Choosing the Best Solo 401k Providers for Your Retirement

Fidelity Investments offers a solo 401k plan with no setup fees and no annual maintenance fees for plans with less than $250,000 in assets.

If you're self-employed or have a small business, you know how important it is to save for retirement. However, navigating the world of solo 401k providers can be overwhelming.

Vanguard offers a solo 401k plan with low fees and a wide range of investment options, including index funds and ETFs.

To make the right choice, you'll want to consider factors like fees, investment options, and customer service.

You can set up a solo 401(k) plan through a financial institution that administers 401(k) plans. These plans are simpler to administer than a standard 401(k) and often come with lower fees.

Look for a plan that offers a wide range of investment options, including mutual funds, stocks, bonds, ETFs, and CDs. This will give you flexibility in choosing how to grow your retirement savings.

Some institutions offer online tools or telephone assistance to help you pick the right mix of investments for your plan. This can be a big help if you're not sure where to start.

There is no annual minimum contribution requirement for a solo 401(k) plan, so you can adjust your contributions as needed. This can be a big advantage if your business has variable income.

If your account's year-end balance is more than $250,000, you might be required to file one of the IRS 5500 series forms for tax reporting. It's a good idea to check with the IRS or a tax professional to confirm your obligations.

You can set up a self-employed 401(k) plan through a financial institution that administers 401(k) plans. These plans are simpler to administer and often have lower fees, with some institutions not charging setup or maintenance fees.

Fees for self-employed 401(k) plans can be relatively low, and some institutions may not charge any setup or maintenance fees. Make sure to review potential plans and understand all applicable fees before signing up.

A self-employed 401(k) plan can offer a wide range of investment options, including mutual funds, stocks, bonds, ETFs, and CDs. Some institutions also provide online tools or telephone assistance to help you choose the right investments.

You can increase contributions in good years and save less during times when you need more cash for your business, since there is no annual minimum contribution requirement.

To be eligible for a solo 401(k), you must be a business owner with no employees. This means you can't have any staff or partners, just you running the show.

There are no age or income restrictions for a solo 401(k), so you can start saving for retirement at any time. However, you will need an employer identification number to open a solo 401(k) account.

You can open a solo 401(k) at many online brokers, as long as you have an employer identification number. This is a great option for solo workers who want to save for retirement without having to hire a financial advisor.

Here's a quick rundown of the eligibility requirements for a solo 401(k):

A solo 401k plan can be set up through a financial institution that administers 401k plans, which often involves no setup or maintenance fees.

You'll want to review potential plans carefully, looking for low fees and a wide range of investment options, such as mutual funds, stocks, bonds, ETFs, and CDs. Some institutions also offer online tools or telephone assistance to help you pick the right mix of investments for your plan.

Here are some key features to look for in a solo 401k plan:

With a self-employed 401(k) plan, you can invest in a wide range of funds, including mutual funds, stocks, bonds, ETFs, and CDs.

You can choose from a variety of investment options, such as mutual funds, to make your retirement savings go further.

Some institutions offer online tools or telephone assistance to help you pick the right mix of investments for your plan.

There is no annual minimum contribution requirement, so you can increase contributions in good years and save less during times when you need more cash for your business.

With a self-directed Roth Solo 401(k) or IRA, you can invest in a variety of areas, including private assets and real estate, giving you more control over your retirement savings.

You can invest in a broad range of funds or other resources to make your retirement savings go further, just like with a Solo 401(k) plan with 401GO.

If your account’s year-end balance is more than $250,000, you might be required to file one of the forms in the IRS 5500 series for tax reporting.

You have the flexibility to invest in areas outside of traditional stocks and bonds, making a self-directed account a great option for those who want more control over their investments.

The Solo 401(k) has some amazing features that set it apart from other retirement plans.

You can contribute a lot more to a Solo 401(k) compared to a traditional IRA. The contribution limit for a Solo 401(k) is up to $69,000 per year, or $76,500 for those 50 and older.

