Solo 401(k)

Solo 401(k)

Q: When is a Solo 401(k) the right fit for a client?

A: Solo 401(k)s are available to self-employed individuals with no full-time employees other than a spouse. They're not just for full-time freelancers — high-income W-2 employees with side income (physicians, attorneys, executives with consulting LLCs) can qualify. Combined employee and employer contributions can reach up to $70,000+ for 2025, making them one of the highest-limit retirement vehicles available.

Q: What's the contribution limit for a Solo 401(k) in 2025?

A: Employee deferral: up to $23,500 (plus $7,500 catch-up for ages 50–59 and 64+; $11,250 super catch-up for ages 60–63). Employer contribution: up to 25% of net self-employment income (20% for sole proprietors and partnerships). Total combined limit: $70,000 (or more with catch-ups).

Q: Are there administrative requirements for Solo 401(k)s?

A: Annual maintenance is generally minimal, but once plan assets exceed $250,000, the plan must file Form 5500. The plan sponsor is responsible for filing Form 5500 for Solo 401(k) unlike the traditional 401(k) product where Betterment creates a signature-ready Form 5500. Betterment's Solo 401(k) offering is fully digital, and is now available through national advisor networks.