How much can I contribute to a Solo 401(k) in 2026?

The total Solo 401(k) contribution limit in 2026 is $70,000 ($77,500 if age 50+). This comes from two contribution types: (1) Employee elective deferral: up to $23,500 (or $31,000 if age 50+), limited to 100% of net self-employment income; (2) Employer profit-sharing contribution: up to 25% of net self-employment income (20% of net self-employment income after the self-employment tax deduction for sole proprietors). Example: If you earn $100,000 in net self-employment income, you can contribute $23,500 as employee + ~$18,587 as employer = ~$42,087 total.

What is the difference between a Solo 401(k) and a SEP IRA?

Both are excellent for self-employed individuals, but they differ in structure and limits. A Solo 401(k) allows both employee and employer contributions, enabling higher total contributions at lower income levels. A SEP IRA only allows employer-type contributions (25% of compensation, max $70,000 in 2026). At incomes below ~$150,000, the Solo 401(k) typically allows higher total contributions than a SEP IRA. The Solo 401(k) also allows a Roth contribution option and loans; SEP IRA does not. The SEP IRA is simpler to set up and has fewer administrative requirements.

Where can I open a Solo 401(k) for free?

The best free Solo 401(k) providers in 2026 are: Fidelity (most comprehensive — traditional + Roth, loans, no fees), Schwab (no fees, no Roth option), Vanguard (no fees, limited to Vanguard funds), and TD Ameritrade/Schwab (now merged). E*TRADE also offers a strong free Solo 401(k). Avoid custodians that charge annual fees — many insurance companies charge $100–$300/year for Solo 401(k) administration. Self-directed Solo 401(k) providers (for alternative investments) charge fees but allow real estate, crypto, and other non-traditional assets.

What Is a Solo 401(k)? 2026 Guide — Rules, Limits, and Who Qualifies

Q: What is a Solo 401(k)?

A Solo 401(k) — also called an Individual 401(k) or Self-Employed 401(k) — is a retirement account available to self-employed individuals and small business owners with no full-time employees other than a spouse. It combines the features of a regular 401(k) with the flexibility of a self-employed plan. You can contribute both as an 'employee' (up to $23,500 in 2026) and as an 'employer' (up to 25% of net self-employment income), with a combined maximum of $70,000 in 2026. This makes it the highest-contribution retirement vehicle available to self-employed people.

Q: Who qualifies for a Solo 401(k)?

You qualify for a Solo 401(k) if you are self-employed with no full-time employees other than a spouse. This includes: freelancers, consultants, gig workers (Uber, DoorDash, etc.), sole proprietors, single-member LLC owners, and S-corp or C-corp owners who are the only full-time employee. You can qualify even if you have a W-2 job and a side hustle — the Solo 401(k) covers your self-employment income. Part-time employees (under 1,000 hours/year) generally do not disqualify you.

A Solo 401(k) is a retirement plan designed for self-employed individuals and small business owners with no full-time employees other than a spouse. In 2026, you can contribute up to $70,000 per year ($77,500 if age 50+) — making it one of the most powerful retirement accounts available to freelancers, consultants, and gig workers. You contribute both as an “employee” (salary deferral) and as an “employer” (profit-sharing), capturing the full tax benefit of both roles.

Quick answer: If you’re self-employed and want to maximize retirement savings, the Solo 401(k) is almost always the best choice — it allows higher contributions at lower income levels than a SEP IRA, offers a Roth option, and is free to open at Fidelity or Schwab.

Who Qualifies for a Solo 401(k)?

You qualify if you:

Are self-employed — sole proprietor, freelancer, contractor, gig worker, consultant
Have no full-time employees (other than a spouse) — “full-time” typically means 1,000+ hours/year
Have earned self-employment income — from 1099 work, Schedule C income, or as an S-corp owner

Can I have a Solo 401(k) AND a regular W-2 job? Yes. Your Solo 401(k) covers only your self-employment income. If you also have a W-2 job with a 401(k), the combined employee deferrals across all accounts cannot exceed $23,500 (the annual IRS limit), but your employer profit-sharing contribution from your Solo 401(k) is separate.

