Solo 401(k) Calculator

A Solo 401(k) — also called an Individual 401(k), Self-Employed 401(k), or i401k — is a retirement plan designed for self-employed individuals with no full-time W-2 employees other than a spouse. Eligible participants include sole proprietors, independent contractors, freelancers, consultants, single-member LLC owners, and partners in a partnership. You do not qualify if you have any common-law employees working more than 1,000 hours per year.

In 2024, a Solo 401(k) participant can contribute up to $69,000 combined ($76,500 if age 50 or older). This consists of two parts: (1) an employee elective deferral of up to $23,000 ($30,500 if 50+), and (2) an employer profit-sharing contribution of up to 25% of net self-employment compensation. Net SE compensation equals your net profit minus the deductible half of self-employment tax.

The profit-sharing contribution is 25% of your net self-employment compensation. Net SE compensation is calculated as: net profit − (self-employment tax × 50%). Self-employment tax itself is calculated as net profit × 0.9235 × 15.3% (with the Social Security portion capped at the $168,600 wage base in 2024). This calculation is automatically performed by our calculator when you enter your net business profit.

Yes. This is the key advantage of the Solo 401(k). You wear two hats as both employee and employer. As the employee, you can defer up to $23,000 (or $30,500 if 50+) regardless of your income level. As the employer, you can add up to 25% of net SE compensation. Together, these two buckets can total up to the §415 combined limit of $69,000 ($76,500 with catch-up).

Yes, if your Solo 401(k) plan document allows Roth deferrals — most modern plans do. The employee elective deferral portion (up to $23,000) can be designated as Roth (after-tax) or Traditional (pre-tax), or split between both. The employer profit-sharing contribution is always pre-tax (Traditional). There is no income limit for Roth Solo 401(k) contributions, unlike the Roth IRA.

Both are popular retirement plans for the self-employed, but the Solo 401(k) typically allows higher contributions at lower income levels. The SEP-IRA allows contributions of only 25% of net SE compensation — it has no employee elective deferral component. At an income of $60,000, a Solo 401(k) could allow $23,000+ in contributions while a SEP-IRA would be limited to around $11,000. At very high incomes (above ~$230,000), both plans hit the same $69,000 combined cap.

To make contributions for a given tax year, you must establish the Solo 401(k) plan by December 31 of that tax year. However, you have until your tax filing deadline (including extensions — typically October 15 for sole proprietors) to actually make the contributions for that year. This gives self-employed individuals considerable flexibility in timing their contributions.

Yes, but only when your plan assets exceed $250,000 at the end of the plan year. Below that threshold, no annual filing is required. Once assets exceed $250,000, you must file Form 5500-EZ (or Form 5500-SF) annually with the IRS. This is a relatively simple informational return and does not typically require professional preparation.

Yes. A spouse who earns income from the business — for example, as a co-owner or employee — can participate in the Solo 401(k). This effectively doubles the contribution capacity, allowing each spouse to make separate employee elective deferrals up to their respective limits. This is one of the most powerful wealth-building features of the Solo 401(k) for business-owning couples.

Unlike workplace 401(k) plans that restrict you to a preset fund menu, Solo 401(k) plans can allow a broad range of investments depending on the plan provider. Most custodians (Fidelity, Vanguard, Charles Schwab, TD Ameritrade) allow stocks, bonds, ETFs, and mutual funds. Self-directed Solo 401(k) plans offered by specialty providers can also hold real estate, private equity, precious metals, and other alternative assets.