• Print
  • Default text size A
  • Larger text size A
  • Largest text size A

Self-Employed 401(k) Plans

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

Plan features

Tax benefits

Tax-deferred growth

Tax-deductible contributions

Pre-tax employee deferral contributions

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

No setup or annual account fee1
Eligibility

Self-employed individuals and owner-only businesses and partnerships are eligible.

Owners’ spouses may also participate.
IRS maximum
contribution

Salary deferrals up to $17,500 for 2014 and $18,000 for 2015

See how much you may be able to contribute to your plan with our Self-Employed Contribution Calculator.
Catch-up contribution

Additional salary deferral of $5,500 for 2014 and $6,000 for 2015 (if age 50 or older)2
Profit sharing
contribution

Up to 25% of compensation,3 up to the annual maximum of $52,000 for 2014 and $53,000 for 2015
Establishment deadline

The deadline to open a new plan is December 31 (or fiscal year-end).
Administrative
responsibilities

Annual IRS Form 5500 filing after plan assets exceed $250,000
Withdrawals

Minimum required distributions starting at age 70½

10% early withdrawal penalty if under age 59½ and no exceptions apply
Investment options

A wide range of mutual funds, stocks, bonds, ETFs, and FDIC-insured CDs
Support and guidance

One-on-one guidance—in person, online, or over the phone

Research and tools to help you create a long-term plan and choose investments

Next steps

Open a Self-Employed 401(k).
Call 800-544-5373 and select option 3 to speak with a small-business retirement specialist.

Get started on your own. Get a jump on the paperwork for your new plan.

Request Our Guide to Small-Business Retirement Plans.

