If you're self-employed with no employees (other than a spouse), the Solo 401(k) is the most flexible high-cap retirement vehicle available. For 2026: $23,500 employee deferral + up to $46,500 employer profit share = $70,000. Add the age 50+ catch-up ($7,500) or the 60-63 super catch-up ($11,250) and you're up to $81,250. This calculator computes your specific maximum.
Four inputs. We'll compute your max Solo 401(k) and compare against SEP IRA.
Solo 401(k) is move #1 for retirement-savings owners. S-Corp election, Augusta Rule, Accountable Plan, QBI, Defined Benefit / Cash Balance — 60+ moves total, each with calculator + source link + implementation steps.
Solo 401(k) interacts with QBI optimization, SE tax planning, Roth conversions, and your Investment Policy Statement. A 15-minute Discovery Call walks through which moves apply. Free. No pitch.
Book a free 15-min call →A Solo 401(k) — also called a One-Participant 401(k) or Individual 401(k) — is a qualified retirement plan for self-employed people with no employees other than a spouse. It works like a corporate 401(k), with two contribution buckets:
The 20% employer contribution is NOT 20% of your gross SE income. It's 20% of "net earnings from self-employment" — defined as:
Net SE earnings = (Gross SE income × 0.9235) − (½ × SE tax)
≈ ~18.6% of gross SE income for typical owners
For S-Corps, the 25% is computed on W-2 wages directly — much cleaner.
SEP IRA is the older alternative. Simpler, but lower max for most owners.
| Feature | Solo 401(k) | SEP IRA |
|---|---|---|
| Employee deferral | $23,500 (2026) | $0 (no employee bucket) |
| Employer contribution | 20% net SE earnings (sole prop) | 20% net SE earnings (sole prop) |
| Catch-up (50+) | $7,500 | None |
| Super catch-up (60-63) | $11,250 | None |
| Roth option | Yes (employee bucket) | No |
| Loans allowed | Up to 50% of balance / $50K | No |
| Mega backdoor Roth | Possible if plan supports after-tax + in-plan conversion | No |
| Reporting (Form 5500-EZ) | Required at $250K+ balance | None |
| Best for | Owners who want max contribution + flexibility | Owners who want zero paperwork |
Most providers handle the heavy lifting; you sign a few forms.
The $23,500 employee deferral limit is per person, not per plan. If you already maxed via your W-2 job's 401(k), you've used your full employee deferral. But the EMPLOYER side at your Solo 401(k) is independent — you can still contribute up to ~18.6% of your SE income (sole prop) up to the $70K combined limit minus what your W-2 employer contributed for you.
Depends on current vs expected future tax rate. High earners (32%+ bracket) usually prefer Traditional for current deduction. Younger / lower-income / planning for higher rates later → Roth. Many plans allow split — e.g., $11,750 Traditional + $11,750 Roth in the employee bucket.
Yes, but only if your plan documents allow after-tax (non-Roth) employee contributions + in-plan Roth conversions. Fidelity/Schwab/Vanguard standard Solo 401(k)s typically do NOT. You need a specialty provider (Carry, MySolo401k, Solo401k.com) with a custom plan document. Worth it if you can fill: extra ~$46K of Roth space per year.
You either: (a) close the Solo 401(k) and roll to a "regular" 401(k) plan (allows employees), or (b) the new employee meets eligibility (typically age 21 + 1 year of service) and now your plan needs nondiscrimination testing + a TPA. Plan for this early — solo 401(k) is for solo only.
Yes — if your spouse is also a participant (paid SE income or W-2 wages from the business). Two participants → two sets of contribution limits → up to $140K-$160K of combined annual deferral capacity. Document spousal compensation as reasonable.
You can have both — the Defined Benefit plan adds another $100K-$300K+ of tax-deferred contribution capacity for owners 50+ with stable income. Combined Solo 401(k) + DB plan is the highest-cap retirement strategy for self-employed owners. Requires actuary + plan admin (~$2-5K/yr). Worth it at $500K+ profit.
Your Solo 401(k) capacity is constrained by W-2 wages. Employee deferral: $23,500 (or up to 100% of W-2). Employer profit share: 25% × $80K = $20K. Total: $43.5K. If you want to max at $70K, you'd need W-2 of at least $186K. Lots of S-Corp owners optimize their reasonable salary upward in years they want to max retirement.
Solo 401(k) is one of 60+ moves in the Good Deals owner workbook. Walk through what applies, see your annual + lifetime savings, and decide what to act on — all in 90 minutes with a CFA Charterholder + Investment Adviser.
Book the Foundation Review →$500 · 90 minutes · Credited toward an engagement if we work together · Refunded if we don't.
Good Deals is the planning workbook + advisory practice of Andrew Escher, CFA Charterholder + Investment Adviser Representative based in Austin, TX. Independent stack: Altruist for investment custody, BackNine for insurance placement, Good Deals for the planning layer that ties them together.
We work with solo professionals, agency owners, and business owners at $300K–$5M in revenue who want structural tax planning, an Investment Policy Statement, and a long-arc Roadmap — without the typical AUM-fee pitch.