Self-employed 401(k)

Self-employed individuals, owner-only businesses and partnerships can save more for retirement through a 401(k) plan designed especially for you.


With Fidelity, you have no account fees and no minimums to open an account.1 You'll get exceptional service as well as guidance from our team.

1. Key things to know

Who is eligible

Self-employed individuals with no employees and owner-only businesses. The owner's spouse may participate in the plan if they are a compensated employee of the business.

Tax benefits

Tax-deferred growth, tax-deductible contributions, and pre-tax deferral contributions.

Learn more about the tax advantages of self-employed 401(k)s

Who contributes

Funded by salary deferrals and employer contributions. 

Contribution
amounts

Individuals may contribute up to $20,500 for 2022 ($27,000 if age 50 or older) and $22,500 for 2023 ($30,000 if age 50 or older). Employers may contribute up to 25% of compensation2, up to the annual maximum of $61,000 for 2022 and $66,000 for 2023. Total contributions cannot exceed $61,000 for 2022 ($67,500 if age 50 or older and contributing the catch-up contribution amount) and $66,000 for 2023 ($73,500 if age 50 or older and contributing the catch-up contribution amount). Salary deferral catch-up limits are $6,500 for 2022 and $7,500 for 2023 (if age 50 or older).3

Withdrawals

Participants cannot take withdrawals from the plan until a "trigger" event occurs, such as turning age 59½, disability, or death. 10% early withdrawal penalty applies if you are under age 59½ and taking a distribution. Required minimum distributions start at age 73.

Investment
options

A wide range of mutual funds, stocks, bonds, ETFs, and more.

Fees

There is no opening cost, closing cost, or annual fee for Fidelity's self-employed 401(k).1 $0 commission for online US stock, ETF, and options trades.*

Administrative
responsibilities

An IRS filing is required when you terminate your plan and in some cases on an annual basis. Please see the "Maintaining Your Plan" section on this page for more information.

Deadlines

The deadline to open a new plan is generally December 31 (or fiscal year-end) if salary deferrals are intended. The SECURE Act change to tax filing deadline including extensions allows for profit-sharing only.

How to make
contributions

By phone or by mail.

2. Open your plan and establish account

To fully establish your plan, you'll also need to send at least one completed self-employed 401(k) account application, along with the adoption agreement, to Fidelity. Learn more.

Online plan establishment is available if you:

  • Are establishing a new plan
  • Are the plan administrator and plan participant
  • Are a US Citizen
  • Are naming your spouse as your primary beneficiary if you are married

Click here to open online

If you're setting up a plan and opening an account for someone else or if you'd prefer not to submit documents digitally, please complete steps 1-7 below.

  1. Download, print, and read the Defined Contribution Retirement Plan Basic Plan Document No. 04 (PDF)
  2. Download, print, and complete the Self-employed 401(k) adoption agreement (PDF)
  3. Download, print, and complete the trust agreement (PDF)
  4. Be sure to sign and date the adoption agreement and trust agreement and return the original forms to Fidelity Investments
  5. Keep copies of all documents and records for your permanent company plan records
  6. Complete a self-employed 401(k) account application for yourself and each participating owner (including the business owner's spouse, if applicable).
  7. Complete, sign, and return the adoption agreement, along with the original account application(s), the last item in Step 2, to: Fidelity Investments PO Box 770001 Cincinnati, OH 45277-0036

Once you've established your self-employed 401(k) plan and any new account(s), the next step is to contribute to your 401(k).


3. Contribute to your account

You can use the Contribution Worksheet (PDF) to calculate your annual contributions.

To mail contributions to Fidelity

  1. Make your check payable to Fidelity Investments. Include your account number in the memo section of the check.
  2. Include a completed 401(k) Contribution Remittance Form (PDF) with your check, each time you contribute to your plan.
  3. Mail the check and completed remittance form to:
    Fidelity Investments
    PO Box 770001
    Cincinnati, OH 45277-0003

To set up salary deferral elections

  1. You can use the sample 401(k) Salary Reduction Agreement Form (PDF). Fill it out yourself and have each participating owner (including the business owner's spouse, if applicable) fill it out as well.
  2. Keep this form for your records and do not forward to Fidelity.

To roll over other plan assets

If you already have a retirement savings plan for your business, you may be able to roll over or transfer existing plan assets to a Self-Employed 401(k). Consult with your tax advisor or benefits consultant prior to making a change to your retirement plan.

Assets from the following plans may be eligible to be rolled over into a Self-Employed 401(k):

  • 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

Call a retirement specialist at 800-544-5373 to get help with a rollover into a Fidelity Self-Employed 401(k).


