Best Solo 401(k) Providers

A solo 401(k) lets a business owner and their spouse set aside funds for retirement. Also known as an individual 401(k) or self-employed 401(k)—a solo 401(k) can provide more flexibility than other self-employed retirement plans due to its generous contribution limits and lenient minimum qualifications.

Like an employer-sponsored 401(k) or an individual retirement account (IRA), choosing a provider with the right investment choices at the right price is critical.

We compare the best solo 401(k) providers to help you save for retirement, build a diversified portfolio, and enjoy hands-on customer support when you need account assistance.

Best ForLearn More
Well-rounded trading platformLearn More
Low-Cost ETFsLearn More
Carry Logo 2024Alternative InvestmentsLearn More
Research toolsLearn More
Customer supportLearn More
the entrust group logoPrivate equity investorsLearn More

Fidelity Investments 

Best For: Well-rounded trading platform

Minimum Balance: $0 | Fractional Trading: Yes

➕ No account service fees or minimums
➕ Many investment options
➕ Fractional investing for stocks and ETFs
➕ Wide array of research tools
➖ Limited charting tools on the mobile app
➖ No cryptocurrency trading
➖ No paper trading

Annual Account Fee: $0

Stock & ETF Trades: $0

Visit Fidelity

The Fidelity Investments Self-Employed 401(k) Plan doesn’t charge account fees or require a minimum balance. You can enjoy commission-free stocks, funds, and options trades. Further, there are ample research tools to help traders and long-term investors alike.

Your investment options include:

While most index funds have very low expense ratios, you can pay no expense ratio or transaction fees with the Fidelity ZERO fund family. The minimum initial investment is only $1 which is budget-friendly too.

Many Fidelity funds have an active investing strategy striving to beat the stock market. It’s possible, but remember that active funds carry higher expense ratios than passive index investing, which makes outperforming the benchmark even more critical.

Active investors will appreciate Fidelity for its in-depth stock research tools. The brokerage's mobile app allows you to buy $5 fractional shares of single stocks and ETFs. However, you can only buy whole shares of stocks and ETFs through the web platform. 

Some investors will appreciate the peace of mind of investing with one of the largest discount brokers. In addition to your solo 401(k), several other account types are available for coordinated investing strategies. And Fidelities planning tools, calculators, and third-party research insights can help you make more informed decisions.

Learn more about the latest Fidelity Investments promotions

Vanguard

Best For: Low-Cost ETFs

Minimum Balance: $0 | Fractional Trading: Only for Vanguard ETFs

➕ No setup fees
➕ Access to highly-rated Vanguard mutual funds
➕ Passive and active fund strategies
➖ You can't trade individual stocks
➖ Limited research tools
➖ Limited fractional trading

Annual Account Fee: $0

Stock & ETF Trades: $0

Visit Vanguard

A Vanguard i401(k) can be a good option for investing in index funds with low management fees and minimal portfolio volatility. However, you can't invest in individual stocks, non-Vanguard funds, and alternative assets, which is a major drawback.

This account only offers 100+ Vanguard mutual funds, including the Admirals Shares class of many index funds as an investment option. Thankfully, most funds have a competitive expense ratio, and there are many passive investing strategies.

There are no setup fees, but you will pay a $20 annual fee per Vanguard mutual fund in your account. This per-fund expense no longer applies once one participant has at least $50,000 in qualifying Vanguard assets. Dollars tied up in Vanguard ETFs, Vanguard mutual funds, and Vanguard Personal Advisor Services count toward the $50,000 threshold.

You may want to wait to open a Vanguard account until you are able to avoid the fee. Another possibility is the Three Fund Portfolio to minimize the incidental costs while giving you exposure to nearly every stock and bond sector.

For more information, check out our Fidelity vs. Vanguard comparison.

