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SOLO 401(k)

Save for retirement while potentially reducing taxes

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What's a Solo 401(k)?

A Solo 401(k) is a flexible plan offering tax benefits and high contribution limits to self-employed people and owner-only businesses.Footnotes 1,9

Solo 401(k) features

A Solo 401(k) can help you defer the payment of taxes on a higher level of profits (compared to IRA-based retirement plans), as well as plan for your retirement.
Item 1 of 4 Your owner-only business can benefit from a Merrill Small Business Individual 401(k) plan
Item 2 of 4 Make contributions that are generally tax deductible by the businessFootnote 1
Item 3 of 4 Access your money through loans and withdrawals if you choose (taxes may apply)Footnote 2
Item 4 of 4 Take the guesswork out of investing with a menu of funds and model portfoliosFootnotes 3,4

Discover affordable and straightforward pricing

Fee example: Mike has $5,000 in his account. This year, he will have approximately $35 withheld to cover the asset-based fee and $60 ($5 x 12 months) for recordkeeping fees.
Individual 401(k)Footnote 1
Designed for a business owner with no employees, or that person and his or her spouse
Your business pays:
Ascensus Recordkeeping Fees
No setup fee
$0
Monthly administration
$22.50
Monthly recordkeeping
$5 per participant
Annual Asset-Based Fee
Participant servicing through the call center
0.20%
Merrill Fees
Annual Asset-Based Fees
Investment fiduciary services
0.08%
Trading, custodial & financial wellness
0.42%
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Key insights

Contributions to your 401(k) account are made up of your pre-tax salary contributions up to $23,500 in 2025, in any combination of pre-tax or Roth 401(k) contributions. Pre-tax contributions as well as contributions you can make as the business owner reduce your taxable income, up to a combined amount of $70,000 annually, or 25% of compensation, whichever is less. If you're age 50 or older, you can contribute an additional $7,500 annually. You can take a loan out against your 401(k) account.
Tax Benefits (PDF) at Merrill

Tax benefits

Contributions have the potential of growing tax-deferred until withdrawn. Taxes are paid on distributions when withdrawn, at which time you may be in a lower tax bracket.Footnote 1

High contribution limits

You may contribute annually the lesser of 25% of compensation or 20% of net earnings from self-employment, or $70,000 for yourself and each eligible employees for 2025 up to your tax-filing deadline.Footnote 1

Convenience

Receive help from a consultant while opening your account. Easy-to-understand pricing is generally lower than many comparable 401(k) plans. Our simple, secure platform lets you quickly check in.

Investment and fiduciary services

Merrill is responsible for the initial and ongoing selection of the investments within the Plan Menu, simplifying the process for you in managing your fiduciary responsibilities.

What's a key difference between a Solo 401(k) and a SEP IRA?

A Solo 401(k) allows you to contribute through salary deferrals as well as employer contributions. This means you can contribute more to a Solo 401(k) than you can to a SEP IRA, which is eligible for employer contributions only. In addition, try our Retirement Account selector tool.
Learn more  about retirement accounts at Merrill
Differences between a Solo 401(k) and a SEP IRA
Self-employed income
Solo 401(k): $150,000
SEP IRA: $150,000
Maximum salary deferral
Solo 401(k): $23,500
SEP IRA: not applicable
Maximum contribution (Max. 20% of self‑employed income)Footnote †
Solo 401(k): $30,000
SEP IRA: $30,000
Max. total contributionFootnote ††
Solo 401(k): $53,500
SEP IRA: $30,000
And if aged 50 or older, add an additional catch-up contribution to salary deferral
Solo 401(k): $7,500 for total of $61,000
SEP IRA: not applicable
Footnote † Max 25% of self-employed income
Footnote †† If age 50 or older, you may add an additional catch-up contribution to salary deferral. The $7,500 mentioned need to go into this disclosure.
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Or call us at 866.890.4177

Additional resources

Explore all plans available for small business

Get more details about small business retirement plans available at Merrill and find the one that works best for your needs.
SEP IRA plans at Merrill SIMPLE IRA plans at Merrill Small Business 401(k) plans at Merrill
Learn more about small business retirement plans at Merrill

Frequently Asked Questions

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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.
Footnote 1 For more information, visit the IRS website popup.

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

Footnote 3 Plan administrative and record-keeping services for Merrill Small Business 401(k) are provided by Ascensus. The Merrill Small Business 401(k) Advisory Service is an investment advisory program sponsored by Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill"). Merrill offers a broad range of brokerage, investment advisory and other services. There are important differences between brokerage and investment advisory services, including the type of advice and assistance provided, the fees charged, and the rights and obligations of the parties. It is important to understand the differences, particularly when determining which service or services to select. Please refer to the Merrill Small Business Advisory Service Brochure for information on the program including a description of the services and related fees. Educational call center support will be provided by Ascensus. Bank of America Corporation and Ascensus are not affiliated.

Footnote 4 Ascensus provides participant servicing through the Ascensus call center. Merrill provides the investment advisory services, ongoing product management, vendor oversight, trading and custody of plan assets, monthly transaction statements and financial wellness services.

Footnote 5 Fees will be deducted from the business account.

Footnote 6 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.
Footnote 
You have choices about what to do with your 401(k) or other type of plan-sponsored accounts. Depending on your financial circumstances, needs, goals and employer plan terms, you may choose to roll over to an IRA or convert to a Roth IRA, roll over a 401(k) from a prior employer to a 401(k) at your new employer, take a distribution, or leave the account where it is (if applicable). Each choice may offer different investments and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment (particularly with reference to employer stock), and provide different protection from creditors and legal judgments. These are complex choices and should be considered with care. For more information visit our rollover page or call Merrill at 888.637.3343.
Footnote 
The endorsement of Morningstar Investment Management LLC ("Morningstar") for the Merrill Small Business (MSB) 401(k) Program is not made by Merrill in the capacity of a client of Morningstar or as a MSB 401(k) Program client. Cash and non-cash compensation will be provided to Merrill for this endorsement if you enroll in the MSB 401(k) Program. Merrill has material conflicts of interest giving this endorsement of Morningstar on this website because Merrill's compensation for services under the MSB 401(k) Program is dependent on customer use of Morningstar's investment advisory services. Lack of customer's use of Morningstar's investment advisory services would result in Merrill unable to receive compensation for this product. For more information about the compensation provided to or received by Merrill, Merrill's material conflicts of interest in giving the endorsement, and disclosure of past disciplinary matters of Merrill, please read more information here (PDF).
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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, registered investment adviser, Member SIPC popup and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
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