This guide sifts through the 10 best solo 401k providers in 2023.
Retirement planning is often an overlooked aspect for freelancers and small businesses. With approximately 4000 weeks in a lifespan of 80 years, the serious consideration of retirement planning typically begins around the age of 30, based on my observations of those around me.
It’s imperative to aim for retirement by 60, allowing for a decade or two of well-deserved relaxation. In essence, we dedicate 30 years, or roughly 1500 weeks, towards accumulating wealth for our retirement from 30 to 60.
This highlights the critical nature of retirement planning, given the limited time frame. When I relocated to Canada last year, one of my initial priorities was choosing a good retirement plan. I researched and wrote about RRSP, TFSA, FHSA, CPP, which are the primary retirement and saving plans in Canada.
I also got interested in the retirement plans in the USA. Solo 401k is one such plan which, according to my research is best suited and a must have for small business owners and freelancers.
This guide lists the 10 best solo 401k providers in 2023, their fees and other charges, loan availability, Roth option availability, investment options offered and their pros and cons.
| Best solo 401k providers: Free options (features cannot be customized) | |||||
| Best Solo 401k providers | Investment options available | Annual Fees | Setup Fees | Loan availability | Roth option availability |
| E*Trade | A wide range of mutual funds, stocks, bonds, ETFs, and more | Zero | Zero | Yes | Yes |
| Fidelity | A wide range of mutual funds, stocks, bonds, ETFs, and more | Zero | Zero | No | No |
| Charles Schwab | A wide range of mutual funds, stocks, bonds, ETFs, and more | Zero | Zero | No | No |
| Vanguard | A wide range of mutual funds, stocks, bonds, ETFs, and more | Zero | Zero | No | Yes |
| TD Ameritrade | A wide range of mutual funds, stocks, bonds, ETFs, and more | Zero | Zero | No | No |
| Best solo 401k providers: Paid options (self-directed solo 401k providers-features can be customized as per the needs of the investors) | |||||
| Best Solo 401k providers | Investment options available | Annual Fees | Setup Fees | Loan availability | Roth option availability |
| My Solo 401k Financial | Stocks, bonds, ETFs and other alternative assets like real estate, precious metals, cryptocurrencies, private equities and other alternative assets | $125 | $525 | Yes | Yes |
| Rocket Dollar | Stocks, bonds, ETFs and other alternative assets like real estate, precious metals, cryptocurrencies, private equities and other alternative assets | Silver: $15 monthly Gold: $30 monthly | Silver: $360 one time setup fee Gold: $600 one time setup fee | Yes | Yes |
| Solo 401k by Nabers Group | Stocks, bonds, ETFs and other alternative assets like real estate, precious metals, cryptocurrencies, private equities and other alternative assets | $99 | $499 | Yes | Yes |
| Safeguard Advisors | Stocks, bonds, ETFs and other alternative assets like real estate, precious metals, cryptocurrencies, private equities and other alternative assets | Yes | Yes | ||
| Ubiquity | Stocks, bonds, ETFs and other alternative assets like real estate, precious metals, cryptocurrencies, private equities and other alternative assets | $19 per month | Zero | Yes | Yes |
When it comes to self-employed individuals and small businesses or freelancers, two retirement saving options are majorly considered solo 401k and Simple Employee Pension (SEP) plans.
Though there is little more paperwork and formalities required in a solo 401k plan compared to SEP, the prior gives few advantages over the latter. Check here for a detailed comparison of solo 401k vs SEP IRA.
Read here for “How to set up a solo 401k account“.
Read here for solo 401k contribution limits.
Read a detailed guide on the best crypto IRA providers here.
Table of Contents
Best Solo 401k Providers: For Self-Employed individuals and small businesses
What is a Solo 401K?
We know that a normal 401k is a tax-advantaged retirement savings account that is opened by one’s employer. But what about self-employed business owners?
For self-employed individuals, freelancers, business owners with no full-time employees, or small businesses with multiple owners, one of the best options to accumulate retirement wealth with tax advantages is solo 401k.
In case you are a business owner with some number of employees, then a SEP (Simplified Employee Pension) is the IRA you should go for. Solo 401k is not extendable to employees.
As said a solo 401k is similar to a normal 401k.
The main difference lies in the fact that, unlike normal 401k which can only be opened by your employer, solo 401k can be opened by individuals, and self-employed business owners.