Carry Money

Best For: Alternative Investments

Minimum Balance: $0 | Fractional Trading: Yes

➕ Many investment types available
➕ Supports alternative assets
➕ Hands-on Backdoor Roth setup assistance
➕ Financial advisor access
➖ Basic plan is pricey at $299/year
➖ You need the Pro Plan ($499/year) to access a financial advisor

Annual Account Fee: Starts at $299/year

Stock & ETF Trades: $0

Visit Carry

The Carry Solo 401(k) offers an expansive selection of investment choices beyond the standard stock and ETF catalog. You can invest in alternative assets, such as crypto, real estate, and startups. Carry can guide you through the investing process and help you link your external accounts to complete the purchase. 

Stocks and ETFs trade directly from your Carry retirement account, giving you an investing experience similar to legacy online brokers. High earners should give Carry a look, as it can help them build a “mega backdoor Roth” through the solo 401(k) and other retirement accounts. While many people use a Roth IRA instead of a 401(k), you can magnify your tax savings with the high annual contribution limits of a solo 401(k). 

All users must choose from one of three membership plans:

  • Basic Plan ($299 annually): Access to brokerage and retirement accounts, no assets under management (AUM) fees, on-demand courses and training, plus security and compliance monitoring.
  • Pro Plan ($499 annually): The Pro Plan includes self-directed IRAs, a customized financial plan, financial advisor sessions, and no AUM fees.
  • Carry VIP ($12,000 annually): For business owners with over $200,000 in annual income and by application only. Enjoy hands-on financial planning, investment advice, and no-fee investment management. 

Each tier provides access to the Carry Solo 401(k), IRAs, and brokerage accounts. The Basic and Pro plans include a 30-day money-back guarantee with questions asked if you cancel.

Lastly, Carry accepts unlimited 401(k) rollovers into your new retirement accounts. 

Charles Schwab

Best For: Extensive research tools

Minimum Balance: $0 | Fractional Trading: Yes

➕ No account service fees or minimums
➕ Plenty of investment options
➕ Supports fractional trading
➕ In-depth stock research and trading tools
➖ Low APY on cash holdings

Annual Account Fee: $0

Stock & ETF Trades: $0

Visit Charles Schwab

A Schwab Individual 401(k) plan doesn’t charge any setup or ongoing maintenance fees. You have many investment options, including stocks, ETFs, mutual funds, and fixed income (i.e., CDs and Treasury Bills). Customer support is available 24/7 by phone or online.

Additionally, participants can enjoy commission-free trades on the following investments:

  • Individual stocks
  • Schwab ETFs
  • Non-Schwab ETFs
  • No-transaction-fee mutual funds
  • Options (plus $0.65 per contract)

Trading commissions can apply to other securities. Commissions also apply to phone-assisted and broker-assisted trade orders.

Active traders will find Schwab's investment research tools to be versatile with advanced charting capabilities and technical studies. Further, there are ample third-party research reports to capture fundamental metrics on stocks and funds.

While you can use this brokerage solely for its individual 401(k) plan, Charles Schwab offers several small business investing solutions. One is a general brokerage account, or you can earn passive income from CDs and money market funds. 

Learn more about the Charles Schwab investing promotions.

E*TRADE from Morgan Stanley

Best For: Excellent customer support

Minimum Balance: $0 | Fractional Trading: No

➕ No account fees or minimums
➕ Many commission-free investments
➕ Powerful trading tools
➖ Doesn't support fractional trades
➖ No cryptocurrency trading

Annual Account Fee: $0

Stock & ETF Trades: $0

Visit E*Trade

An E*TRADE Individual 401(k) account doesn’t charge any account service fees or account minimums. Although the online broker doesn't offer fractional investing, there are no trading commissions for stocks, ETFs, or mutual funds. 

Fee-free investing applies to index funds as well.

You can also trade bonds ($1 per bond) and options ($0 commission plus $0.50 to $0.65 per contract). E*TRADE has impressive research tools available on its web and mobile platforms when you’re comfortable with a self-managed portfolio.

Over 6,000 mutual funds are available for trading. One perk of E*Trade is that it doesn’t furnish its own mutual fund family like Fidelity, Schwab, or Vanguard. As a result, you can have access to many of the best mutual funds or ETFs with low minimum investments and free trades.  

