The Fidelity Self-Employed 401(k) lets sole proprietors, freelancers, and single-member LLC owners contribute up to $70,000 in 2026 — significantly more than a SEP-IRA can deliver for many earners. You contribute in two roles at once: as an employee (up to $23,500) and as your own employer (up to 25% of net self-employment income). Fidelity charges no account fees and adds a Roth option that SEP-IRAs cannot match.
2026 Fidelity Solo 401(k) Contribution Limits
| Contribution Type | 2026 Limit |
|---|---|
| Employee deferral (traditional or Roth) | $23,500 |
| Catch-up, age 50–59 or 64+ | $7,500 additional |
| Super catch-up, age 60–63 (SECURE 2.0) | $11,250 additional |
| Employer profit-sharing | Up to 25% of net SE income |
| Annual additions limit (combined) | $70,000 |
| Annual additions + regular catch-up | $77,500 |
| Annual additions + super catch-up | $81,250 |
The $70,000 annual additions limit is set by IRS Section 415 and is the same limit that governs SEP-IRAs in 2026. However, the solo 401(k) beats the SEP-IRA for self-employed people earning under roughly $280,000 because the employee deferral component lets you shelter the first $23,500 of income regardless of your profit margin.
Employee vs. Employer Contributions Explained
Your solo 401(k) lets you wear two hats:
As the employee, you can defer up to $23,500 of your self-employment income in 2026. This is dollar-for-dollar — you can contribute the full $23,500 even if your net income is only $30,000. You can designate this as traditional (pre-tax) or Roth (after-tax).
As the employer, you can contribute up to 25% of your net self-employment income after the self-employment tax deduction. In practice, the effective rate is about 20% of gross self-employment income. These employer contributions are always pre-tax.
Worked Example: $80,000 Net SE Income
On $80,000 of net self-employment income in 2026:
- SE tax deduction: ~$5,652 (half of SE tax on $80,000)
- Adjusted income: $74,348
- Employer contribution (25%): $18,587
- Employee deferral: $23,500
- Total 2026 contribution: $42,087
A SEP-IRA would only allow ~$16,000 on the same income (20% × $80,000). The solo 401(k) delivers an extra $26,000 in tax-deferred space.
Roth Option at Fidelity
Fidelity is one of the few major brokerages offering a Roth designation for solo 401(k) employee deferrals. You pay tax now and your money grows tax-free — the same benefit as a Roth IRA, but with much higher contribution limits.
The Roth solo 401(k) is especially powerful if you expect to be in a higher tax bracket in retirement, or if you want to build tax-free income alongside pre-tax 401(k) and IRA balances. Employer profit-sharing contributions remain pre-tax only.
There are no income limits on Roth solo 401(k) contributions, unlike Roth IRAs where the 2026 phase-out begins at $150,000 (single) or $236,000 (married filing jointly).
Loans and Withdrawals
Fidelity allows loans from solo 401(k) accounts — you can borrow up to 50% of your vested balance or $50,000, whichever is less. The loan must be repaid within five years with reasonable interest. Loans have no taxes or penalties as long as repayment terms are met.
Early withdrawals before age 59½ are subject to ordinary income tax plus a 10% penalty, with limited exceptions (disability, substantially equal periodic payments under Rule 72(t), and others).
How to Open a Fidelity Solo 401(k)
- Confirm eligibility — You need self-employment income and no full-time employees (a spouse may participate)
- Establish by December 31 — The plan must be adopted by December 31, 2026 to shelter 2026 income; you cannot open retroactively for a prior year
- Apply online at Fidelity.com — Select “Self-Employed 401(k)” under small business accounts; it takes about 20 minutes
- Sign the adoption agreement — Fidelity provides the plan document at no cost
- Fund the account — Transfer money or rollover from a prior 401(k) or IRA
- Choose investments — Access Fidelity’s full lineup including ZERO expense ratio funds
Employee deferrals for 2026 must be made by December 31, 2026. Employer profit-sharing contributions can be made up to your tax filing deadline plus extensions — October 15, 2027 for 2026 if you file an extension.
What You Can Invest In
Fidelity’s solo 401(k) gives you access to nearly all investments on the platform:
- Fidelity ZERO funds — ZERO expense ratio index funds (FZROX, FZILX, FZIPX, FXNAX)
- ETFs — Full ETF marketplace with no commissions
- Stocks and bonds — Individual securities with $0 commissions
- Mutual funds — Thousands of funds including non-Fidelity options
- Options — Available for more advanced strategies
This breadth of investment options sets Fidelity apart from Vanguard’s solo 401(k), which limits you to Vanguard funds only.
Form 5500-EZ: When You Need to File
When your solo 401(k) balance exceeds $250,000, the IRS requires you to file Form 5500-EZ annually. Fidelity provides the account value figures you need. The form is due July 31 of the following year. Missing this filing can result in substantial penalties.
Fidelity Solo 401(k) vs. SEP-IRA
| Feature | Fidelity Solo 401(k) | SEP-IRA |
|---|---|---|
| 2026 limit | $70,000 | $70,000 |
| Roth option | Yes (employee portion) | No |
| Loans | Yes | No |
| Best for lower earners | Yes (employee deferral helps) | Less efficient |
| Setup deadline | December 31 | Tax filing deadline + extension |
| Complexity | Moderate | Simple |
If you earn under ~$280,000 and want Roth contributions or loan access, the solo 401(k) almost always wins. If you value simplicity above everything, the SEP-IRA at Fidelity is easier to set up and maintain.
Related Fidelity Retirement Guides
- Fidelity SEP-IRA 2026 — Limits, Setup & Comparison
- Fidelity Backdoor Roth IRA 2026 — Step-by-Step Guide
- Fidelity Traditional IRA 2026 — Rules, Limits & Tax Deduction
- Fidelity Roth IRA 2026 — Rules, Limits & How to Open
- Fidelity Investments — Complete Investor Guide 2026
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