Read a detailed analysis here.
Read solo 401k contribution limits
Read here for the best solo 401k providers
Read here for Solo 401k vs SEP IRA
Read here for How to file the IRS Form 5500 EZ for solo 401k
Read here for the best crypto IRA providers
Who qualifies for a solo 401k?
An individual freelancer, a small business owner with no employees (W 2 employees), a business with multiple owners and no employees, and also a couple running a business together, qualify for a solo 401k plan.
Why choose solo 401k?
If you are a freelancer, self-employed, or a business owner in which the only employee is you (and if needed your spouse), then the solo 401k is better suited to you than a SEP plan.
First, the solo 401k gives you the option to choose from a Roth (after-tax contributions for tax-free growth) as well as a traditional (pre-tax contributions so that only withdrawals are taxed).
SEP only allows the traditional IRA option.
Second, solo 401k offers additional catch-up contributions ($7500 in 2023) for 50 years or older, which is not offered by SEP.
Third and most importantly, a solo 401k ensures fast stashing of the investment amount in your IRA.
In a SEP, solo investors can contribute up to 25% of their salary until the annual maximum limit ($66,000 in 2023).
In the solo 401k, you can make deferrals as an employee as well as an employer.
As an employee, you can contribute 100% of your salary up to the maximum annual limit ($66,000 for 2023).
Furthermore, as an employer, you can make additional contributions of 25% of your business income, up to the maximum annual limit.
Hence in a solo 401(k), business owners can make contributions both as an employee and as an employer, maximizing retirement contributions and business deductions.
What should I look for when choosing the best solo 401k providers?
There are multiple players in the 401k space (Fidelity, Charles Schwab), and choosing the best solo 401k providers, needs proper due diligence.
Choosing the best solo 401k plan/provider which is best suited to your needs can be a daunting task.
However, there are a few nuances and parameters we can consider while selecting the best solo 401k providers or the best solo 401k plans suited to our needs.
These nuances and parameters are listed below. Please have a look.
- What are the investment options or choices available, like real estate, startups,precious metals and even cryptocurrencies?
- Does the plan offer both Roth and traditional contributions?
- Does the provider offer loans on the basis of the plan?
- Are rollovers in and out of the plan are allowed?
- Security and insurance of funds
- The user experience of the platform
- Pricing and Fees
- Overall image and trustworthiness
Solo 401k providers
When finding the best solo 401k providers or the best solo 401k plans in the market, you will be introduced to two types or categories of providers.
First is the prototype providers. These are the solo 401k providers which provide a set prototype or catalog of generalized offerings in their plan, at zero (almost) costs.
It might happen that the prototype of offerings does not suffice your needs. You might, for example, want to consider after-tax mega backdoor Roth contributions, investment into real estate, cryptocurrencies, and more.
In that case, there are third-party firms that can customize the 401k plan for you, to include the offerings you need. Your customized plan can have Roth contributions, document handling, cryptocurrency investments, and more.
You can then take the custom plan to a brokerage like Fidelity or E*Trade. These third-party bodies are called self directed solo 401k providers or self-administered solo 401k providers.
The free solo 401k providers list, that are the best in the market in 2023 are:
- Fidelity
- Vanguard
- E*Trade
- Charles Schwab
- TD Ameritrade
On the other hand, the third parties which can make a custom solo 401k plan for you at some additional cost are:
- My Solo 401k
- Nabers Group
- Rocket Dollar
- Safeguard Advisors
- Ubiquity
Best Solo 401k providers: Prototype/Free providers
Let us sift through the free or prototype best Solo 401k providers for self-employed individuals, freelancers, business owners with no full-time employees, or small businesses with multiple owners.
| Best Solo 401k providers (prototype) | Investment options available | Fees | Loan | Rollover | Roth option available (Yes/No) | Mobile application (Yes/No) |
| Fidelity | A wide range of mutual funds, stocks, bonds, ETFs, and more. | Zero | No | Yes | No | Yes |
| Charles Schwab | Mutual funds (thousand of options), ETFs, stocks, bonds, and cash equivalent options like money market funds. | Zero | No | Yes | No | Yes |
| Vanguard | Hundreds of Vanguard mutual funds , mutual funds from other companies, ETFs, stocks, CDs and bonds. | $20 annually for each account held | No | Yes | Yes | Yes |
| E*Trade | Over 4,400 mutual funds, options, futures, and fixed-income bonds and CDs. | Zero | Yes | Yes | Yes | Yes |
| TD Ameritrade | Stocks, options (if approved), mutual funds, exchange-traded funds (ETFs), bonds, and CDs | Zero | No | Yes | No | Yes |
BlockchainFundas choice: E*Trade:
E*Trade at zero cost offers loans, traditional as well as Roth contributions and rollover from nearly any of your past retirement accounts.
