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.

Questions

800-544-5373

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1. Key things to know    2. Open your plan    3. Establish accounts    4. Contribute to your account

1. Key things to know

Who is eligible

Self-employed individuals and owner-only businesses. The owner's spouse may participate in the plan.
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 compensation deferrals and employer contributions.
Contribution
amounts

Individuals may contribute up to $19,500 for 2021 and up to $20,500 for 2022. Employers may contribute up to 25% of compensation, up to a maximum of $58,000 in 2021 and $61,000 for 2022. Profit-sharing contributions allowed up to 25% of compensation,2 up to the annual maximum of $58,000 in 2021 and $61,000 for 2022. Total contributions cannot exceed $58,000 in 2021 and $61,000 for 2022. Additional salary catch-up of $6,500 for 2021 and $6,500 for 2022 (if age 50 or older).3
Withdrawals

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 72.
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

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

The deadline to open a new plan is generally December 31 (or fiscal year-end) if compensation 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

Appoint a Plan Administrator—someone who takes care of administrative responsibilities and ensures the plan is operating according to the Plan Document.

Because a Fidelity plan is easy to maintain, the employer usually acts as the Plan Administrator. You may also name another person at your firm, or your accountant, as the Plan Administrator. Learn more about the duties of the Plan Administrator.

  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

To fully establish your Plan, you will also need to send at least one completed Self-Employed 401(k) Account Application, along with the Adoption Agreement, to Fidelity - click on the "Establish Accounts" tab to learn more.


3. Establish accounts

  1. Complete a Self-Employed 401(k) Account Application for yourself and each participating owner (including the business owner's spouse, if applicable).
  2. Download, print and read the following documents and provide copies to each eligible business owner:
    • Customer Agreement and the Brokerage Commission and Fee schedules (PDF)
    • Fidelity's privacy policy
    • Fidelity Government Cash Reserves prospectus.
      This is the fund that will form the core account for Fidelity Retirement Plan brokerage accounts. Read the prospectus carefully before you invest or send money.
      You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund's sponsor, have no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
    • Self-Employed 401(k) account application
  3. Complete a Self-Employed 401(k) Account Application for yourself and each participating owner (including the business owner's spouse, if applicable).
    Fidelity Investments
    PO Box 770001
    Cincinnati, OH 45277-0003

Once you have established your Self-Employed 401(k) Plan and any new account(s), the next step is to contribute to your 401(k).


4. 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 employees of the company.

  • 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. In 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

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 $19,500 for year 2021 and $20,500 for year 2022.
    • Employers may contribute a profit-sharing amount up to 25% of compensation, with the maximum allowed combined employer and salary deferral contribution amount of $58,000 for 2021 and $61,000 for 2022.
    • For participants aged 50 or older, additional salary deferral catch-up contributions are allowed of $6,500 for 2021 and $6,500 for 2022.

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 72.

  • 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.

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