013
5508tridion
Rated 4.1 out of 5 by 111 reviewers.
Rated 5 out of 5 by Great customer service on the phone Customer service on the phone is excellent. It is surprising they have such knowledgeable people ready to assist on the other end of the line! June 24, 2014
Rated 5 out of 5 by Easy set-up Customer service rep made it very convenient to call in my contribution and transfer funds. June 17, 2014
Rated 5 out of 5 by SPH review Well designed program for sole proprietors with numerous low cost investment options. May 27, 2014
Rated 5 out of 5 by Good solid company Overall, very satisfied with the products and service. Customer service, specifically the livechat feature are top notch. May 14, 2014
Rated 5 out of 5 by Convenient with flexible investment options Fidelity provides a very user friendly and flexible investment platform for any account type. The self-employed 401k plan has helped me maximize my annual contributions and invest these contributions using the Fidelity web site tools or with the assistance of an advisor. Fidelity is highly recommended! February 16, 2013
Rated 5 out of 5 by Easiest-to-administer, most flexible self-employed 401(k) I looked at 401(k) plans offered by several providers and chose Fidelity because my other retirement plan assets were with Fidelity and because of the range of choices, simplicity and low fees. Forms to ensure administrative compliance are readily available. I have referred others to the Fidelity personal 401(k) website and they found it straightforward as well. In fact, the information supplied has led people to have conversations with their accountants about their tax planning. February 15, 2013
Rated 5 out of 5 by Fidelity self employed 401k This self employed 401 k plan has been perfect for me since I started consulting after retirement in January 2008. Easy to set up and administer and easy for my tax accountant to work with too. Has saved me taxes and helped to save for retirement as well. After looking at several options, this was obviously the best plan available for people like me. February 15, 2013
Rated 5 out of 5 by Self-Employed 401K Plan and Fidelity After retiring in mid-2012 and deciding to do some part-time consulting work, I began searching for info on available savings plans for this income. While I did searching on the internet and IRS related to this subject, I also contacted Fidelity and found the best and quickest info from them. They provided immediate assistance with getting the account set-up, which only took approx. 30 minutes, and things were then ready for me to begin making some deposits. I have found Fidelity to be #1 in Customer Service and they have a Great web-page for user help. February 15, 2013
Rated 4 out of 5 by Exactly what I needed As a self-employed software consultant with an LLC, I needed an easy and flexible option to save for retirement. Fidelity's Solo 401k met my needs and I'm thrilled with its ease. I already love Fidelity's customer service and when I needed help with a question (I overcontributed the first year by accident!) they helped me through the process to resolve my error. February 10, 2015
Rated 5 out of 5 by Excellent Solo 401K tools and advisors I used this tool to give me directional insight into my contribution. I also spoke with the 401K specialist. I have a tax accountant who mapped this out for me, but it was great to get some quick answers on a few contribution questions January 24, 2015
Rated 3 out of 5 by Few challenges Their are two main issues I have with the account that need to be addressed. First, it doesn't allow me to transfer money into the account from the site. I have to go to a branch or call the 800 number. The other item I would like to see addressed is it doesn't show me my total contribution to the plan for the year. The Roth IRA I have shows this on the site so I can track it easily. Outside of theses two items, I am very happy with the account. January 6, 2015
Rated 1 out of 5 by Very difficult to get hold of custmer service agent I waited almost an hour with no response. I decided to give up and call back later to try my luck. December 22, 2014
Rated 5 out of 5 by Convenient I like the convenience. and advice provided by the office in NYC and call center. October 21, 2014
Rated 4 out of 5 by Wish I could do ACH transfers I love the plan, the options, and I've had some great experiences with customer service at Fidelity. The thing that annoys me though is that for a solo-401K (as opposed to other plans I've had at FIdelity), I can't make a contribution electronically via ACH transfer - I have to send in a check. October 7, 2014
Rated 4 out of 5 by Secure and Many Investment Options Straightforward investment options and voluminous research available. Could be improved by offering ACH Deposits. September 3, 2014
Rated 4 out of 5 by Great...except for one thing The ability for my business partner and I to contribute both profit sharing and payroll contributions are great. As stated elsewhere - Come On Fidelity. I should not have to send you a paper check every month. You are the only company I cut a paper check to now. Let's get with the times - give us ACH! August 18, 2014
Rated 3 out of 5 by Paper Checks Required? Why? I am generally very pleased with my Fidelity retirement plan and the supporting services, with one major exception: Why do I have to print, sign and mail a paper check with really useless paper form? I know you can do this on-line. Why not for this kind of account? August 14, 2014
Rated 5 out of 5 by On Line contributions would be nice.... The Self Employed 401(k) plan is great in every respect. However, it would be perfect if I could make contributions on line rather than via checks and snail mail. August 13, 2014
Rated 4 out of 5 by great option for self employed The 401k for self employed persons isa great option. My only complaint is I wish I didn't have to mail a paper check with a remittance form every month. Get electronic transfer! August 13, 2014
Rated 3 out of 5 by Fidelity SE 401(k) I wish the account allowed online or etf deposits instead of requiring everything to be sent via the mail. I also wish it qualified as a real 401(k) account under ERISA and would therefore be protected from personal lawsuits like ERISA-qualified accounts. August 6, 2014
Rated 1 out of 5 by Incompetent service I called trying to get the form to amend my plan to add another affiliated business. They send me an email supposedly that has a link to the form, but it just gets me to the main retirement page. After 3 days of calling and searching, I still can't locate the form. July 10, 2014
Rated 4 out of 5 by Inexpensive and Diverse Would be nice to make transfers from my banking account without having to call a rep to do it for me. I do love that IRA rollovers are possible. June 12, 2014
Rated 5 out of 5 by Easy I am the admin and only participant. Easy to set up, easy to use. I wish I could make deposits electronically and not be limited to hard checks only. May 14, 2014
Rated 4 out of 5 by A great little solo 401k plan This is a great plan for very small businesses. It has no fees, and employees can invest in whatever they want, including several index ETFs with no transaction fees. There are a few areas where they could improve: 1. Electronic contributions. Right now, contributions are on pencil and paper and snail mail. Would be nice if it could integrate with some of the major small business payroll vendors. 2. Automatic fund purchases. Employees have to remember to purchase their ETFs regularly or they'll just have cash sitting around in their accounts. 3. Offer a Roth 401k option. But other than that, this is a great plan! Highly recommended! January 22, 2014
Rated 5 out of 5 by need online deposits need online deposits vs. checks. And the ability to separate employee/employer contributions online October 9, 2013
Rated 4 out of 5 by Super fast self employed 401K setup Fidelity helped me setup a self employed 401K plan within no time. The paperwork was minimal and within 30 mins, my account was ready. They were very helpful in explaining how contributions can be made along with limits etc. September 20, 2013
Rated 1 out of 5 by 401(k) Solo Fidelity Solo 401(k) plan is set up as a Keogh plan and this will not allow access to loans. I found this out the hard way. The plan documents do not allow the loan. When I set up the account with Fidelity this was one of the major objectives was to have the safety of a plan loan. I was told by a fidelity rep that is was available. He was wrong. If you are setting up a Solo 401(k) and want a loan don 't use Fidelity. September 18, 2013
Rated 5 out of 5 by 401k Fidelity advisors were all well versed in the investment product, were very cordial and helpful. Answered all my questions & more. May 27, 2013
Rated 3 out of 5 by Service. A phrase not a reality! In early January 2013 I called with questions about Roth 401k plans. I was transferred around and talked to 3 different people who said that they were not the right person. It was a waste of time. February 23, 2013
2 3 4 next>>
Although consultations are one on one, guidance provided by Fidelity is educational in nature, is not individualized, and is not intended to serve as the primary or sole basis for your investment or tax-planning decisions.
Note that the total of salary deferrals and profit sharing contributions cannot exceed $52,000 ($57,500 if age 50 or older) for 2014 and $53,000 ($59,000 if age 50 or older) for 2015.
1. There is no cost to open and no annual fee for Fidelity's Traditional, Roth, SEP, and Rollover IRAs. A $50 account close out fee may apply. Fund investments held in your account may be subject to management, low balance and short term trading fees, as described in the offering materials. For all securities, see the Fidelity commission schedule for trading commission and transaction fee details.
2. With catch-up provisions, individuals 50 and older may defer up to $23,000 in 2014 and $24,000 for 2015, subject to the combined deferral and employer contribution limit.
3. Maximum compensation on which contributions can be based is $260,000 for 2014 and $265,000 for 2015. If you are self-employed, compensation means earned income.
For further information on your specific situation, consult with your tax advisor.
The initial customer ratings and reviews for this product (those dated before 3/18/2013) were provided to Fidelity through an email solicitation for feedback on the product. All ratings and reviews are provided to Fidelity on a voluntarily basis and are screened in accordance with the guidelines set forth in our Customer Ratings and Reviews Terms of Use. For additional information on which ratings and reviews may be posted, please refer to our Customer Ratings and Review Terms of Use. Featured Reviews have been selected based on subjective criteria and reviewed by Fidelity Investments. The average rating is determined by calculating the mathematical average of all ratings that are approved for posting per the Customer Ratings and Reviews Terms of use and does not include any ratings that did not meet the guidelines and were therefore not posted. Ratings and reviews are added continuously to the website (after a delay for screening against guidelines) and average ratings are updated dynamically as reviews are added or removed.
The ratings and experience of customers may not be representative of the experiences of all customers or investors and is not indicative of future success. The accuracy of information included in the customer ratings and reviews cannot be guaranteed by Fidelity Investments. Customers who post ratings may be responsible for disclosing whether they have a financial interest or conflict in submitting a rating and review.
Please contact a Fidelity representative if you have additional questions or concerns about the ratings and reviews posted here.
560603.6.1
close