E*Trade
E*Trade is an old and reputed brokerage firm for your investments. In 2020 it was acquired by Morgan Stanley
Investment options or choices available:
Over 4,400 mutual funds, options, futures, and fixed-income bonds and CDs.
The user experience of the platform:
- Educational materials on the portal: E*Trade provides intuitive dashboards, FAQs, market research, tools that help you in trading, and other vital market trends and information that helps you in conducting an informed trade.
- Check out their Power E*Trade platform.
The Power E*Trade is a powerful platform that gives you powerful tools and dynamic charts for technical pattern recognitions, risk/rewards probabilities, and more. It also allows you to hone your trading skills by using unreal money to trade (Paper trading). - Mobile application: E*Trade provides mobile applications available on the Apple store and Google Play store. The mobile application is an intuitive and innovative application for almost all your trading needs. It also gives you interactive charts, over 100 technical studies, news, and more.
Pricing and Fees:
| Account set up fee | Account Maintenance Fee | Minimum opening fee | Commission | Support and assistance (Brokerage commissions) | |
| E*Trade | Zero | Zero | Zero | Zero | May incur charges |
Customer Support
E*Trade provides support over the phone and by mail.
Phone: 800-387-2331
Personalized support with your employee stock plan account-800-838-0908
Timings: Monday to Friday
12 a.m.–11:59 p.m. ET
Check out this page for more details on the options available for customer support.
In-person support in their offices is also available. Find one of their local offices here.
Loan
E*Trade offers loan against their solo 401k plan.
Rollover
Rollover of any past retirement accounts are allowed by E*Trade.
Roth option availability
E*Trade offers both traditional as well as Roth options for contributions.
Insurance
E*Trade employs the necessary security measures on its website like encryption, two-factor authentication, firewalls, and even fraud protection teams.
Customers maintain their brokerage account with E*Trade Securites LLC and bank accounts with Morgan Stanley bank.
E*Trade Securities LLC is a member of SIPC, which insures customer accounts (securities and cash) up to $500,000 ($250,000 for cash only). Morgan Stanley offers added insurance with an aggregate limit of $1 Billion.
Depending on the type of account you hold with Morgan Stanley Private Bank, FDIC insures your funds for an average of $250,000.
Check the SIPC and FDIC insurance details here.
Pros and Cons
Fidelity Investments
Read a complete analysis here.
Investment options or choices available:
A wide range of mutual funds, stocks, bonds, ETFs, and more.
The user experience of the platform:
Fidelity provides resources and applications like a retirement funds calculator, educational resources like financial basics, news, and research page, and more.
For more details please visit their page.
Pricing and Fees:
| Account Maintenance Fee | Minimum opening fee | Commission | Support and assistance (Brokerage commissions) | |
| Fidelity | Zero | Zero | Zero | May incur some fee |
Customer Care
Phone: 800-544-5373
Chat option: Here
Loan
The Fidelity solo 401k does not entitle you to take a loan against the plan.
Rollover
If you already have a retirement savings account like SEP, or employer 401k, it can be rolled over or transferred to the Fidelity solo 401k.
It is suggested you consult your financial advisor or a Fidelity consultant at 800-544-5373 to get help.
Rollover is allowed for the following:
- Profit Sharing, Money Purchase, and 401(k) plans
- SEP IRAs and SARSEPs
- SIMPLE IRA accounts after two years of SIMPLE participation
- 403(b) and governmental 457(b) plans
- Traditional IRAs
Roth option availability
When I checked with Fidelity, they confirmed that at this point, they do not offer a Roth option for solo 401k retirement accounts. At this time, they only offer traditional IRA (pre-tax contributions).
Security
Fidelity Investments takes security as a top priority. Some of the security measures implemented by Fidelity Investments include two-factor authentication, encryption, firewalls, and intrusion detection, regular security updates and patches, and regular audits.
