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Our Criteria
We evaluated solo 401(k) accounts from brokerage firms that are available in all 50 states, ultimately only featuring those that fit our strict criteria. To be included on this list, providers must:
Have at least $1 trillion in assets under management
Offer a solo 401(k) account with no setup or maintenance fees
Understanding Our Methodology
To choose the best solo 401(k) providers in 2023, Annuity.org’s independent editorial team carefully considered solo 401(k) offerings from the top brokerage firms in the country.
Annuity.org uses a strict and fact-based methodology to determine which companies qualify for our rankings. To be considered, a provider must offer solo 401(k) accounts with no setup or maintenance fees.
We also considered other factors, including other fees associated with the accounts, the investment options customers can choose for their portfolio and the availability of traditional and Roth 401(k)s.
Learn more about our broader Editorial Guidelines.
A solo 401(k) is a tax-deferred retirement savings plan for self-employed individuals or small business owners with no full-time employees other than a spouse (if applicable). Business owners can make contributions as both an employee and an employer, thereby allowing for substantial contributions.
Solo 401(k)s have very specific rules associated with them as well as administrative responsibilities and costs. Consult with a financial or tax advisor to assist you as needed.
Barbara O’Neill, Ph.D., CFP®, AFC®, CRPC®Owner and CEO of Money TalkWith an extensive 41-year tenure at Rutgers University, Barbara O’Neill has established herself as a highly knowledgeable personal finance expert. As a Certified Financial Planner™ and Accredited Financial Counselor™ professional, she possesses a wealth of expertise in the field. She currently serves as the owner and CEO of Money Talk, where she actively engages in writing, speaking and reviewing personal finance content. In 2020, she notably authored the book Flipping a Switch, delving into various aspects of personal finance.
Editor’s Choice: Best Overall
Provider Details
E*TRADE is an online brokerage firm that pioneered online investment trading for consumers in the early 1980s. The global financial services firm Morgan Stanley acquired E*TRADE in 2020.
Pros & Cons
Pros
- No account fees and no commissions on stock, ETF or mutual funds
- Offers both Roth and traditional 401(k)s
- Supports 401(k) loans
- Over 6,500 mutual funds and 50,000+ bond and CD offerings
Cons
- $1 per bond charge for online secondary market trades ($10 minimum)
- $0.50 to $0.65 charge per contract for options trading
Our Take
E*TRADE tops our list for best solo 401(k) providers due to its wealth of investment choices and competitive pricing. Investors who choose E*TRADE won’t owe any account fees and can choose to open a Roth or traditional solo 401(k).
Most trades won’t incur any commissions, and E*TRADE is transparent about which options trades do charge fees. E*TRADE also allows investors to take a loan against their 401(k).
A solo 401(k) from E*TRADE comes with a wide variety of investment options, including over 50,000 bond and CD offerings, making this an ideal choice for investors looking to build a diverse portfolio.
Best Beginner-Friendly
Provider Details
Fidelity Investments is one of the largest financial services firms in the nation with over $3 trillion in assets under management. Fidelity serves more than 40 million individual investors in America and nine other countries
Pros & Cons
Pros
- No opening cost, closing cost or annual fees
- Over 10,000 funds to choose from
- Robust tools and resources including online courses for investing beginners
Cons
- No Roth 401(k) offering
- No 401(k) loans allowed
- Must send a check to make contributions
Our Take
Those new to managing their own 401(k) might prefer the extensive tools and resources provided by Fidelity Investments. The brokerage’s comprehensive resources for customers include withdrawal calculators, retirement calculators that factor in Social Security distributions, chatbot support, reporting features and the Learning Center, where beginners can access four-week virtual courses to improve their trading skills.
On top of these features, Fidelity’s self-employed 401(k) also has no opening or closing costs or annual fees, and investors pay no commission for online trading of domestic stocks, ETFs and options. You can build your portfolio with investment choices including stocks, bonds, ETFs, CDs and over 10,000 mutual funds.
Best for Large Portfolios
Provider Details
Founded by legendary business magnate John Bogle, Vanguard stands as the largest investment firm in the nation today. The company is best known for its selection of low-cost index and mutual funds.
Pros & Cons
Pros
- No setup fee
- $0 commission for stocks, ETFs and Vanguard mutual funds
- 160 Vanguard mutual funds have no transaction fee
- Offers both Roth and traditional 401(k)s
Cons
- $20 a year fee for each fund held in the account, waived if participant has at least $50,000 in qualifying Vanguard assets
- No 401(k) loans allowed
- Can only invest in Vanguard mutual funds
Our Take
Vanguard is the only firm on our list that charges an annual fee for solo 401(k) plans, but the fee is waived for portfolios with at least $50,000 invested in qualifying assets. The firm also allows investors to rollover an existing IRA into a solo 401(k). For this reason, Vanguard is an excellent option for those who want to move existing retirement savings into a solo 401(k).
