $50k) | No |
| Contribute More at Lower Income | Yes | No |
| Spouse Can Participate | Yes | Yes |
| Complexity | Moderate | Simple |
Solo 401k Benefits
High Contribution Limits
Contribute up to $70,000 (or $77,500 if 50+) annually—more than any other self-employed retirement plan.
Roth Option Available
Unlike SEP IRAs, Solo 401ks offer Roth contributions for tax-free growth and withdrawals.
Borrow From Your Plan
Take loans up to $50,000 or 50% of your balance—a feature not available with SEP IRAs.
Tax Deduction Now
Traditional contributions reduce your taxable income dollar-for-dollar in the year contributed.
Alternative Investments
With a self-directed Solo 401k, invest in real estate, crypto, private equity, and more.
Include Your Spouse
If your spouse works in the business, they can also participate and contribute.
Best Solo 401k Providers (2026)
Choose a provider based on your needs: simple investing, checkbook control, or alternative investments.
Rocket Dollar
Self-Directed
Best for alternative investments with checkbook control
Fidelity
Traditional
Free Solo 401k with traditional investment options
Vanguard
Traditional
Low-cost index funds with Solo 401k option
Solo 401k FAQ
What is a Solo 401k?
A Solo 401k (also called Individual 401k or Self-Employed 401k) is a retirement plan for self-employed individuals with no full-time employees other than a spouse. It offers high contribution limits, Roth options, and loan access.
What is the Solo 401k contribution limit for 2026?
For 2026, you can contribute up to $70,000 total ($77,500 if 50 or older). This includes $23,500 in employee deferrals plus employer contributions of up to 25% of net self-employment income.
Can I have a Solo 401k and a regular 401k?
Yes, but the $23,500 employee deferral limit is shared across all 401k plans you participate in. So if you max out a W-2 employer's 401k, you can only make employer contributions to your Solo 401k.
Is a Solo 401k better than a SEP IRA?
For most self-employed individuals, yes. Solo 401ks offer higher effective contribution limits at lower income levels, Roth options, and the ability to borrow from the plan—features SEP IRAs lack.
Can I invest in real estate with a Solo 401k?
Yes, with a self-directed Solo 401k from providers like Rocket Dollar. You can invest in rental properties, land, REITs, and other real estate while enjoying tax-advantaged growth.
When is the deadline to set up a Solo 401k?
You must establish the plan by December 31st of the tax year you want to make contributions for. However, you can make contributions until your tax filing deadline (including extensions).
Can my spouse participate in my Solo 401k?
Yes, if your spouse earns income from your business, they can participate in the Solo 401k and make their own contributions, potentially doubling your household's retirement savings.
Working for Yourself Shouldn't Mean Falling Behind
You took the risk of going independent. A Solo 401k lets you save for retirement like the big companies do—sometimes even better. If you've got self-employment income, this is one of the best tax breaks available.
Diversify Your Solo 401k with Gold
Many self-employed investors add precious metals to their Solo 401k for diversification and protection against market volatility.