Insurance
Fidelity is a member of the Securities Investor Protection Corporation (SIPC), which provides insurance protection for clients’ securities and cash in the event of a broker-dealer’s failure.
Pros and Cons
Charles Schwab
Read a complete analysis here.
Investment options or choices available:
Mutual funds (thousand of options), ETFs, stocks, bonds, and cash equivalent options like money market funds.
The user experience of the platform:
- Educational materials on the portal: Charles Schwab offers a variety of resources like articles, videos, and webinars, to educate and help you in making informed investment decisions.
Check this. - Mobile application: Charles Schwab offers mobile applications for Android, iPhone, iPad, or Apple Watch. Check this.
Pricing and Fees:
| Account Maintenance Fee | Minimum opening fee | Commission | Support and assistance (Brokerage commissions) | |
| Charles Schwab | Zero | Zero | Zero | May incur some fee |
Please note that some account expenses, fund expenses, and brokerage commissions may apply. Check this.
For example, a zero trading fee is not applied to over-the-counter equities (equities that are not listed in the Schwab) and trades placed directly in the Foreign Exchange or in the Canadian market.
Options trade has $0.65 per-contract fee. Service charges apply for trades placed through a broker ($25) or by automated phone ($5).
Exchange process, ADR, and Stock Borrow fees still apply. See the Charles Schwab Pricing Guide for Individual Investors for full fee and commission schedules.
Customer Support
Charles Schwab offers a list of phone, chat, and office support for all your challenges and issues while investing your retirement funds.
Customer care number 877-519-1403
For more options to contact customer care please check this page.
Loan
The Charles Schwab solo 401k does not entitle you to take a loan against the plan.
Rollover
If you already have a retirement savings account like SEP, or employer 401k, it can be rolled over or transfered to the Fidelity solo 401k.
It is suggested you consult your financial advisor or a consultant at 800-544-5373 to get help.
Rollover is allowed for the following:
- Profit Sharing, Money Purchase, and 401(k) plans
- SEP IRAs and SARSEPs
- SIMPLE IRA accounts after two years of SIMPLE participation
- 403(b) and governmental 457(b) plans
- Traditional IRAs
Roth option availability
Not available.
Insurance
Charles Schwab deposits the funds at SSB bank. The funds are FDIC insured up to $2,50,000. There is a SIPC insurance also for accounts held by Charles Schwab & Co., Inc. (including those held by clients of investment advisors with Schwab Institutional®).
In addition to SIPC, Charles Schwab accounts are insured by Lloyd’s of London and other London insurers. SIPC along with Lloyd’s of London and other London insurers, provide insurance up to an aggregate of $600 million
For more information please check here.
Pros and Cons
You can also refer to this detailed guide for solo or individual investors.
Vanguard
Investment options or choices available:
Hundreds of Vanguard mutual funds , mutual funds from other companies, ETFs, stocks, CDs and bonds.
The user experience of the platform:
- Educational materials on the portal: Vanguard provides a comprehensive list of articles, how-to guides, news and perspectives, and FAQs for your support. Check here.
- Mobile application: Vanguard offers mobile applications for Android as well as iOS. With the mobile application, you can well track your account balances and portfolio performance, trade and monitor your account activities, and explore different investment options.
Pricing and Fees:
| Account set up fee | **Account Maintenance Fee | Minimum opening fee | ***Commission | Support and assistance (Brokerage commissions) | |
| Vanguard | Zero | $20 for each account held. | Zero | Zero | May incur some fee |
**Monthly or annual maintenance fee: Vanguard charges an annual fee of $20 per account. This annual fee is waived off when you (or at least one of the members in the plan) hold at least $50,000 in qualifying Vanguard assets. Check for qualifying Vanguard assets here.
***Trading fee: Zero trading fee for trading mutual funds, ETFs, and stocks on your Vanguard account.
A few Vanguard mutual funds do charge a trading commission ranging between 0.25% to 1% of the amount of the transaction.
Customer Support
Vanguard provides one-on-one personal advisory services.
Call at 833-987-1555 to speak with an investment professional or click the link below
Partner with an advisor
Vanguard also provides low-cost digital advisory services. Click on the link below.
Digital advisory services
Any technical support regarding the website, account setup, and accessing the account from a mobile device can be requested from here.
Loan
You can’t take a loan from your Vanguard Individual 401(k).
Rollover
If you already have existing IRAs, it can be rolled over or transferred to the Vanguard solo 401k.