Vanguard only allows 401(k) plan holders to invest in proprietary mutual funds, but these funds hold a strong reputation as some of the best on the market. Over a hundred of these funds charge no transaction fees, and most have competitively low expense ratios.
Best for Varied Investment Options
Provider Details
TD Ameritrade is a brokerage providing online stock trading, investing and retirement planning services to over 11 million customers. The company has since been acquired and is currently being integrated into Charles Schwab.
Pros & Cons
Pros
- $0 commission for ETFs, stocks and mutual funds
- Wide variety of investment options including 13,000+ mutual funds
- Interactive tools, third-party research resources, personalized reporting and analysis
Cons
- No Roth 401(k) plan
- All accounts will move to Charles Schwab after acquisition
Our Take
TD Ameritrade’s solo 401(k) is ideal for investors who want a hands-on, highly customizable retirement plan. The company’s interactive tools and innovative trading platform help investors access third-party research and educational resources, test strategies, monitor potential risks and analyze market shifts.
Investors can build their 401(k) portfolio at TD Ameritrade with a wealth of investment choices, from stocks, bonds, ETFs and mutual funds to annuities, futures, forex and margin trading. These offerings make TD Ameritrade stand out, but investors should be aware that the company’s recent acquisition by Charles Schwab means change is likely on the horizon.
Best for Good Customer Support
Provider Details
In the fifty years since its founding, Charles Schwab has built a reputation for excellence as a brokerage firm. The corporation was named one of the Best Online Brokers of 2022 and Most Trusted Financial Companies of 2022 by Investor’s Business Daily.
Pros & Cons
Pros
- No fees for monthly service, account opening or maintenance
- No commission on online equity trades or Schwab ETF trades
- Award-winning 24/7 customer service support
- Over 2,000 ETFs and 7,000 mutual funds to choose from
Cons
- Doesn’t offer Roth 401(k)s
- Doesn’t allow 401(k) loans
- Fees for non-Schwab fund trading
Our Take
The individual 401(k) plan from Charles Schwab features no monthly fees and no commission for online trades of stocks or Schwab ETFs. Although it doesn’t offer a Roth 401(k) option, investors have a wealth of investment options to build their traditional 401(k) portfolios, including over 2,000 ETFs and 7,000 mutual funds.
Charles Schwab’s dedication to putting customers first has earned them a reputation for customer satisfaction. Schwab scored the highest in overall investor satisfaction in J.D Power’s 2023 Full-Service Investor Satisfaction Study. The company provides 24/7 customer service, and their StreetSmart Edge® online trading platform makes managing your portfolio easy and accessible.
How Does a Solo 401(k) Work?
Solo 401(k) plans, also called individual 401(k)s or one-participant 401(k)s, work similarly to a traditional 401(k) plan. The difference is that a solo 401(k) usually covers only one self-employed person, not multiple people working for the same company.
A solo 401(k) account is designed for self-employed business owners with no employees. You may also be eligible for a solo 401(k) for you and your spouse if you both are the only employees of the business you own.
With a solo 401(k), you as the business owner can make contributions as both an employee and an employer. As an employer, you can contribute up to 25% of your compensation as an employee. As an employee, you can contribute up to 100% of your compensation in elective deferrals up to the annual contribution limit.
Just like a regular 401(k), the IRS places contribution limits on solo 401(k)s. In 2023, participants can contribute up to $22,500 in elective deferrals as an employee. Total contributions to the participant’s account (employee and employer contributions together) cannot exceed $66,000.
Who Should Get a Solo 401(k)?
You might benefit from a solo 401(k) if you’re an independent contractor, sole proprietor or have an owner-only corporation. Self-employed people who choose individual 401(k)s often do so because they want a retirement plan similar to what they might get if they worked for a larger corporation.
Having a solo 401(k) can also give your business some advantages during tax time. If you own an incorporated business, you can deduct your 401(k) contributions as a business expense.
Those who own unincorporated businesses can deduct contributions from their personal income when they file their taxes.
Frequently Asked Questions About Solo 401(k) Accounts
Most big brokerages offer self-directed solo 401(k)s, so you can manage your contributions and allocations through an online platform.
Solo 401(k) accounts are different from traditional 401(k)s because they are designed to cover one self-employed person who makes contributions both as an employee and an employer.
Yes, the IRS limits elective deferral contributions for solo 401(k)s to $22,500 in 2023. Total contributions cannot exceed $66,000 in 2023.
