Individual 401K Plans
Self-Managed & Self-Directed Benefits
Owning your own business can be incredibly rewarding. However, being an entrepreneur requires different considerations for retirement than just being an employee.
Placing your retirement funds in a Solo 401(k) or self-directed 401(k) can offer many benefits including the freedom to invest what you want as you do in your business.
Find out how a Solo 401(k) differs from traditional retirement plans and why it might make sense for your business.
What Is a Solo 401(k)?
A Solo 401(k), also called an Individual 401(k), is a retirement account designed for self-employed business owners with no full-time employees other than a spouse.
It works much like a standard 401(k). You contribute a portion of your income to the account, and because you’re both the employer and the employee, you can contribute in both roles.
If your spouse earns income from the business, they can participate too, letting you save for both of your retirements under one plan.
Solo 401(k) Structure and Contribution Limits
Solo 401(k)s enable employers to contribute in two ways:
- Elective Deferrals: Self-employed individuals can contribute up to 100% of their compensation into the fund up until contribution limits: ($24,500 in 2025 for ages under 50 or $31,000 for ages 50 and older).
- Employer Nonelective Contributions: Contribute up to 25% of your employee compensation (defined by the plan) or a special amount calculated for self-employed individuals (calculated here).
- Total contribution limits for Solo 401(k) plans total $72,000 in plan year 2025 with a catch-up rate of $7,500 for anyone 50 or older.
Benefits of a Solo 401(k)
Different types of investment vehicles have different benefits. For example, unlike Roth IRAs, 401(k)s don’t have income limits, meaning anyone, including business owners, can contribute to one.
While Solo 401(k) plans have their own rules and regulations, they are also ripe with benefits.
Tax-Benefits
Choose between making contributions via a Roth plan, tax-deductible through a traditional plan, or using a hybrid of the two methods.
Large Contributions
You can put more money in this plan, in excess of $70,000 each year per person. For investors who are age 50 or older, there is a catchup contribution option that will allow them to contribute an additional $7,500 in 2025.
Choose Your Tax Benefit
Contributions can be made via Roth, tax deductible (traditional) or both.
No Income Limits
You can make Roth contributions directly to the plan even if you are a high income earner.
Flexible Contributions
You have the flexibility to change your contributions from year to year based on your income and profitability.
Personal Line of Credit
You can create a personal or business “line of credit” by personally taking loans from your Individual (k) and paying the interest back to your account.
Tax Free Loans
Access the money in your retirement account when you need it by taking out a loan from your 401(k) without paying taxes or penalties, just interest to yourself.
Maximize Your Retirement Contributions—On Your Terms
An Individual 401(k) allows you to contribute as both employer and employee, potentially far more than an IRA. Let’s see how much you may be eligible to contribute.
Proven Success. Trusted Leadership. Real Impact.
At Horizon Trust, we make it simple to open and manage a Self-Directed IRA, so you can take control of your retirement on your terms. Founded by Greg Herlean, who has overseen more than $1.3 billion in real estate transactions, Horizon Trust was built by someone who understands what self-directed investors need: personalized service, fast transactions, and a custodian that stays out of your way.
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Why Invest with Horizon Trust?
Complete Control
The ability to self-direct your individual(k) account. You can invest in traditional investments like stocks and mutual funds but also can invest in real estate, FOREX, trust deeds, notes, tax liens, precious metals and virtually anything else you can imagine.
One call does it all
Horizon Trust is the only company you will need to call to answer questions and service your account. No more calling your custodian and your administrator to get things done.
Flexible Fee Payment Options
Unlike other plans that require you to write a check upfront for all your fees, you can choose to pay your fees by check, credit card or have them deducted from your account once it is set up.*
Simplified paperwork
Our qualified plan application is short and straightforward unlike most Indi(k) paperwork.
Save Money
We offer the most competitive fees in the industry. Now, everyone can afford to have an Individual(k).
*If you choose to pay your fees from inside your account simply pay the set-up fee of $350. All other fees will be deducted once your plan is established and your transfer, rollover or contribution is received.
Individual 401(k) FAQs
What’s the difference between a 401(k) and Solo 401(k)?
Solo 401(k)s are designed specifically for sole proprietors of businesses and are classified by the IRS as One-Participant 401(k) Plans. Further, Solo 401(k)s offer much more investment freedom and are not restricted by what individuals can invest in.
Who can open a Solo 401(k)?
Business owners who have zero employees are eligible to invest in a Solo 401(k).
How do I qualify for a Solo 401(k)?
To qualify for a Solo 401(k), you need to be an established business owner, under the tax code, and have no full-time employees.
Can I list my spouse on my Solo 401(k)?
Yes, you can also involve your spouse with your Solo 401(k).
Are there any restrictions on what I can rollover to my Solo 401(k)?
The IRS allows you to rollover any funds from an existing retirement account, except for a Roth IRA.
What can I invest in with a Solo 401(k)?
Similarly to traditional retirement accounts, you can invest in stocks, bonds, and mutual funds with your Solo 401(k). However, you can also invest in real estate and other non-traditional investments. There are fewer limitations on Solo 401(k) accounts.
Is there a limit on the funds I can transfer to a Solo 401(k)?
No, there is no limit on the funds you can transfer without triggering a tax.
How much money do I need to start a Solo 401(k)?
There is no minimum income requirement to start a Solo 401(k).
Open a Self-Directed 401(k) in 4 Simple Steps
Maximize Your Retirement Contributions—On Your Terms
At Horizon Trust, we believe in turning dreams into reality. Founded by Greg Herlean, who has masterfully managed over $1.3 billion in real estate transactions, our mission is to empower you to take control of your financial destiny using the tax-free advantages of a Self-Directed IRA. Retire wealthy.
Here’s how it works:
STEP 1
Open Your Account
Fast and guided onboarding from our concierge specialists.
STEP 2
(Optional) Establish an LLC
Use our LLC formation services to establish checkbook control.
STEP 4
Grow Your Wealth
Build tax-free compound interest that you can reinvest into your account and retire early.
STEP 3
Fund & Invest
Perform your due diligence and put your money into assets you trust.
Disclaimer
Horizon Trust Company is an independent passive Custodian and is not associated or affiliated with and does not recommend, promote or advise any specific investment, investment opportunity, investment sponsor, investment company or investment promoter or any agents, employees, representatives or other of such firms or entities. Investments are not FDIC Insured, offer no bank guarantee and may lose value.
5-Star Rated Custodian
Your Future, Backed by Our Track Record
Trusted by investors nationwide to take control of their retirement through Self-Directed IRAs.
Helping clients grow and protect wealth across real estate, crypto, and private investments.