Roth option availability
Yes. The Vanguard solo 401k offers both Roth and Traditional IRA options.
Insurance
Vanguard offers decent security measures to protect data and information while using its website.
These include SSL validation, encryption of data, strong passwords, account activity alerts, security questions for user authentication, time-out feature to protect user data, and masking digits to hide account information.
Vanguard maintains a separate data center to compensate for any hacks or attacks on the incumbent one.
Pros and Cons
TD Ameritrade
Investment options or choices available:
Stocks, options (if approved), mutual funds, exchange-traded funds (ETFs), bonds, and CDs are available in most accounts. Investment choices may be limited in trusts and pension plans.
The user experience of the platform:
Pricing and Fees:
| Account set-up fee | Account Maintenance Fee | Minimum opening fee | **Commission | Support and assistance (Brokerage commissions) | |
| TD Ameritrade | Zero | Zero | Zero | Zero | May incur charges |
**Online trade commissions are $0.00 for U.S. exchange–listed stocks, ETFs, and options. A $0.65 per contract fee applies for options trades, with no minimum balances on most account types (excluding some promotional offers), no platform fees, and no trade minimums
Customer Support
Phone: 800-454-9272
Loan
No loans are provided against the TD Ameritrade solo 401k account.
Rollover
Rollover from 401(a), 401(k), 403(a), 403(b), 408, and 457(b) accounts are allowed.
Roth option availability
Post their merger with Charles Schwab, TD Ameritrade has stopped Roth contributions. Check the notice on the second page in this link.
Insurance
TD Ameritrade is a member of the Securities Investor Protection Corporation (“SIPC”), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash).
Pros and Cons
Best self-directed solo 401k providers
Until now, we reviewed the best solo 401k providers list, all of which were almost free of charge (only consultation fee), and provided a generalized offer.
This means a set prototype of offerings is made available to you by these solo 401k providers. What would you do, if you want to be flexible in choosing your offerings?
For example, you may want to invest in other alternative assets like real estate, cryptocurrencies, and precious metals, in addition to the standard stocks and bonds offered by the solo 401k providers.
Here come the self-administered or self-directed solo 401k providers.
How do the self-directed solo 401k providers work?
Step 1: Creation of a Trust
The first step is when a Trust is created, for which you are the Trustee.
Step 2: Open a bank account
The next step is to open a checking bank account in a bank of your choice (ideally the self-directed solo 401k provider should not force you to open an account with a bank of their choice).
The account is opened in the name of the Trust, in which you are the Trustee. This account is used for all investments, taking loans, etc.
Step 3: Alternative to Step 2
As an alternative to Step 2, the self-directed solo 401k provider can assist you in opening a brokerage account with checkbook control and solo 401k loan feature, at one of the prototype solo 401k providers we discussed above like Fidelity, Vanguard, TD Ameritrade, etc.
Step 4: Funding/Rollover
The obvious next step is to either fund your account. You can even roll over funds from your previous IRA account.
Step 5: Start investing
Once your account is funded, you can start investing in traditional or alternative financial products like stocks, bonds, real estate, metals, private equities, etc.
Below we enlist the best self-directed solo 401k providers in 2023.
Rocket Dollar
Investment options or choices available:
Securities like stocks, bonds, mutual funds and also alternative high-risk yet high-reward financial products like real estate, precious metals, cryptocurrencies, private equities and other alternative assets.
The user experience of the platform:
- Educational materials on the portal: Rocket Dollar has a number of support and how to articles to help you open an account and start investing in alternative asset classes.
However, it might be a little cumbersome for beginners to understand the asset classes, the processes, and vital things to take care of while investing in alternative financial assets via Rocket Dollar. In that case, Rocket Dollar provides phone and email support to address challenges. - Mobile application: As per my knowledge at the time of writing this guide, Rocket Dollar does not have a mobile application.
- Customer support:
Email: [email protected]
Phone: 1 855-762-5383
A knowledge base can be found here.
For more info refer to this web page.
Pricing and Fees:
Rocket Dollar offers two separate subscription models – Silver and Gold in its solo 401k plan. All the benefits of the Silver plan are included in the Gold plan.
