Individual 401(k) Plan with Traditional and Roth 401(k) contributions

Retirement investing for the self-employed

  • For self-employed workers and their spouses to maximize retirement savings
  • Generous contribution limits and simpler to administer than a typical 401(k)
  • Tax-deferred growth potential
  • Choose to make traditional 401(k) contributions, Roth 401(k) contributions, or both
  • Use the Small Business Selector to find a plan

Overall Contribution limits
(under age 50)

Maximum total contributions up to $69,000 for 2024 ($66,000 for 2023) annual contributions, or 100% of compensation, whichever is less, with compensation taken into account capped at $345,000 for 2024 ($330,000 for 2023)

In addition to the overall contribution limits, employer contributions generally cannot exceed 25% of the participant's compensation (subject to the compensation cap), and salary deferral contributions cannot exceed the lesser of 100% of the participant's compensation or $23,000 in 2024 ($22,500 for 2023)

Overall Contribution limits
(age 50 or over)

Maximum total contributions up to $76,500 ($69,000 annual additions limit, plus $7,500 salary deferral catch up contribution limit) for 2024 ($73,500 for 2023) annual contributions, or 100% of compensation, whichever is less, with compensation taken into account capped at $345,000 for 2024 ($330,000 for 2023)

In addition to the overall contribution limits, employer contributions generally cannot exceed 25% of the participant's compensation (subject to the compensation cap), and salary deferral contributions cannot exceed the lesser of 100% of the participant's compensation or $30,500 in 2024 ($30,000 for 2023)

Why Traditional Individual & Roth Individual 401(k) Plans?


Eligibility information

Available for self-employed individuals with no additional employees other than a spouse


Flexibility

Diversify with a choice of mutual funds, ETFs, stocks, and more


Ability to borrow against retirement assets

Loans are available from a traditional or Roth Individual 401(k) account


Reduced administrative requirements

For example, IRS Form 5500 filing is generally not required until the account value reaches $250,000

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Traditional and Roth Individual 401(k) FAQs

See all FAQs

Already have an Individual 401(k)? Contribute now.

  • Individual 401(k) allows for both, salary deferral and profit sharing contributions
  • Salary deferrals can be split between the pre-tax Individual 401(k) account and the after-tax Roth Individual 401(k) account
  • Certain non-elective contributions and matching contributions made after December 29, 2022, can be designated as Roth contributions and deposited to the Roth Individual 401(k) account

Yes. However, total annual employee contributions cannot exceed the 401(k) contribution limits ($23,000 for 2024 or $30,500 if age 50 or older for 2024). Other restrictions and rules may apply in this situation; consult your tax and legal advisor.

If employees are hired, generally, they would have to be included in the plan, which will add more complex plan administration rules, expenses, and may cause the need to terminate the Individual 401(k) plan. A business owner may want to consider other retirement plans if planning on hiring employees in the future. Consider using the Small Business Plan Selector Tool to see other options.

Yes. Generally, each self-employed partner will be able to open a separate Individual 401(k) plan.

Business owners are generally exempt from filing IRS Form 5500 if the Individual 401(k) plan has less than $250,000 in assets at the end of the year. Plans with $250,000 or more in assets at the end of the year are generally required to file Form 5500.

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