E*TRADE Solo 401k Review (2026)
E*TRADE offers one of the most feature-rich prototype Solo 401k plans available, with both Roth contributions and loan provisions at no cost.
Pricing Details
| Fee Type | Amount |
|---|---|
| Setup Fee | $0 |
| Annual Fee | $0 |
| Total First Year | $0 |
No setup or maintenance fees. Standard trading commissions apply.
Pros and Cons
- Offers both Traditional and Roth contributions
- Allows participant loans up to $50,000
- No setup or maintenance fees
- Wide range of investment options including stocks, ETFs, mutual funds, and options
- Commission-free online trades for stocks and ETFs
- Strong mobile app and research tools
- Limited in-service distribution options
- No after-tax (Mega Backdoor Roth) contribution option
- Cannot hold alternative investments like real estate
- Must use E*TRADE platform for investments
User Sentiment Analysis
Highly rated for the specific demographic of "Liquidity Seekers." The ability to access a $50,000 line of credit tax-free via a participant loan without paying a setup fee is a massive value proposition.
Strategic Insights
- With Prime Rate elevated in 2026, participant loans at Prime + 1-2% become a strategic financing tool—pay 8-9% interest to yourself instead of 10%+ to commercial lenders
- The loan provision effectively functions as a free revolving line of credit (up to $50,000) backed by retirement assets
- Only free prototype plan offering both Roth and loans—a rare combination
Market Position
E*TRADE occupies a unique niche in the brokerage prototype market as the only major "free" provider that supports both Roth contributions and participant loans. This combination makes it the superior choice for self-employed individuals who prioritize cash flow flexibility.
Target Audience: Business owners who value liquidity and want access to retirement funds without taxes or penalties
Watch Out For
- User interface is complex, reflecting its heritage as a platform for active traders rather than passive retirement savers
- No checkbook control—assets must remain in the E*TRADE brokerage account
- Cannot hold alternative investments like real estate or cryptocurrency
Feature Comparison
Compliance Notes
Does not prepare Form 5500-EZ; once assets exceed $250,000, you must file yourself or hire a CPA. This is a hidden cost of "free" plans.
Full Review
E*TRADE's Solo 401k (also called Individual 401k) stands out among prototype plans for offering both Traditional and Roth contribution options along with participant loan provisions - features that many free prototype plans lack.
The plan allows you to borrow up to $50,000 or 50% of your vested balance (whichever is less) for any purpose. This can be particularly valuable for self-employed individuals who want access to their retirement funds without triggering taxes or penalties.
E*TRADE's investment platform provides access to stocks, bonds, ETFs, mutual funds, and options with commission-free trading for online stock and ETF trades. Their research tools and mobile app are well-regarded in the industry.
The main limitation is the lack of after-tax contribution options, meaning you cannot execute a Mega Backdoor Roth strategy with this plan. Additionally, you're limited to investments available on the E*TRADE platform - no real estate, cryptocurrency, or other alternative investments.
Key Features
- Traditional and Roth contributions
- Participant loans
- Rollovers accepted
- Commission-free stock and ETF trades
- Mobile app access
- Research and analysis tools
Who Is This Best For?
Self-employed individuals who want robust features (Roth + loans) without paying fees, and prefer a full-service brokerage platform.
Last updated: January 13, 2026