Solo 401(k) for Self-Employed & Small Business

Q: Can I start a 401(k) if I'm self employed without employees?

Yes, you can. An Individual 401(k) is designed for a business owner without W-2 employees and, if married, the owner's spouse. Learn more about retirement plans for 1099 contractors .

Q: How much can I contribute annually?

You can make contributions as an employee, through salary deferrals, and also as an employer, through contributions made by your business. As an employee, you can contribute up to $19,500 or $26,000 if you're 50 and older (limits for 2019 are $19,000 or $25,000). The employer contribution may not exceed 25% of the employee's compensation (20% of self-employed net earnings). The maximum combined total annual contribution is $57,000 ($56,000 for 2019), which includes the employee and employer contributions.

Q: What are the potential tax benefits?

Employer contributions and plan expenses are generally tax deductible for the business. Pre-tax salary contributions and any earnings are not taxed until withdrawn, and Roth (post-tax) contributions may be withdrawn tax free after age 59 1/2

Q: Can I withdraw funds or take a loan from my Individual 401(k) account?

Yes. Loans and withdrawals are available if you choose these features in your plan, though you may incur tax penalties and/or fees. For more information, read 'Know the facts about loans and withdrawals' (PDF) .

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Features

Receive business and personal tax breaks

Contributions you make as the business owner are generally tax deductible by your business. You may also contribute as an employee, reducing your personal taxes. Total contribution limits, as an employee and employer, are nearly 10 times higher than a Traditional IRA.

Get advice and guidance

Funds and model portfolios — selected and managed by Morningstar Investment Management LLC — help take the guesswork out of investing. You also have access to educational call-center support from Plan Administrators, Inc. (PAi) and a suite of online investor‑education resources.Footnotes ^{1, 3}

Contribute as your cash flow allows

With an Individual (or solo) 401(k), you decide how much to contribute, and you can choose to contribute as your cash flow allows. You can also make contributions whether or not you have a profit.

Understand your retirement journey

PAi's CoPilot includes Years of Retirement that helps you understand how many years you can afford to be retired.

Access your money when you need it

Loans and withdrawals are available if you choose these features in your plan. Always be sure to understand the tax implications before taking a loan.Footnote ²

Stay updated with Alerts

PAi's CoPilot offers proactive, relevant messaging that encourages you to participate in your retirement experience.

Important 2020 plan establishment deadlines

All other 401(k) plans: 12/28/2020

Interested in learning more? Read the Individual 401(k) fact sheet (PDF)

Contribution
limits nearly

10x

a Traditional IRA

Pricing and fees

Straightforward, low-cost pricing for your businessFootnote ⁴

One-time setup feeFootnote *:

$100

Monthly administration:

$20 or $25Footnote ^†

Footnote * Setup fee is non-refundable
Footnote ^† Businesses with less than $250,000 in plan assets will pay $20. Businesses with more than $250,000 in plan assets will pay $25.

Fees paid by each individual participating in the planFootnote ⁵

Monthly recordkeeping feesFootnote ¹:

Annual asset-based costsFootnotes ^††:

0.52%

Footnotes ^†† For investment fiduciary services (0.07%); participant servicing through the call center (0.20%); and account services for the ongoing product management, vendor oversight, trading and custodial services (0.25%)Footnotes ^{1, 3}

Fees example: Molly has $10,000 in her account. This year, she will have approximately $52 withheld to cover the asset-based fee and $36 ($3 x 12 months) withheld for recordkeeping fees.

How to open a 401(k)

Answer a few questions

Tell us about yourself and your business, and we'll customize a plan to fit your needs.

Review your proposal

You can modify the features, if you wish, before purchasing.

Purchase your plan

After reviewing your proposal, you can purchase your plan online in just a few minutes.

Request a 401(k) proposal Request a 401(k) proposal

Receive a custom proposal online in as little as 5 minutes. Need help? Step-by-step guidance is available by phone from a PAiFootnote ¹ 401(k) Consultant.

FAQs

Can I start a 401(k) if I'm self employed without employees?

How much can I contribute annually?

What are the potential tax benefits?

Can I withdraw funds or take a loan from my Individual 401(k) account?

See all Individual 401(k) FAQs

More about small business retirement plans

Self employed

SEP IRA

Compare self-employed plans

Employer

Small Business 401(k)

SEP IRA

SIMPLE IRA

Let us help you find your best retirement options

More about small business retirement plans

Self employed

SEP IRA

Compare self-employed plans

Employer

Small Business 401(k)

SEP IRA

SIMPLE IRA

Let us help you find your best retirement options

Need help setting up your plan?

Call 866.890.4177866.890.4177

Mon-Fri 8 a.m. - 5 p.m. CT to speak with a PAiFootnote ¹ 401(k) Consultant

Find a local
Financial Solutions
Advisor

Important disclosures

Footnote ¹ Plan- and participant-level administrative and recordkeeping services for Merrill Individual 401(k)s are provided by Plan Administrators, Inc. (PAi). Investment advisory and fiduciary services are provided by Morningstar Investment Management LLC, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. Morningstar Investment Management LLC is a provider of investment management solutions, including investment advisory and retirement plan services. Educational call center support will be provided by PAi. Bank of America Corporation, PAi and Morningstar Investment Management LLC are not affiliated.