Contribution deadlines

The deadline for depositing your employer profit-sharing contributions for the current calendar year is the business' tax-filing deadline, plus extensions (for unincorporated businesses, this date is usually April 15 of the following year, plus any extensions).

The deadline for depositing your employee 401(k) salary deferrals for owner-only plans is generally by your tax-filing deadline, plus extensions.1

Incorporated business owners (including spouses) must make a written salary deferral election by the end of your tax year.2

Unincorporated business owners must generally make a written salary deferral election by the end of your tax year.

If you have any questions, call 800-544-5373 to speak with a Fidelity small-business retirement representative.

Eligibility

  • Who is a Self-employed 401(k) plan appropriate for?

    A self-employed 401(k) plan may be appropriate for sole-proprietors and other small businesses who have no eligible employees other than owners and spouses of the owners. Individuals with corporations (Corp.), limited liability corporations (LLC), and partnerships may also be able to establish a self-employed 401(k), provided there are no common law employees of the business.

  • Who can participate in the Self-employed 401(k)?

    In addition to the business owners, the owners' spouses may participate in the plan provided they are compensated employees of the business.

  • When would a Self-employed 401(k) not be appropriate?

    If the company has common law employees this plan is not appropriate. This plan might not be appropriate if you have ownership interest in more than one business or are a participant in a company sponsored 401(k) or other salary deferral retirement plan. If you are looking for a plan that allows Roth salary deferral contributions, loans, or hardship withdrawals, this would not be an appropriate plan for your business as these features are not offered at this time.

  • What are the administrative requirements associated with setting up the plan?

    The plan administrator, who is typically the business owner, would be responsible for the administration of the plan, and is required to maintain and update, when needed, all plan records and documents pertaining to the plan. Contributions to and distributions from the plan are also the plan administrator's responsibility. In addition, the plan administrator is responsible for the tax filing that is required for some plans annually and all plans upon termination.

Account Opening

  • How do I open a Self-employed 401(k) plan?

    Online plan establishment is available if you:

    • Are establishing a new plan
    • Are the plan administrator and plan participant
    • Are a US Citizen
    • Are naming your spouse as your primary beneficiary if you are married
    Click here to open online

    If you're setting up a plan and opening an account for someone else or if you'd prefer not to submit documents digitally, please complete the documents below.

    You should review the plan documents, brokerage agreement and other materials to ensure this is right plan for you and your business.

    To open a Self-employed 401(k) plan, you'll need to complete the following documents:
    Self-Employed 401(k) Adoption Agreement (PDF)
    Self-Employed 401(k) account application (PDF)
    Trust Agreement (PDF)

    Complete, sign, and return the Adoption Agreement, the Trust agreement along with the original Account Application(s), to:

    • Fidelity Investments
    • PO Box 770001
    • Cincinnati, OH 45277-0036

    Remember to keep copies of these documents for your own records.

  • What is the deadline to establish a Self-Employed 401(k) plan?

    The SECURE Act extended the deadline to establish your Self-Employed 401(k) to your business's tax filing deadline, plus extensions, for the year for which you intend to contribute. However, if you establish your Self-Employed 401(k) beyond your business's year end, you will only be able to make a company profit-sharing contribution for that year. You would be able to make elective salary deferral contributions for years in which the plan was established prior to the business's year end.

  • How do I add my spouse to the plan?

    A spouse, who is also a compensated employee of the business, may be added to the plan by using the Self-Employed 401(k) account application (PDF).

Contributions

  • How do I make contributions to my plan?

    Make your check payable to Fidelity Investments. Include your account number in the memo section of the check.

    Include a completed 401(k) Contribution Remittance Form (PDF) with your check each time you contribute to your plan.

    • Mail the check and completed remittance form to
      Fidelity Investments
      PO Box 770001
      Cincinnati, OH 45277-0036

    If you need assistance in calculating your annual contributions, you can use the Contribution Worksheet (PDF).

  • What is the deadline for making contributions?

    The deadline for depositing your employer profit-sharing contributions for the current calendar year is the business's tax-filing deadline, plus extensions (for unincorporated businesses, this date is usually April 15 of the following year, plus any extensions).

    The deadline for depositing your employee 401(k) salary deferrals for owner-only plans is also generally by your business's tax-filing deadline, plus extensions.

  • How do I set up set up my salary deferral elections?

    If you have an unincorporated business, you (and your spouse if they are an employee of the business) must make a written salary deferral election before the end of the year. Employees of incorporated businesses must make a written salary deferral election before they can begin deferring from paychecks and that must be before the end of the business’s tax year.

    You may use the sample 401(k) Salary Reduction Agreement Form (PDF). Fill it out and have each participating owner (including the business owner's spouse, if applicable) complete a Salary Reduction Agreement Form if they will be making salary deferral contributions to the plan.

