Solo 401(k) FAQs

Solo 401(k) FAQs Overview

A Security Benefit Solo 401(k) offers sole proprietors the opportunity to save for retirement using many of the advantages of a traditional 401(k), including: 

  • tax-deductible contributions 
  • annual contributions that exceed 25% of compensation
  • Roth contribution availability
  • catch-up contributions for people 50 and over
  • loans or hardship withdrawals
  • rollovers from other retirement plans

Most importantly, Security Benefit's straightforward administrative requirements make these plans easy to establish and maintain for you and your clients.

Below are some frequently asked questions and you can find more on Establishing a Solo 401(k), Contributing to a Solo 401(k), and Rollovers and Distributions. Visit our Solo 401(k) page to learn about the Security Benefit Solo 401(k).

What is a Solo 401(k) plan?

A Solo 401(k) plan is a qualified retirement plan designed for business owners with no employees, including real estate agents, registered representatives, farmers, doctors, and lawyers. 

How long have Solo 401(k) plans been available?

Congress passed the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) in 2001, which amended the tax law to allow self-employed individuals to access a 401(k)-style retirement platform. This platform became popularly known as the Solo 401(k) plan.

Prior to 2001, a retirement platform unique to self-employed workers existed – using SEP IRA and Keogh plans – but it lacked many of the benefits of the typical corporate 401(k) platform, such as employee salary deferrals.

What are the benefits versus other plan types like a SEP IRA?

A Solo 401(k) plan has many advantages over SEP IRAs including:

  • larger contribution amounts as a percent of compensation
  • Roth contribution availability
  • catch-up contributions for people 50 and over
  • loans
Does a Solo 401(k) fall under ERISA?

A Solo 401(k) plan is not subject to the complex ERISA rules since it only covers owners and their spouses. There is a requirement to file a 5500-EZ form once the assets exceed $250,000.

What other resources are available about Solo 401(k) plans?

Additional information about Solo 401(k) plans can be found on the IRS website at To learn more about Security Benefit's Solo 401(k) plans, visit our Solo 401(k) webpage

Does a Security Benefit Solo 401(k) allow loans, hardship withdrawals and/or in-service withdrawals?

Yes, our Solo 401(k) plan allows for loans as well as both hardship withdrawals and in-service withdrawals. 

What tax reporting is required with a Solo 401(k) plan?

Once a Solo 401(k) plan reaches $250,000 in assets, a Form 5500-EZ must be filed with the IRS.

Who maintains the plan documents for a Security Benefit Solo 401(k) plan?

We will keep the plan documents for Solo 401(k) plans.


Security Benefit, its affiliates and subsidiaries, and their respective employees and representatives, do not provide tax, accounting, or legal advice. Any statements contained herein concerning taxes were not intended as and should not be construed as tax advice, nor should they be used for the purpose of avoiding federal, state, or local taxes and/or tax penalties. Please seek independent tax, accounting, or legal advice. 

Services are offered through Security Distributors, a subsidiary of Security Benefit Corporation (Security Benefit).

SB-10036-84 | 2023-08-23