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Solo 401(k) Guide
A Solo 401(k) is designed for self-employed individuals with no full-time employees (other than a spouse), offering significantly higher contribution limits than a standard IRA.
Who Qualifies
Available to sole proprietors, freelancers, and small business owners with no employees other than a spouse — a genuinely powerful retirement savings vehicle for self-employed individuals given its high contribution limits.
Contribution Structure
| Contribution Type | 2025 Limit |
|---|---|
| Employee contribution | $23,500 ($31,000 age 50+) |
| Employer contribution (as business owner) | Up to 25% of compensation |
| Combined total | Up to $70,000 |
Why the Dual Contribution Structure Matters
As both "employee" and "employer" in your own business, you can contribute in both capacities — this is what allows Solo 401(k) contribution limits to significantly exceed standard IRA limits.
Common Mistakes
Not understanding the plan must be established by year-end to make contributions for that tax year (though actual contributions can sometimes be made until the tax filing deadline) — timing matters for solo 401(k) setup.
Frequently Asked Questions
Self-employed individuals and small business owners with no full-time employees other than a spouse are eligible.
Significantly more — up to $70,000 combined (employee + employer contributions) in 2025, compared to $7,000-$8,000 for a standard IRA.