    Please keep this form for your own records. There is no need to send a copy to Fidelity.

  • How much can I contribute to my Self-employed 401(k)?
    • Individuals may elect a salary deferral amount up to $20,500 for year 2022 and $22,500 for 2023.
    • Employers may contribute a profit-sharing amount up to 25% of compensation, with the maximum allowed combined employer and salary deferral contribution amount of $61,000 for 2022 and $66,000 for 2023.
    • For participants aged 50 or older, additional salary deferral catch-up contributions are allowed of $6,500 for 2022 and $7,500 for 2023.

Investments

Withdrawals

  • What are the rules for withdrawing money from the Self-employed 401(k) plan?

    You cannot take withdrawals from the plan until a "triggering" event occurs, such as turning age 59½, disability, separation from service/terminating your plan, or death. If you are under age 59½ and are taking a distribution, a 10% early withdrawal penalty from the IRS will apply. A 20% mandatory withholding would also apply to any distribution that is an eligible rollover distribution. Required Minimum Distributions (RMDs) must begin at age 73.

  • How do I make withdrawals from my plan?

    To process a withdrawal from a Self-employed 401(k) plan, please use One-Time Withdrawal - Defined Contribution Retirement Plan (PDF) One-Time Withdrawal - Defined Contribution Retirement Plan (PDF) form. The plan administrator and the participant for the Self-employed 401(k) plan will both be required to review and authorize the distribution from the plan.

Maintaining your self-employed 401(k)

A self-employed 401(k) is a qualified retirement plan for a small business where the only employees are the owner(s) of the business and/ or the spouse(s) of the owner(s) if they work for the business. You shouldn't use this plan if you have any other employees. The self employed 401(k), in some cases, can offer you the ability to make a larger contribution than other plans. However, it does have extensive administrative and tax reporting requirements that are your responsibility as the business owner and plan administrator. The list below does not cover all of your responsibilities. You may want to consult the IRS or a qualified tax advisor if you have additional questions.

Employer and plan administrator responsibilities

1. Establish your plan

  • The deadline to establish the self-employed 401(k) is generally December 31 (or fiscal year-end), if salary deferrals are intended. The SECURE Act changed the deadline to the business tax filing deadline, including extensions, but establishing a plan after year end would allow only for profit-sharing contributions for that first year.
  • The employer will establish the plan and name the plan administrator. Typically with the self-employed 401(k), the employer and the plan administrator are the same person, but you may name someone else as plan administrator if you choose.

NOTE: The plan administrator is responsible for making contributions, authorizing withdrawals, preparing and filing the 5500 when necessary, recording and keeping documents for the plan and updating those documents when necessary.

2. Notify eligible participants of their ability to defer pay into the plan

Eligible participants who wish to defer salary must complete a salary reduction agreement form before the plan’s year end. You may use the Salary Reduction Agreement form (PDF) and keep it in your own records.

3. Contribute to the participants’ accounts by your business’ tax filing deadline plus extensions

  • Individuals may contribute up to $20,500 for 2022 ($27,000 if age 50 or older) and $22,500 for 2023 ($30,000 if age 50 or older). Employers may contribute up to 25% of compensation, up to the annual maximum of $61,000 for 2022 and $66,000 for 2023. Total contributions cannot exceed $61,000 for 2022 ($67,500 if age 50 or older and contributing the catch-up contribution amount) and $66,000 for 2023 ($73,500 if age 50 or older and contributing the catch-up contribution amount). Salary deferral catch-up limits are $6,500 for 2022 and $7,500 for 2023 (if age 50 or older).
  • Please submit the Contribution Remittance Form (PDF) when sending a check in with your contribution.
  • Sole proprietors and partnerships may choose to use the Self-Employed 401(k) Contribution Worksheet (PDF) to help calculate contributions.

4. Submit withdrawal requests when eligible

  • Participants cannot take withdrawals from the plan until a "triggering" event occurs, such as turning age 59½, disability, or death. 10% early withdrawal penalty applies if you take a distribution before you’re 59½ years old. Required minimum distributions (RMDs) start at age 73.
  • There is a 20% mandatory federal withholding requirement for any withdrawal that is otherwise eligible to roll over to another plan.
  • Withdrawals are done in writing using the Defined Contribution Retirement Plan One-Time Withdrawal form (PDF).
  • RMDs are generally required the year you turn 73 years of age for self-employed retirement plans, regardless of your working or participation status. You may set up recurring RMDs using the Defined Contribution Retirement Plan - Automatic Withdrawals form.

