Solo 401(k), SEP, or SIMPLE?
Three plans, three very different ceilings on the same income. Enter your numbers once and see how much each one lets you put away this year.
| Solo 401(k) | SEP IRA | SIMPLE IRA |
|---|
What else separates them
| Solo 401(k) | SEP IRA | SIMPLE IRA | |
|---|---|---|---|
| Roth option | Yes | Yes, if the provider offers it | Yes, if the provider offers it |
| Loans | Can be allowed | No | No |
| Latest setup | Generally by the tax filing deadline | Tax filing deadline, including extensions | October 1 of the plan year |
| Annual filing | Form 5500-EZ once assets exceed $250,000 | None | None |
| Covering employees | Not allowed | Same percentage for everyone eligible | Required match or 2% contribution |
The SIMPLE column uses the higher SECURE 2.0 limits for employers with 25 or fewer employees, which applies to most one-person businesses. The plan document has to reflect it, so confirm with your provider.
The right plan is not always the biggest number.
Cash flow, employees, whether you want a Roth option, and how much paperwork you will tolerate all change the answer. We design and administer Solo 401(k) plans and work alongside your CPA, so the plan matches the return.
Assumptions and limits. 2026 figures per IRS: 401(k) deferral $24,500, catch-up $8,000 at 50 and over or $11,250 at ages 60 through 63; annual additions limit $72,000 before catch-up; compensation limit $360,000; Social Security wage base $184,500; SIMPLE IRA deferral $18,100 for employers with 25 or fewer employees, catch-up $3,850 at 50 and over or $5,250 at ages 60 through 63. Sole proprietor figures use net earnings from self-employment of 92.35% of profit. Solo 401(k) and SEP employer contributions are 20% of profit after the deduction for one half of self-employment tax, or 25% of W-2 wages for an S-corporation. The SIMPLE match is modeled as a dollar-for-dollar match up to 3% of compensation; for a sole proprietor, compensation is net earnings from self-employment before the self-employment tax deduction. Assumes a full-year plan, no other employer plan, and that each plan's document permits the maximum. Setup deadlines are general and depend on plan type and provider. This tool is general education, not tax, legal, or investment advice, and not a recommendation of any plan. Confirm every figure with your tax professional.