Solo 401(k)
Complete Guide to Self-Employed Retirement Savings
What is a Solo 401(k)?
Solo 401(k)s, also known as Individual 401(k)s or Self-Employed 401(k)s, are retirement savings plans designed for self-employed individuals or small business owners with no employees other than a spouse.
Key Features
Solo Participation
No W2 employees (You may W2 your spouse)
Higher Contributions
Employer + Employee contributions for higher limits
Diverse Investments
Real Estate, Stocks, bonds, mutual funds, etc.
Loan Option
Borrow 50% (up to $50,000) from the account
Roth Option
After-tax contributions with tax-free withdrawals
Admin Responsibilities
IRS compliance and reporting required yearly
2025 Contribution Limits
- $70,000 — under 50
- $77,500 — age 50–59 & 64+ (+$8,000 catch-up)
- $81,250 — age 60–63 (+$11,250 enhanced)
Complete Investment Control
Checkbook Control
Direct investment control via a special-purpose LLC
Broad Investment Options
Real Estate, stocks, bonds, mutual funds, private equity, and more
Prohibited Transactions
Must avoid IRS-prohibited transactions to maintain tax advantages
Loan Option
- Borrow up to $50,000 or 50% of vested balance
- 5-year repayment (longer for home purchase)
- Interest paid back into your 401(k)
Roth Option
- After-tax contributions
- Tax-free withdrawals in retirement
- Tax diversification strategy
FAQ
Frequently asked questions
Who qualifies for a Solo 401(k)?
Solo 401(k)s are designed for self-employed individuals and small business owners with no W-2 employees other than a spouse.
How much can I contribute to a Solo 401(k) in 2025?
For 2025 the limits are $70,000 under age 50, $77,500 for ages 50–59 and 64+, and $81,250 for ages 60–63, combining employee and employer contributions.
Can I borrow from my Solo 401(k)?
Yes. You can borrow up to $50,000 or 50% of your vested balance, repaid over five years (longer for a home purchase), with the interest paid back into your account.
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