Solo 401(k)

A Solo 401(k) is similar to an employer-sponsored 401(k), except the account holder must be self-employed with no other employees and acts as both the employee and employer.

At a Glance

What should you know about a self-directed Solo 401(k)?

Tax Benefits

One of the advantages of having a Solo 401(k) is that you can include pre-tax benefits of a Traditional IRA and/or post-tax benefits of a Roth IRA into a single plan.
Similar to a Traditional IRA, Solo 401(k)s can feature the pre-tax benefits in which contributions are deducted from income for tax purposes.
Similar to a Roth IRA, Solo 401(k)s can also feature the post-tax benefits in which distributions can be tax free.

Other Benefits

Getting Started

What Solo 401(k) plans does NDTCO offer?

Full Service

For business owners who are looking to adopt a prototype Solo 401(k) plan for themselves, and they plan on holding their assets at NDTCO, this option incorporates both the adoption plan rental and the bookkeeping services below. 

Adoption Rental

This plan is for business owners looking to adopt a prototype (pre-approved by the IRS) plan for themselves only and want the plan administration to occur independently of NDTCO. Spouses can be added if they work for the company covered by the plan.

Bookkeeping Only

This option is for business owners who already have a 401(k) plan document outside of NDTCO, but would like NDTCO to hold the assets and provide recordkeeping, such as statements reflecting the account value that can be provided to the plan administrator.

Distribution Rules

What should you know about Solo 401(k) distributions?

Minimum Distribution Facts

Early Distribution Facts

For Roth funds in a Solo 401(k), contributions and conversions are not subject to taxes or early withdrawal penalties as the taxes have already been paid. Earnings or growth within the plan may be subject to taxes and early withdrawal penalties.
For non-Roth funds in a Solo (401)k, contributions and conversions are subject to early withdrawal penalties and income tax.

Getting Started

How do you fund your Solo 401(k) account?

Contributions

As an employee, you can contribute 100% of your compensation up to $23,000 in 2024. As an employer, you can contribute 25% of compensation up to $46,000 in 2024.

This brings the total annual limit for 2024 to $69,000, plus an additional $7,500 (in employee contributions) for Solo 401(k) holders age 50 or above.

Transfers

Solo 401(k)s can only be transferred to other 401(k)s or back and forth between Solo 401(k) and employer accounts.

Rollovers

The following account types can be rolled to or from a Solo 401(k): Traditional IRA, SEP IRA, and SIMPLE IRA (if the SIMPLE has been open at least two years).

Roth IRAs cannot be rolled into a Solo 401(k); however, Roth 401(k) funds can be rolled into a Roth IRA. Outside of Roth IRAs, any other type of qualified money can be rolled into a Solo 401(k).

Other Investments

ROI is everywhere if you know where to look

No financial advisor knows you better than yourself. With a Solo 401(k), you have the freedom to invest your tax-advantaged retirement funds in the assets you’re most passionate about.

From real estate to startups to small businesses, if you can find it, we will help you fund it.