Solo 401(k)

The plain answer

A Solo 401(k) is a workplace retirement plan for a business owner with no eligible employees other than the owner and, in many plans, the owner’s spouse. It is also called an individual 401(k) or one-participant 401(k).

You can contribute in two roles: as the employee through an elective deferral and as the employer through a business contribution. This two-part structure can make the plan useful for an owner-only business.

How it actually works

For 2026, the employee elective deferral limit is $24,500. A participant age 50 or older may be eligible for a $8,000 catch-up contribution. For ages 60 through 63, the higher catch-up amount is $11,250. The age 60 through 63 amount replaces the standard age 50 catch-up for an eligible participant; the two catch-up amounts are not added together.

The business may also make an employer contribution based on compensation and the rules for its business structure. Employee deferrals and employer contributions are different contribution sources, but both generally count toward the plan’s overall additions limit. The 2026 overall additions limit is pending in the site’s limits data, so it is not stated here.

The employee elective deferral limit applies to you across your 401(k) and similar workplace plans, not separately to each job or business. If you also participate in an employer’s plan, coordinate your deferrals across both plans.

What this means for you

A Solo 401(k) may fit when you have self-employment income, no eligible non-owner employees, and want access to both employee and employer contribution methods. A spouse who works for the business may also be able to participate, depending on the plan and compensation.

The plan requires more administration than an IRA. You need plan documents, contribution records, attention to deadlines, and potentially annual reporting after the plan reaches the applicable filing threshold. Hiring an eligible employee can also change whether the owner-only arrangement still works.

Common mistakes

• Assuming each job provides a separate employee elective deferral limit.
• Adding the standard age 50 catch-up to the higher age 60 through 63 catch-up.
• Confusing the employee deferral with the employer contribution calculation.
• Contributing based on gross revenue instead of the compensation definition that applies to the business.
• Missing plan establishment, contribution election, funding, or reporting deadlines.
• Continuing to treat the plan as owner-only after hiring an eligible employee.

Related pages

• Retirement accounts for freelancers
• How a 401(k) works
• How an IRA works
• The order of operations for your money