Solo 401(k) Plans

A Solo 401(k), often called a Solo K, is a one-participant 401(k) for a self-employed owner with no full-time employees other than a spouse. Independent (1099) contractors do not disqualify you. In 2026 it allows up to $72,000 in combined contributions ($80,000 at age 50 or older, $83,250 at age 60 to 63), a Roth option, and, when the plan is built for it, after-tax mega-backdoor Roth and self-directed investing. The off-the-shelf brokerage version rarely includes those features. A custom-designed plan does.

What a Solo 401(k) Actually Is

A Solo 401(k), also called a Solo K, Individual 401(k), or one-participant 401(k), is a full 401(k) plan built for a business with a single owner-employee, and optionally that owner's spouse. It carries the same high contribution limits and Roth features as a large-company plan, without the cost and complexity of covering a workforce. For a high-earning entrepreneur with no employees, it is often the single most powerful tax-advantaged savings vehicle available.

Who Qualifies, and Why Contractors Do Not Break It

You qualify if your business has no full-time common-law employees other than you and your spouse. The nuance most owners miss: independent contractors paid on a 1099 are not employees for this purpose. Many successful founders run lean businesses staffed entirely by outside contractors, agencies, and vendors, and they can still open a Solo 401(k). A working spouse can join the same plan and contribute on their own earnings, which can double the family's annual capacity.

The controlled-group trap

If you own a second business that does have employees, controlled-group and affiliated-service-group rules can pull those employees in and change what is allowed. This catches owners constantly. We check for it before we design anything.

2026 Contribution Limits

Because you contribute as both the employee and the employer, a Solo 401(k) reaches the full combined limit at a far lower income than most people expect.

  • Employee deferral: $24,500 (pre-tax or Roth)
  • Catch-up, age 50+: +$8,000, for $32,500 in deferrals
  • Super catch-up, age 60 to 63: +$11,250, for $35,750 in deferrals
  • Employer profit sharing: Up to 25% of net self-employment earnings (or W-2 wages for an S-corp)
  • Combined cap: $72,000; $80,000 with the age-50 catch-up; $83,250 at age 60 to 63
  • Compensation cap: $360,000

The Features That Make a Custom Solo K Powerful

The reason to design a plan rather than open a stock brokerage version is the feature set. The advanced strategies exist only if the plan document allows them.

Roth Solo 401(k)

Make your deferral on a Roth basis for tax-free growth and qualified distributions in retirement.

Mega-backdoor Roth

Contribute additional after-tax dollars up to the overall cap, then convert them to Roth. This can move tens of thousands more into the tax-free bucket each year, even when your income is far above the Roth IRA limit.

Self-directed investing

Hold real estate, private placements, and other alternatives inside the plan, where suitability allows.

Plan loans

Borrow from the plan within IRS limits when it genuinely fits the broader plan.

Most off-the-shelf Solo 401(k)s offered by brokerages omit after-tax contributions, in-plan conversions, and self-direction entirely. A custom plan is what unlocks them.

Why Plan Design Is the Whole Game

A Solo 401(k) is only as good as the document behind it. The same account at two providers can have very different capabilities depending on what the plan permits. We design the plan around your goals: maximize the deductible employer contribution, layer in Roth and mega-backdoor capacity, enable self-direction where it fits, and coordinate the whole thing with your broader tax and investment plan rather than treating it as a standalone product.

How We Help

We design, establish, and run custom Solo 401(k) plans for entrepreneurs without employees, and coordinate them with your tax strategy, your investments, and, where relevant, a defined benefit or cash balance plan layered on top. Schedule a Solo 401(k) review with Stefan to see what a plan designed around you could do.

Educational information only, not tax, legal, or investment advice. Contribution figures are 2026 limits and are subject to IRS cost-of-living adjustments. Eligibility and available features depend on your specific facts and plan document.

A Quiet Invitation

A Solo 401(k) lets a self-employed owner with no employees contribute as both employer and employee, often sheltering far more than a traditional plan. Let us help you set one up correctly and put its features to work. We do not believe in pressure or hard pitches. We believe in the right relationship with the right people at the right time.

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