This is a huge difference from the IRA contribution limit of $7,000 per year as of 2024.

A solo 401(k) offers two tax options: traditional and Roth. With a traditional solo 401(k), contributions reduce your income in the year they're made, but distributions in retirement will be taxed as ordinary income.

The IRS has strict rules about tapping into your solo 401(k) money before age 59 ½, and you'll likely pay taxes and penalties on distributions before then.

Contributions to a Roth Solo 401(k) are made with after-tax dollars, meaning they don't reduce your taxable income in the year they're made.

Setting up a solo 401(k) plan is a relatively easy process that can usually be completed online or in a branch office of your brokerage.

You'll need to set yourself up as the plan administrator (employer) side and then treat yourself as a plan participant (employee) side, both of which can usually be managed through the same website.

To open a solo 401(k), you can use most online brokers, though you'll need an employer identification number. The broker will provide a plan adoption agreement for you to complete, as well as an account application.

You can typically make employer profit-sharing contributions until your tax-filing deadline for the tax year. If you want to make a contribution for this year, you must establish the plan by Dec. 31 and make your employee contribution by the end of the calendar year.

Fees for a self-employed 401(k) can be relatively low, with some institutions not charging any setup or maintenance fees. You may also want to look for a plan that offers a wide range of investment options, including mutual funds, stocks, bonds, ETFs, and CDs.

You'll need to keep detailed records of your plan, as there is no annual minimum contribution requirement. This means you can increase contributions in good years and save less during times when you need more cash for your business.

All the paperwork that comes with managing a 401(k) can be a headache, particularly when you run your own business. 401GO’s technology automates many of these processes so you can focus on your job.

If your account's year-end balance is more than $250,000, you might be required to file one of the forms in the IRS 5500 series for tax reporting.

When choosing between a Roth Solo 401(k) and a Traditional Solo 401(k), it's essential to consider the tax advantages of each plan.

Contributions to a Roth Solo 401(k) are made after-tax, but withdrawals are tax-free in retirement. In contrast, Traditional Solo 401(k) contributions are tax-deductible, but withdrawals are taxed as ordinary income in retirement.

A key difference between the two plans is the treatment of required minimum distributions (RMDs). Roth Solo 401(k) accounts do not have RMDs, whereas Traditional Solo 401(k) accounts have RMDs starting at age 73.

Profit-sharing contributions are another area where the two plans differ. Employer contributions to a Roth Solo 401(k) are pre-tax but taxed when withdrawn, whereas up to 25% of compensation is tax-deductible for the business with a Traditional Solo 401(k).

Here's a summary of the key differences between the two plans:

Ultimately, the choice between a Roth Solo 401(k) and a Traditional Solo 401(k) depends on your individual financial goals and circumstances.

With a solo 401k, you get access to a range of convenient tools and resources to help you manage your finances and plan for retirement. These perks include a mobile app, a retirement calculator, budgeting tools, a financial goal tracker, spending insights, and educational content.

One of the biggest advantages of the solo 401k is its high contribution limits. In fact, it offers significantly higher contribution limits compared to other retirement accounts. This flexibility lets you adjust contributions based on your income and business performance, helping you maximize your retirement savings potential.

The solo 401k also offers the ability to contribute both as an employee and an employer, allowing you to do the employee portion as a dollar earned to dollar earned portion instead of the percentage of income earned on the employer side. This can potentially increase the amount you can contribute overall.

Another benefit is the option to do both traditional and Roth contributions to maximize options for tax strategy. This flexibility is especially useful for those who want to take advantage of the tax-free growth of a Roth account while also contributing to a traditional account for tax deductions.

Here are some of the key benefits of the solo 401k:

With a Roth Solo 401(k), you can borrow up to 50% of your account balance or $50,000, whichever is less. Loans must be repaid within five years, offering financial flexibility without taxes or penalties if repaid on time.