Footnote ² Please consider the advantages and disadvantages of taking a loan before initiating one.

Footnote ³ Morningstar Investment Management LLC selects the investments and is responsible for the ongoing monitoring and maintenance of the investments and model portfolios. Merrill is responsible for ongoing product management and vendor oversight, as well as trading and custodial services of plan assets and monthly transaction statements.

Footnote ⁴ Fees will be deducted from the business account.

Footnote ⁵ Fees will be deducted from each participant's account.

Footnote

Contribution and compensation limits are subject to a cost-of-living adjustment annually pursuant to the Internal Revenue Code. Contribution and compensation limits for subsequent years may vary.

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Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.

Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

This material is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. Merrill offers a broad range of brokerage, investment advisory (including financial planning) and other services. Additional information is available in our Client Relationship Summary (PDF).

Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp."). MLPF&S is a registered broker-dealer, a registered investment adviser, Member Securities Investor Protection (SIPC) popup and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp").

Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and wholly owned subsidiary of BofA Corp.

Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation.

Investment products offered through MLPF&S and insurance and annuity products offered through MLLA:

Are Not FDIC Insured	Are Not Bank Guaranteed	May Lose Value
Are Not Deposits	Are Not Insured by Any Federal Government Agency	Are Not a Condition to Any Banking Service or Activity

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With Merrill Edge Self‑Directed, get unlimited free online stock, ETF and option trades with no trade or balance minimumsFootnote double asterisk **

Options contracts and other fees may applyFootnote asterisk *

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Footnote asterisk

Other fees may apply. Free and $0 means there is no commission charged for these trades. $0 option trades are subject to a $0.65 per-contract fee. Sales are subject to a transaction fee of between $0.01 and $0.03 per $1,000 of principal. There are costs associated with owning ETFs. To learn more about Merrill pricing, visit our Pricing page.

Footnote double asterisk

Merrill waives its commissions for all online stock, ETF and option trades placed in a Merrill Edge^® Self-Directed brokerage account. Brokerage fees associated with, but not limited to, margin transactions, special stock registration/gifting, account transfer and processing and termination apply. $0 option trades are subject to a $0.65 per-contract fee. Other fees and restrictions may apply. Pricing is subject to change without advance notice.

Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.

The performance data contained herein represents past performance which does not guarantee future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. For performance information current to the most recent month end, please contact us.

Net Asset Value (NAV) returns are based on the prior-day closing NAV value at 4 p.m. ET. NAV returns assume the reinvestment of all dividend and capital gain distributions at NAV when paid.

Market price returns are based on the prior-day closing market price, which is the average of the midpoint bid-ask prices at 4 p.m. ET. Market price returns do not represent the returns an investor would receive if shares were traded at other times.

Returns include fees and applicable loads. Since Inception returns are provided for funds with less than 10 years of history and are as of the fund's inception date. 10 year returns are provided for funds with greater than 10 years of history.

Before investing consider carefully the investment objectives, risks, and charges and expenses of the fund, including management fees, other expenses and special risks. This and other information may be found in each fund's prospectus or summary prospectus, if available. Always read the prospectus or summary prospectus carefully before you invest or send money. Prospectuses can be obtained by contacting us.

Expense Ratio – Gross Expense Ratio is the total annual operating expense (before waivers or reimbursements) from the fund's most recent prospectus. You should also review the fund's detailed annual fund operating expenses which are provided in the fund's prospectus.

Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation ("BofA Corp.").

Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and wholly owned subsidiary of BofA Corp.

Investment products offered through MLPF&S and insurance and annuity products offered through Merrill Lynch Life Agency Inc.:

Are Not FDIC Insured	Are Not Bank Guaranteed	May Lose Value
Are Not Deposits	Are Not Insured by Any Federal Government Agency	Are Not a Condition to Any Banking Service or Activity

Merrill A Bank of America Company Merrill A Bank of America Company

3019973

AC260ED1 (JCF*******801)

Individual 401(k)

Small Business Individual 401(k)

Reduce your business & personal taxable income

Receive business and personal tax breaks

Get advice and guidance

Contribute as your cash flow allows

Understand your retirement journey

Access your money when you need it

Stay updated with Alerts

Contribution limits nearly 10x a Traditional IRA

Pricing and fees

Pricing and fees

Straightforward, low-cost pricing for your businessFootnote ⁴

Fees paid by each individual participating in the planFootnote ⁵

How to open a 401(k)

How to open a 401(k)

FAQs

FAQs

More about small business retirement plans

Self employed

Employer

More about small business retirement plans

Self employed

Employer

Need help setting up your plan?

Important disclosures

I'd Like to

Discover Merrill

Contact Us

Unlimited $0 Trades