Business Owner Financial Planning

Solo 401(k)

A Retirement Strategy Built For Business Owners

For self-employed individuals and business owners without employees, a Solo 401(k) can offer a powerful way to build retirement savings while taking advantage of the flexibility that comes with owning a business.

But choosing a retirement plan isn't just about how much you can contribute. The right strategy should make sense for your business today while supporting your personal financial goals for the future.

At Andstead Advisors, we help business owners determine whether a Solo 401(k) fits within that bigger picture.

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Why Consider a Solo 401(k)?

One of the advantages of owning a business is having greater control over how you prepare for retirement.

A Solo 401(k) is designed for self-employed individuals and business owners with no eligible employees other than a spouse. Because you can contribute as both an employee and an employer, it can provide greater retirement savings opportunities than some other options available to business owners.

For the right business owner, a Solo 401(k) can help:

+ Build retirement savings
+ Create potential tax advantages
+ Provide flexibility as income changes
+ Coordinate business cash flow with personal retirement goals

The question isn't simply whether you can establish a Solo 401(k). It's whether it is the right strategy for your business and your financial plan.

Is a solo 401(k) right for your business?

A Solo 401(k) may be worth considering if you are self-employed or own a business without eligible employees and want to make retirement savings a larger part of your financial strategy.

However, business structure, income, future hiring plans, cash flow, and other retirement accounts can all influence which type of plan makes the most sense. And as your business evolves, the answer can change.

That's why we look beyond the plan itself. We consider where your business is today, where it's headed, and how your retirement strategy fits alongside your other financial priorities.

How Andstead helps

Evaluate Your options

A Solo 401(k) isn't the only retirement plan available to business owners. We help you compare your options and understand the tradeoffs before determining which structure best fits your circumstances.

Coordinate business & personal planning

Your retirement plan affects more than retirement. Contributions can influence business cash flow, taxes, investments, and your broader wealth-building strategy. We help make sure those decisions aren't being made in isolation.

Put the strategy into action

Once you've determined the appropriate plan, we help coordinate the steps necessary to establish and implement your retirement strategy, working alongside your other professionals when appropriate.

Review the plan as your business evolves

What works for your business today may not be the right solution five years from now. Changes in income, employees, ownership, or personal goals can create reasons to revisit your retirement plan over time.

Part of a bigger business owner strategy

A Solo 401(k) is one tool available to business owners. Depending on your goals and circumstances, other retirement plan strategies may provide different opportunities.

Profit Sharing Plans

Explore how Profit Sharing can provide additional flexibility for business owners and their employees.

Profit Sharing Plans

Business Owner Solutions

See how Andstead brings retirement planning, investment management, tax considerations, succession planning, and personal wealth together.

Business Owner Solutions

Cash Balance Plans

Learn how a Cash Balance Plan may create additional retirement savings opportunities for certain business owners.

Cash Balance Plans

Frequently Asked Questions

1. What is the difference between a Solo 401(k) and a SEP IRA?

Both plans allow self-employed individuals to save for retirement, but they differ in contribution structure, flexibility, and available features. A Solo 401(k) generally allows employee and employer contributions, while a SEP IRA permits employer contributions only. The right choice depends on your income, business structure, and retirement goals.

2. Can my spouse participate in my Solo 401(k)?

Yes. If your spouse earns income from the business, they may also be eligible to participate in the plan, potentially increasing your household's retirement savings.

3. How much can I contribute to a Solo 401(k)?

Contribution limits are established by the IRS and may change annually. The amount you're able to contribute depends on factors such as your income, age, business structure, and whether you're making employee, employer, or catch-up contributions.

4. Can I have both a Solo 401(k) and a Cash Balance Plan?

In some situations, yes. Business owners with higher incomes may benefit from combining retirement plan strategies to increase retirement savings and potentially create additional tax advantages. Whether this approach is appropriate depends on your individual circumstances.

5. What happens if I hire employees?

Hiring eligible employees may affect whether your Solo 401(k) continues to meet IRS requirements. As your business grows, it may become appropriate to transition to a different type of employer-sponsored retirement plan.

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What is the best retirement plan for a small business owner?

Learn how to choose the best retirement plan for your business. Compare Solo 401(k)s, SEP IRAs, and Profit Sharing Plans to determine which option best aligns with your goals, employees, and tax strategy.

Our Process

We create strategies that are tailored to your needs and goals.

Build a retirement strategy around your business

Your business gives you opportunities to approach retirement differently. The key is determining which opportunities make sense for you.

From our Denver Tech Center office, Andstead works with business owners throughout Colorado and across the country to build retirement strategies that support both their businesses and their personal financial goals.

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