2026 Solo 401(k) Contribution Limits

Contribution Type	2026 Limit	Rule
Employee elective deferral (under 50)	$23,500	100% of net self-employment income, max $23,500
Employee catch-up (age 50+)	$7,500	Additional $7,500; total $31,000
Super catch-up (ages 60–63)	$11,250	Instead of standard catch-up; total $34,750
Employer profit-sharing	Up to 25% of compensation	20% of net SE income for sole proprietors
Total combined (under 50)	$70,000	Employee + employer
Total combined (age 50+)	$77,500	With standard catch-up
Total combined (ages 60–63)	$81,250	With super catch-up

How to Calculate Your Solo 401(k) Contribution

For sole proprietors / single-member LLCs:

$$\text{Net SE Income} = \text{Schedule C Profit} - \text{Half of SE Tax}$$ $$\text{Max Employer Contribution} = \text{Net SE Income} \times 20%$$ $$\text{Total Contribution} = \text{Employee Deferral} + \text{Employer Contribution} \leq $70,000$$

Worked example: James earns $120,000 net on Schedule C.

SE tax: $120,000 × 92.35% × 15.3% = $16,955; half = $8,477
Net SE income after SE deduction: $120,000 − $8,477 = $111,523
Employer contribution (20%): $111,523 × 20% = $22,305
Employee deferral: $23,500 (full amount)
Total 2026 contribution: $22,305 + $23,500 = $45,805

Compare to SEP IRA for the same person: $111,523 × 25% = $27,881 maximum — significantly less than the Solo 401(k).

Solo 401(k) vs. SEP IRA vs. SIMPLE IRA

Feature	Solo 401(k)	SEP IRA	SIMPLE IRA
2026 contribution limit	$70,000	$70,000	$16,500
Employees allowed	Spouse only	Any employees	Up to 100 employees
Roth option	Yes (at Fidelity, E*TRADE)	No	Yes
Loan provision	Yes	No	No
Annual filing	Form 5500-EZ (if assets >$250K)	None	None
Setup deadline	December 31 of tax year	Tax filing deadline	October 1 of tax year
Contribution deadline	Employee: December 31; Employer: tax filing deadline	Tax filing deadline	Tax filing deadline
Best for	Self-employed, no employees	Simplicity, higher income	Small businesses with staff

Solo 401(k) Roth Option

Many custodians (Fidelity, E*TRADE) allow Roth Solo 401(k) contributions — you make after-tax employee deferrals that grow tax-free. The limit is the same ($23,500 employee total between traditional and Roth combined).

Unlike a Roth IRA, a Roth Solo 401(k) has no income limit — high earners who exceed the Roth IRA income phase-out ($161,000 single / $240,000 married in 2026) can still make Roth contributions via the Solo 401(k).

Where to Open a Solo 401(k) in 2026

Provider	Roth Option	Loan	Annual Fee	Investment Options
Fidelity	Yes	Yes	$0	All Fidelity funds + individual stocks
E*TRADE	Yes	Yes	$0	ETFs, stocks, funds
Schwab	No	No	$0	Schwab funds + ETFs
Vanguard	No	No	$0	Vanguard funds only
TD Ameritrade (now Schwab)	Yes	Yes	$0	Wide range

Best overall: Fidelity — offers both Roth and loan provisions with no fees and the widest investment selection.

How to Open a Solo 401(k) — Step by Step

Confirm eligibility — you have self-employment income, no full-time W-2 employees
Choose a custodian — Fidelity recommended for full features
Download the plan documents — the custodian provides a pre-approved plan document (IRS Form 5305-A or similar)
Open account — online application takes 10–30 minutes; need SSN/EIN and self-employment income estimate
Get an EIN — if you don’t have one, apply free at IRS.gov (takes minutes)
Fund the account — calculate your allowable contribution and transfer funds
File Form 5500-EZ if account balance exceeds $250,000 (due July 31 after each plan year)

Setup deadline: You must establish the plan by December 31 of the tax year. You then have until your tax filing deadline (including extensions, typically October 15) to make the employer profit-sharing contribution.

Solo 401(k) and the Mega Backdoor Roth

Some Solo 401(k) plans allow after-tax (non-Roth) employee contributions beyond the regular $23,500 deferral — up to the $70,000 total limit — which can then be converted to Roth. This is the Mega Backdoor Roth strategy, and it’s easier to execute in a Solo 401(k) than in most employer plans because you control the plan document.

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

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