Check the below-detailed pricing for the Silver and Gold subscription plans.
| Rocket Dollar Fees-Silver and Gold | |
|---|---|
| Silver Monthly maintenance fee: $15 per month Set-up fee: $360 one-time setup fee | Gold Monthly maintenance fee: $30 per month Set-up fee: $600 one-time setup fee |
| No minimum opening deposit | All features offered in Silver |
| Bring Your Own Deal (BYOD) | Expedited services and transfers |
| Online document storage | Four free wire transfers per year |
| Intuitive dashboard to track investments | Tax filing for Solo 401k Form 5500 & 1099-R |
| Email support | Priority Support |
Participant loan
Rocket Dollar solo 401k plan allows self-employed individuals to take loan against their savings up to 50% of their portfolio or $50,000 whichever is lower.
Security and Insurance
Rocket Dollar is a SOC-2 certified company and ensures updates are implemented regularly to comply with the best practices in security.
Additionally, the company’s custodian is an FDIC-insured bank, which means that cash held in the custodian’s accounts is insured up to $250,000 per depositor.
Pros and Cons
My Solo 401k
My Solo 401k Financial is a self-directed solo 401k provider that offers you increased flexibility and options to invest your retirement funds in a tax-deferred manner.
Investment options or choices available:
My Solo 401k provides a range of alternative investment options like real estate, notes, tax liens, private funds, and equities
Fees:
My Solo 401k charges a one-time set-up fee and an annual fee. The annual fee covers timely requested Form 1099-R and Form 5500-ez reporting requests.
| One-time setup fee | $525 |
| Annual Fee | $125 |
Participant loan:
My Solo 401k allows you to take a loan against your solo 401k account, which is 50% of your vested amount up to a maximum value of $50,000.
For example, if your vested amount is $1,20,000, then you are eligible for a loan of up to $50,000 since 50% of the vested amount is greater than the maximum limit of $50,000.
Beyond the $50,000 limit, please check with My Solo 401k for tax implications.
Call: 800-489-7571
Monday-Friday
8:00 am – 4:00 pm PT
Roth option
My Solo 401k self-directed solo 401k account allows the option for Roth contributions so that you can have tax-free withdrawals at retirement.
Rollover
My Solo 401k self-directed solo 401k allows rollover or transfer of your previous retirement accounts to the solo 401k.
My Solo 401k manages all the transfer process, like documentation for transfer, reporting the rollover, and more.
Solo 401k by Nabers Group
Solo 401k by Nabers Group is one of the pioneers in the self directed solo 401k providers, starting way back in 2006.
Investment options or choices available:
Apart from the conventional investment options like stocks and bonds, Solo 401k by the Nabers Group allows tax-advantaged investments into alternative asset classes like real estate, syndicated real estate, hedge funds, bitcoin and other cryptocurrencies, Bullion, startups, etc.
Fees:
Nabers Group charges a fixed monthly fee of $49, which does not change with the size and complexity of your account.
| One-time setup fee | $499 |
| Annual Fee | $99 |
Customer Care:
Phone: (877) 765-6401
Participant loans:
Like My Solo 401k, the Nabers Group solo 401k allows you to take a loan against your account, which is 50% of your vested amount up to a maximum value of $50,000.
An additional spouse loan is available for up to an additional $50K.
For example, if your vested amount is $1,20,000, then you are eligible for a loan of up to $50,000 since 50% of the vested amount is greater than the maximum limit of $50,000.
Roth option:
The Nabers Group solo 401k plan allows Roth contributions (after-tax contributions for no tax withdrawal at retirement).
It also allows in-plan Roth conversions, converting all your till-date contributions to Roth. Only taxes on the converted funds must be paid in the years the conversion has happened.
Rollover
At no additional charges, Nabers Group allows rollover of almost any of your previous retirement accounts including traditional IRA, another 401k plan, 403b, pension plan, TSP, etc. The only retirement plan that cannot roll into a Solo 401k is a Roth IRA as per IRS rules.
Safeguard Advisors
Investment options or choices available:
Apart from the conventional stocks and bonds, invest in alternative assets like real estate, private company stock, crowdfunding, private loans, bitcoin and other cryptocurrencies, and more
Roth option:
The self-directed solo 401k plan offered by Safeguard Advisors, allows Roth contributions.
Rollover
Rollover of existing retirement plans such as IRA accounts or former employer 401(k) plans is allowed into a Solo 401(k), without taxes or penalties.
Ubiquity
Another self-directed solo 401k provider which allows you to invest in alternative assets.