Tax Advantages of Self-Employed 401(k)s

A Self-Employed 401(k) may substantially reduce your current income taxes because generally, you can deduct the entire amount of your plan contributions from your taxable income each year.

  • If your business is unincorporated, you can deduct contributions for yourself from your personal income.
  • If your business is incorporated, you can generally deduct contributions as a business expense.
  No Plan Self-Employed 401(k)
Net Business Profits $100,000 $100,000
Less Deduction for ½ Self-Employment Tax -7,065 -7,065
Less Max. Contribution (25% of earned income)3 -0 -18,587
Less Salary Deferral -0 -17,000
= Taxable Income = $92,935 = $57,348
Taxes Due4 $19,937 $11,256
Taxes Saved $0 $8,681

How a Self-Employed 401(k) contribution can add up

As you can see from the example below, for 2012 a self-employed business owner who is age 50 with $100,000 in compensation may save up to $20,500 more with a Self-Employed 401(k) than with a SEP-IRA or Profit Sharing Plan.

2012 Example No Plan Self-Employed 401(k)
Employer's Tax Deductible Contribution Up to 25%3 of compensation (not to exceed $50,000) $18,587 $18,587
(25% x $74,348)
Employee's Deferral Option (not to exceed $17,000) Not applicable $17,000
Employee's Catch-Up Deferral Option if age 50 or older (not to exceed $5,500) Not applicable $5,500
Final Total Contribution $18,587 $41,087

Note: Fidelity also offers a Profit Sharing Plan which lets you contribute the same amount as a SEP-IRA. A Profit Sharing Plan may be better suited for your needs if you have multiple employees and want more restrictive eligibility requirements to participate in the plan. Please contact a Fidelity retirement representative at 800-544-5373 and select option 3 for more information.