The best solo 401(k) providers will have a combination of low fees, a wide range of investment options, and support services to make it easy to maintain your plan. These providers will also have a track record of high customer ratings and reviews.
Here are our picks for the best solo 401(k) providers:
- ShareBuilder 401k: Best overall value for service and administration costs
- Ascensus (formerly Vanguard): Best for comprehensive support services
- Charles Schwab: Best for low fees
- My Solo 401k: Best for audit and compliance support
- Rocket Dollar: Best for alternative investment options
- Fidelity Investments: Best for frequent traders
Best Solo 401(k) Providers at a Glance
Why We Like ShareBuilder 401k
With ShareBuilder 401k, plan expenses are between 23% and 68% less costly than the industry average. It’s important to note that while many fund fees with other providers are usually less than 1%, a small variation in fund fees can result in a difference of hundreds of thousands of dollars in savings over an individual’s lifetime.
ShareBuilder 401k has variable pricing depending on the specific details of your business. In fact, the company offers automatic pricing discounts, designed to provide more advantageous pricing to those with larger account balances. Other features include Roth and tax-deferred options, one-time and recurring ACH contributions, the ability to borrow against existing balances, and access to educational content.
If a solo 401k is not the right product for you, also consider ShareBuilder 401k’s other options such as its safe harbor 401(k), traditional 401(k), and tiered profit-sharing 401(k) plans.
To open an account, you can visit the ShareBuilder 401k website.
Ascensus (formerly Vanguard): Best for Comprehensive Support Services
Why We Like Ascensus
Earlier this year, Ascensus entered into an agreement to acquire several of Vanguard’s retirement products, one of which included its solo 401(k) plan. The new solo 401(k) product is branded under Ascensus as its Individual(k) product, and you can choose from one of three options: Ascensus CoPilot 3(38) daily value, Daily Value, and Non-Daily Value solo 401(k).
- The CoPilot option is geared towards those wanting investment options managed for them with online access to accounts.
- Daily Value accounts are a good option for those wanting more control over their accounts and investment choices.
- Non-Daily Value accounts may be better suited for those who primarily want to oversee investment options made by working with an advisor.
Fees and investment options may vary depending on which of the three solo 401(k) options you choose. However, all Ascensus solo 401(k) plans come with a dedicated support team, Roth capabilities, and the ability to take out loans against your balance.
To get started, you can visit the Ascensus website, where you may submit a request to obtain a plan proposal.
Charles Schwab: Best for Low Fees
Why We Like Charles Schwab
If you prefer managing your solo 401(k) plan on your own, Charles Schwab can be an excellent option. Although it offers minimal administrative services compared to other providers in our guide, it has some of the lowest fees and no account balance minimums. This is something that extends to many of its other investment and banking products, making it an excellent choice if you also want to consolidate multiple financial services with the same company.
Charles Schwab offers 24/7 service and support for its solo 401(k) plans. You’ll also get access to retirement planning tools, the ability to make pre-tax and Roth salary deferrals, and take tax-free distributions on qualified Roth contributions.
You can visit the Charles Schwab website to learn more or find instructions on how you can open an account. There, you can also utilize an online live chat. You may also call the company’s toll-free number to have questions answered.
My Solo 401k: Best for Audit and Compliance Support
Why We Like My Solo 401k
With a solo 401k from My Solo 401k, you can get support for the initial setup and recurring administrative tasks required to keep your plan compliant with tax rules and regulations. In addition to an audit and compliance guarantee, users get access to a compliance team, which consists of a Harvard Law Attorney and a compliance officer with over two decades of experience.
A somewhat unique feature offered by My Solo 401k is the ability to put your funds into alternative investments. If you’re unsure where to begin, the company allows unlimited hours of support for advice on these investment rules. Other benefits include the ability to take out a loan or make a hardship withdrawal.
You can visit the My Solo 401k website to start the process. There, you can complete an online application before making a payment. Once these steps have been completed, you can begin investing.