Investment options or choices available:
Apart from the conventional stocks and bonds, invest in alternative assets like real estate, private company stock, crowdfunding, private loans, bitcoin and other cryptocurrencies, and more
Fees:
| One-time setup fee | Zero |
| Maintenance Fee | $19 per month |
Customer Care:
Client support: 8554014357
New client sales: 8557042807
Participant loans:
Yes it allows you to take loan against the solo 401k account. The maximum amount that you may take as a 401(k) loan is generally 50% of your vested account balance, or $50,000, whichever is less.
Roth option:
The self-directed solo 401k plan offered by Ubiquity, allows Roth contributions.
Rollover
Rollover of existing retirement plans such as IRA accounts or former employer 401(k) plans is allowed into a Solo 401(k), without taxes or penalties.
Are solo 401k contributions tax deductible?
Yes in the case of traditional solo 401k (like Fidelity and Charles Schwab) and no for Roth solo 401k (like with E*Trade and Vanguard).
The solo 401k plan for the self-employed and small businesses offers both Roth and traditional contributions. When you make contributions in the traditional manner, then your contributions are tax deductible (pre tax contributions). However, in this approach the withdrawals are levied with applicable taxes.
Contrary to this in the Roth option, the contributions are not tax deductible (after tax contributions), but the withdrawals are tax free.
Can you contribute to a solo 401k and employer 401k?
As a general guideline, based on your eligibility, you can maintain multiple retirement plans such as a 401(k), solo 401(k), SEP, 403(b), or others simultaneously.
If you have a primary day job and a separate side business, provided they do not have any legal overlap, you’re eligible to maintain both retirement plans—i.e., a 401(k) for your primary job and a solo 401(k) for your side business.
This allows you to stash more money in your retirement accounts, along with enjoying associated tax benefits.
However, there are some details to consider. Be aware that any retirement plan, whether it’s a solo 401(k), 401(k), SIMPLE IRA, etc., has two types of contributions—employee contributions (also known as elective deferrals) and employer contributions (including matching, profit sharing, or safe harbor).
Regardless of the number of retirement plans you have, the total employee contributions you make cannot exceed the IRS-defined contribution limit for the year.
For example, in 2023, the maximum allowed employee contribution is up to $22,500. Therefore, no matter how many simultaneous 401(k) or solo 401(k) retirement accounts you maintain, the collective employee contribution cannot exceed the IRS-defined limit ($22,500 in 2023)
Conclusion
We sifted through the best solo 401k providers list, mentioned in this guide. We noticed that selecting the best solo 401(k) providers necessitates careful consideration of a number of variables, including plan fees, investment alternatives, customer assistance, provision of loans, Roth contributions, and overall ease.
First we listed the free best solo 401k providers offered by brokerage firms-E*Trade, Vanguard, TD Ameritrade, Fidelity and Charles Schwab.
Then we looked out for self-administered or self-directed solo 401k providers list, including My Solo 401k, Rocket Dollar, Nabers Group, Safeguard Advisors, and Ubiquity.
E*trade offers loans, Roth, and multiple investment options at a zero fee. It is one of the best solo 401k providers in the market in 2023.
Others in the solo 401k providers list, include Fidelity, TD Ameritrade, and Charles Schwab. To help self-employed people optimize their retirement savings, each of these providers provides reasonable fees, a variety of investment alternatives, and top-notch customer service.
However, if you wish to diversify your investments into alternative asset classes like real estate, bitcoin, and other cryptocurrencies, PEs, etc., you should go with self-directed solo 401k providers. These self-directed solo 401k providers also offer participant loans against your retirement savings, allow Roth contributions and more.
The best service for you will ultimately rely on your unique needs and tastes, so be sure to carefully consider all of your options before choosing one.
Very detailed yet precise analysis.
Thanks a ton Rashmi Sinha.
This is a very resourceful piece! I appreciate that each option has its “pros” and “cons” option for the reader to fully make use of and assist in their decision!
Thanks a ton Sunny…such comments give me the inspiration and courage to work more in the space
Such a detailed and comprehensive list of solo 401k providers.
“Great article! I’ve been looking into opening a Solo 401(k) and this provided a lot of helpful information. I appreciate the breakdown of the different providers and their features.
Thanks Aman…It is nice to know that the article has given you some guidance on to choosing the best solo 401k plan….I am reachable anyway here to answer your queries in the process.