5. Abide by the Defined Contributions Retirement Plan document (PDF)

  • This document contains the IRS-approved rules for your plan, as well as a definition of terms.
  • Important Information regarding your Defined Contribution Retirement Plan:
    The rules for eligibility regarding your self-employed 401(k) plan have changed with the passing of the SECURE Act and the SECURE Act 2.0 of 2022. Before these acts, the strictest eligibility for participation in your plan was defined as an employee being at least 21 years old and having met the service requirement of a 12-month period (hire date to anniversary thereafter) where the employee completes 1,000 hours of service or more. Regardless of the wording in your plan document or the eligibility election you have chosen on your adoption agreement you are required to abide by the new eligibility rules as outlined in the SECURE Act and the SECURE Act 2.0.

    The SECURE Act defines the strictest eligibility requirement as an employee being at least 21 years old and either completing 1 year (12 months) of service under the 1,000-hour rule or completing 3 consecutive years of service with at least 500 hours of service or more each year. This could affect employees starting 1/1/2024. 2021 counts as Year 1. This change affects self-employed 401(k)s.

    The SECURE Act 2.0 has further changed the eligibility rules. We are in the process of assessing the newest rules and how that will affect participants. The Fidelity Self-Employed 401(k) is designed for self-employed individuals or businesses with no employees except the owner(s) and owner’s spouse. If you have employees who may become eligible, you should be prepared for how this will affect your plan administration. See your tax advisor if you have further questions.

6. Keep good records

Starting with the forms you fill out to establish your plan, you’ll want to keep a file of all relevant documents. This is not a comprehensive list, but among the important documents you will need are the plan document, the adoption agreement, records of all contributions and distributions, and any corrections of errors of operation, should they occur. Over the life of your self-employed 401(k), you may have reason to amend your adoption agreement. You should keep any older versions, along with the most current version. You may operate under different versions of the plan document, and you should keep a copy of all versions. Note: Fidelity doesn’t retain any of these records on your behalf.

7. Update your records

  • Any change in your plan that would alter information on your adoption agreement requires you to fill out a new adoption agreement, amending your plan. Substantial changes could result in a termination of the plan. If you are unsure whether you should amend or terminate your plan, please see your tax advisor.
  • The plan document itself is updated for legislative changes every 6 years. Once Fidelity makes the changes to the plan document and they are approved by the IRS, you’ll need to restate your plan. That will require an amended adoption agreement and a new plan document.

8. File the version of the 5500 that's appropriate for your plan

  • Most owner-only plans can file the 5500EZ after plan assets exceed $250,000 but consult the IRS or your tax advisor if you are unsure of which version of the form applies to you.
  • See Understanding form 5500 for more information and help with the filing.

9. Correct errors of operation

  • If an error is made operating your plan, it's your responsibility as the employer to make necessary corrections. See "helpful resources" below for more information
    A common error of operation is over-contributing to the plan, resulting in an excess contribution. You should do everything you can to avoid over contributing, as it can be costly and difficult to correct an excess contribution. There are multiple types of excess, but the two most common are:
    1. The profit-sharing excess which cannot be removed from the plan. The IRS remedy is to “carry forward” the excess and apply it to a future year. Penalties may apply.
    2. An excess salary deferral, which must be removed by 4/15 after the year the excess was deferred.
  • If you believe you have contributed more than you should, please consult your tax advisor. If you have questions, our retirement representatives may be able to help. Please call 1-800-544-5373 and say “Small Business Retirement plan.” Please be aware, our representatives are not tax advisors.

10. Terminate your plan

11. Provide Fee Disclosure information

Your self-employed 401(k) should not be subject to Title 1 of ERISA because it does not cover employees beyond the owners of the business sponsoring the plan (or their spouses). However, you if operate a money purchase or profit sharing plan with common law employees you should be aware of the to keep up to date on fee disclosure regulations (PDF) for plan sponsors and plan participants.

Fidelity's Responsibility

1. Provide the plan document

Defined Contributions Retirement Plan Document (PDF) is qualified and approved by the IRS and updated as required.

2. Maintain accounts

Fidelity will provide the self-employed brokerage account(s) on our platform and the custodial agreement that outlines the rules and agreement for the account(s). Please see Establish Your Accounts.

3. Provide an Annual Valuation Statement (AVS) for the plan annually

  • The AVS is available online and/or mailed annually in late April.
  • A detailed explanation is on the Understanding form 5500 page.

4. Prepare tax forms for participants

IRS form 1099-R for each year distributions or rollovers are processed out of an account.

5. Offer planning and investment guidance

  • Choose your investments using our exceptional online tools and data. Our experienced representatives can also help you make an informed decision.
  • For more information on how we can help you with investment management, planning, and advice, please see What We Offer.

Helpful resources

  1. IRS 401(k) plan Fix-It Guide
  2. The Employee Plans Compliance Resolution System (EPCRS)
  3. IRS 401(k) plan additional resources
  4. IRS Website
  5. Understanding form 5500

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