10/28/2025
Do you have your small business structured so that you as a business owner are able to take advantage of all the advantages of being a business owner?
The Solo 401(k) is highly beneficial for small business owners, especially those who are self-employed or run businesses with no full-time employees (other than a spouse). Here’s why
💰 1. Much Higher Contribution Limits
• You can contribute both as the employee and the employer, which allows you to save significantly more than most retirement plans.
⚖️ 2. Tax Flexibility
You can choose traditional (pre-tax) or Roth (after-tax) contributions:
🧾 3. Deductible Business Contributions
Employer contributions are tax-deductible as a business expense, lowering your taxable business income — which is a major tax benefit for small business owners.
🏦 5. Option to Borrow from Your Account
You can take a loan from your Solo 401(k) (up to 50% of your balance or $50,000, whichever is less).
This can provide access to funds without triggering taxes or penalties — as long as it’s repaid on time.
👩🏽💼 6. Great for Business Owners Without Employees
Because it’s designed for a solo entrepreneur or a married couple running a business, it’s easy to manage and has fewer reporting requirements until your account exceeds $250,000.
🌱 7. Builds Wealth and Retirement Security
For entrepreneurs who often skip retirement savings to reinvest in their businesses, the Solo 401(k) creates a structured, tax-advantaged way to build long-term wealth.
