Comparing the Best Solo 401(k) Options for 2025
What to Look for in a Solo 401(k) Provider
- Contribution Types: Availability of both Roth (post-tax) and Traditional (pre-tax) options
- After-Tax Contributions: Ability to perform a Mega Backdoor Roth IRA
- Loan Options: Availability of plan loans
- Investment Flexibility: Range of investment options including alternatives
- Rollover Options: Ability to roll assets into or out of the plan
- Costs: Setup, maintenance, and investment fees
Top Solo 401(k) Providers
1. E*TRADE Solo 401(k)
Pros:
- Offers both Traditional and Roth contributions
- Allows loans
- No setup or maintenance fees
- Wide range of investment options
Cons:
- Limited in-service distribution options
Best For: Individuals seeking robust features and low costs.
2. Fidelity Solo 401(k)
Pros:
- Low trading fees ($0 for stocks, ETFs, and options)
- Full range of investment options
- Accepts rollovers for backdoor Roth IRA strategies
Cons:
- No Roth or loan options
Best For: Long-term investors prioritizing low costs and comprehensive investment choices.
3. Ascensus/Vanguard Solo 401(k)
Pros:
- Offers Traditional and Roth contributions
- Recently added rollover options
Cons:
- No loan options
- Limited to Vanguard mutual funds
- Annual custodial and per-fund fees can add up
Best For: Investors loyal to Vanguard's low-cost mutual funds.
4. Charles Schwab Solo 401(k)
Pros:
- Offers both Traditional and Roth contributions
- Wide range of investment options
- No setup or annual fees
Cons:
- No loan or after-tax contribution options
Best For: Investors seeking a straightforward, low-cost plan.
Non-Prototype Solo 401(k) Providers
If the "free" prototype plans from major brokerages don't meet your needs, consider a third-party provider. These plans offer full customization, including:
- Checkbook control
- Alternative investments (e.g., real estate, startups, cryptocurrency)
- Mega Backdoor Roth IRA options
Setup Fee: $525
Annual Fee: $125
Features:
- Full customization
- Comprehensive plan support
- Works with Fidelity or Schwab
Setup Fee: $499
Annual Fee: $348
Features:
- Advanced technology for document prep
- Secure online portal
- Loan options included
Setup Fee: $600
Annual Fee: $360
Features:
- Flexible investment options
- Gold-tier plan includes tax filing assistance
Setup Fee: $285
Annual Fee: $228
Features:
- Low-cost entry
- Allows after-tax contributions
- Single(k)+ plan includes record-keeping
Conclusion
A Solo 401(k) can be a powerful tool for maximizing retirement savings and reducing taxes for self-employed individuals. Carefully consider the features and costs of each provider to find the best fit for your financial goals.
Whether you choose a free prototype plan or a customizable non-prototype option, the right Solo 401(k) can set you on the path to a secure retirement. Learn more about eligibility requirements and contribution limits to get started.