Rocket Dollar: Best for Alternative Investment Options
Why We Like Rocket Dollar
Rocket Dollar offers two separate plans for its solo 401(k) product. Its silver plan provides basic features such as email support, document storage, and an online dashboard to manage your account easily. Its premium gold plan adds priority support, free wire transfers, expedited services, and tax filing forms.
Unlike many providers, Rocket Dollar allows for alternative investments—your only restriction is that investments must be allowed by the IRS. Some examples can include crowdfunding, real estate, gold, and farmland.
Rocket Dollar requires no minimum opening deposit and also allows for a full 30-day refund if you are unsatisfied with your experience, minus any hard costs incurred by the company. This essentially makes it risk-free for you to try a solo 401(k) through Rocket Dollar.
To start the process, you can visit the Rocket Dollar website. If you are not ready or have questions, you can call the company’s sales department using the toll-free number referenced on its home page.
Fidelity Investments: Best for Frequent Traders
Why We Like Fidelity Investments
Although fund fees for Fidelity Investments can vary, online US stock, ETF, and options trades all carry $0 commissions. As a result, active traders can save on costs compared with many other solo 401(k) providers. You can also consolidate other financial products with Fidelity Investments, as it offers products for life insurance, annuities, health savings accounts, and more.
With its solo 401(k), administrative and tax reporting requirements remain the responsibility of the business owner. With that being said, Fidelity Investments does offer service and guidance from the team. The company also assists with other basic administrative items, such as the preparation of certain plan documents, tax forms, and investment guidance.
To open a solo 401(k), you can visit the Fidelity Investments website. There, you’ll be able to provide your contact information and request a callback for next steps.
How We Chose the Best Solo 401(k) Providers
We selected the best solo 401(k) providers based on the following criteria:
- Fees and other investment costs
- Administrative, audit, and compliance support
- Types of investment options available
- Time required to open an account
- Other plan features and capabilities
- Customer reviews and ratings
Alternatives to a Solo 401(k)
A solo 401(k) won’t be the best option for every business owner. Other retirement plans may provide more suitable eligibility criteria, contribution limits, investment options, and more.
- Traditional or Roth IRA: Anyone with an earned income is eligible to open an IRA, and contribution limits are currently $7,000 for 2024. Traditional IRAs allow for after-tax dollars, while Roth IRA contributions are made with pre-tax dollars. Roth IRAs can be opened by individuals who earn less than $161,000 (or $240,000 for married couples filing joint taxes).
- SEP-IRA: This can be a good option if you don’t want the paperwork or filing requirements of a 401(k). Contribution limits for 2024 are the lesser of $69,000 or 25% of an employee’s net income.
- SIMPLE IRA: SIMPLE IRAs can be a good option for companies wanting to provide benefits to employees without the need to adhere to as many reporting or regulatory requirements. One example of an employee benefit is that SIMPLE IRAs require employers to match employee contributions. This type of retirement account has a lower contribution limit, currently $16,000 for the 2024 tax year.
You can open one of the IRAs listed above through many banks, investment companies, and brokerages. In fact, many 401(k) providers also offer these types of retirement accounts, and you can check out our list of the best 401(k) providers if you’re interested in opening an IRA or other type of retirement account.
Frequently Asked Questions (FAQs)
You must be a business owner with no employees, or employ only your spouse, to be eligible for a solo 401(k). Solo 401(k) accounts allow for a maximum of $69,000 in annual contributions for 2024, while those aged 50 and older may contribute an additional $7,500.
No. In many cases, companies use these terms interchangeably. Before you open an account, however, you should read the terms and conditions to ensure that the retirement account suits your needs and goals.
To avoid penalties, certain tax forms may need to be filed on an annual basis to remain compliant with regulatory requirements. However, due to the complexity of tax law, we recommend speaking with an accountant to determine unique circumstances that may apply to your business.
Bottom Line
Solo 401(k) providers are not all created equal. Each has varying costs, investment options, levels of support, and other features. In selecting a solo 401(k) provider, you should consider the qualities and features most important to you, as selecting the wrong one can be costly and time consuming.
