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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.
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5508tridion
Rated 4.1 out of 5 by 111 reviewers.
Rated 4 out of 5 by Self-Employed 401(k) It would be very helpful if you mailed the forms to make an annual contribution as you do for your other retirement products or if you made finding them on the website more intuitive. Every year I have to call to ask where they are located on the site. February 15, 2013
Rated 5 out of 5 by Strong Keogh Plan Fidelity continues to offer high-customer value through their self-employed (401K) plan. You'll experience the same level of service coupled with the variety of options and tools that you are accustomed to with their brokerage, IRA's and Rollover accounts. The only recomendation is to add an electronic fund transfer option to this account- otherwise it's perfect! February 15, 2013
Rated 5 out of 5 by Excellent for my 401 k Everything is great. Web site is outstanding and investment choices are terrific February 15, 2013
Rated 4 out of 5 by A few more tweaks & it could be the premier site If you could add a self-directed option where one can include real estate in the IRA, not only will this account be more active, but you would attract MANY more new accounts. February 15, 2013
Rated 4 out of 5 by Reliable The program requires the filling out of forms for each investment. This should be able to be done on line and prior information kept to reduce paperwork February 15, 2013
Rated 4 out of 5 by Good product This is a good product for someone who knows how they want to invest. Only negative is lack of ability to transfer money electronically. February 15, 2013
Rated 4 out of 5 by Low Cost, Full Slate of Choices but needs Roth Fidelity self employed 401k is easy to set up, easy to fund directly through a Fidelity account and has a full slate of investment choices similar to a brokerage account. The plan lacks the Roth contribution provision that most large employer 401k plans now have. In addition, the plan cannot be funded directly by a web EFT transfer from a linked bank account - perhaps due to Fidelity wanting to safeguard participants from contributing too much. Instead, the participant needs to call Fidelity to make a transfer from a Fidelity account or can send in a check. February 15, 2013
Rated 3 out of 5 by 401k Satisfied but its ridiculous that I can't make electronic contributions. Mail only? Really? February 15, 2013
Rated 5 out of 5 by Roth Option for S/E 401k Any possibility of including a Roth aspect in the S/E 401k options. Not sure how this would work; Employer contribution vs Employee contribution; but it could give greater flexibility for future tax concerns. February 15, 2013
Rated 2 out of 5 by Phony 1099 When you rollover funds directly to another institution, DO NOT unnecessarily complicate the account owner's tax preparation by issuing a 1099 classifying the transfer as a distribution. it is NOT a distribution! And do not obfuscate by wheedling that "it's a requirement." The very least you could do is indicate on the form that it was a direct rollover and that the account owner was never in possession of the funds. February 15, 2013
Rated 5 out of 5 by Review of my Self-Employed 401(k) I am quite happy with this account but would recommend that whenever there are large amounts of cash balances in this account (or any other Fidelity account), that Fidelity investment professionals may want to contact the account holder and recommend possible investments in order to put that excess cash to work. February 15, 2013
Rated 5 out of 5 by What about loans? If you offered a loan provision this account would be terrific. February 15, 2013
Rated 5 out of 5 by Simple with no management fee An easy to manage plan for sole proprietors. I spend very little time dealing with the paperwork. Investment options are plentiful and customer service is great. All this for no management fee. February 15, 2013
Rated 2 out of 5 by Back office blues Though I like Fidelity and its many value addeds (credit cards, charitable foundation), getting simple things done like receiving timely tax forms is very difficult. February 15, 2013
Rated 5 out of 5 by all the facts are instantly available Of all the services I have used over the last 40 years this is the most comprehensive. February 15, 2013
Rated 4 out of 5 by Convenient but could use more info. More information regarding asset allocation would be useful. February 15, 2013
Rated 5 out of 5 by Easy and Low Cost The Fidelity Self-Employed 401K allows me to save for my future in a very easy to use, low cost manner. The telephone representatives are unfailingly helpful, friendly and knowledgeable. I'm glad Fidelity has implemented the plan with such flexible investment options at such a compelling price. February 15, 2013
Rated 2 out of 5 by Roth option needed! Without a Roth option, this plan is limited and I will need to put money with another company in order to utilize the benefits of a Roth plan. February 15, 2013
Rated 2 out of 5 by 401k SE Fidelity website is difficlut to naviagate, confusing, downloading of statements, etc not easy to get to. February 15, 2013
Rated 5 out of 5 by Excellent product Our LLC loves this retirment plan. Fidelity does a great job and we are very happy. February 15, 2013
Rated 3 out of 5 by Individual 401(k) Review For better and comprehensive plan, I would like to see the following to be implemented by Fidelity: 1. Direct Deposit 2. Roth IRA Option 3. Detail Employee and Profit Sharing contributions in a simple report February 15, 2013
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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.
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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.