The Entrust Group

Best For: Private equity investors

Minimum Balance: $0 | Fractional Trading: No

➕ Self-directed accounts
➕ Supports a wide range of alternative assets
➕ In business for 40+ years
➖ High setup and account fees
➖ No brokerage options

Annual Account Fee: Starts at $199

Stock & ETF Trades: N/A

Visit The Entrust Group

While you can't trade stocks and ETFs, an Entrust Individual 401(k) is worth considering if you want to hold the following alternative assets:

  • LLCs
  • Precious metals
  • Private Equity
  • Private lending
  • Real estate

The fees vary depending on the type of account and asset size, but you can expect to pay a $50 account setup fee and at least $199 per year.

What Is a Solo 401(K)?

A solo 401(k) is a retirement savings plan for self-employed people with no full-time employees other than the business owner and their spouse. It allows them to save for retirement using pre-tax contributions while benefiting from the same tax advantages as regular 401(k) plans.

How Do Solo 401(K) Contributions Work?

To be eligible to contribute to a solo 401 (k), you must be a business owner with no employees and an income-producing business. Solo 401(k) plan holders can choose between a traditional 401(k) and a Roth 401(k), with each type of plan having its advantages.

Contributions to a traditional 401(k) plan are made with pre-tax income and are tax-deductible in the year you contribute. However, withdrawals made in retirement will be taxable.

You won't benefit from the upfront tax-deductibility if you contribute to a Roth solo 401(k), but withdrawals made in retirement are not taxed.

Solo 401(k) Contribution Limits

For 2024, the total solo 401(k) contribution limit is up to $69,000. Anyone 50 or older can make an additional catch-up contribution of $7,500.

FAQs

Is a solo 401(k) worth it?

Solo 401(k) is better than a traditional or Roth IRA for self-employed business owners, sole proprietors, and their spouses as the annual contribution limit is substantially higher while providing similar tax benefits. 
To quickly compare the 2024 tax year limits, the solo 401(k) contribution limit is up to $69,000 ($76,500 if 50 years or older) versus $7,000 for IRAs (up to $8,000 when you’re 50 or older).

Are there solo 401(k) loans?

The best solo 401(k) providers let clients borrow up to 50% of their portfolio value or $50,000, whichever is less. Be sure to compare the repayment guidelines and any potential fees.

Are solo 401(k) plans free?

Some online discount brokerages don’t charge setup or annual account service fees, while others charge as much as $500. Trading fees may also apply when buying stocks, ETFs, and mutual funds depending on the brokerage. Alternative assets like crypto and real estate investments usually incur fees to purchase and hold in a self-directed retirement account.  

Summary

Any of these solo 401(k) providers can help you save more money for retirement when you’re a sole proprietor or single-employee business.

However, several notable differences exist when comparing the best solo 401(k) providers. Unless you need to hold alternative assets, your best bet is to consider one of the large brokerages that offer commission-free trades and support fractional shares, such as Fidelity or Charles Schwab. If you need to hold alternative assets, including real estate or private equity, you'll want to look closely at Carry Money or The Entrust Group. Just be mindful of the annual fees with those providers.

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About Josh Patoka

After graduating in $50k with student loans in May 2008 from Virginia Military Institute with a B.A. International Studies and Political Science with a minor in Spanish (he studied abroad in Sevilla, Spain for 3 months), Josh decided to sell his soul for seven years by working in the transportation industry to get out of debt ASAP and focus on doing something else with a better work-life balance.

He is a father of three and has been writing about (almost) everything personal finance since 2015. You can also find him at his own blog Money Buffalo where he shares his personal experience of becoming debt-free (twice) and taking a 50%+ pay cut when he changed careers.

Today, Josh relishes the flexibility of being self-employed and debt-free and encourages others to pursue their dreams. Josh enjoys spending his free time reading books and spending time with his wife and three children.

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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