Solo 401(k)
Business & Finance abbreviation · Personal Finance
| Stands for | One-participant 401(k) plan |
|---|---|
| Categories | Business & Finance |
Solo 401(k) stands for One-participant 401(k) plan, a personal finance abbreviation.
Retirement plan for self-employed people and business owners with no employees other than a spouse, letting the owner contribute both as "employee" through elective deferrals and as "employer" through profit-sharing. This dual role usually permits larger contributions than a SEP IRA at the same income level.
Example: Once my freelance design income passed six figures, my accountant suggested opening a Solo 401(k).
Usage notes
Also marketed as an individual 401(k), self-employed 401(k) or uni-k. When plan assets exceed $250,000, the owner generally must file Form 5500-EZ each year. Hiring an eligible employee usually ends eligibility, because the plan would then have to cover that worker too.
Related abbreviations
More personal finance abbreviations
- RRSP – Registered Retirement Savings Plan
- SEP IRA – Simplified Employee Pension individual retirement account
- SEPP – Substantially equal periodic payments
- SIMPLE IRA – Savings Incentive Match Plan for Employees individual retirement…
- SIPP – Self-invested personal pension
- SMSF – Self-managed super fund
- SWR – Safe withdrawal rate
- TFSA – Tax-Free Savings Account
- TOD – Transfer on death
- TSP – Thrift Savings Plan
- UGMA – Uniform Gifts to Minors Act
- UTMA – Uniform Transfers to Minors Act