Individual 401(k) Plans

What is an Individual 401(k)?

An Individual 401(k)—also known as an i401(k)—is a retirement plan that can maximize your savings if you're self-employed or if you're a partner in a business whose only employees are the partners and their spouses.

Employer contribution limits

• Employers may contribute up to 25% of eligible compensation

• For self-employed individuals, the effective employer contribution is generally limited to about 20% of adjusted net self-employment income

• The combined 2026 limit for employee deferrals + employer contributions is $72,000

• Catch-up contributions are allowed in addition to the $72,000 limit

Additional Notes

• Employer contributions are generally tax-deductible as a business expense

• Employer contributions are not required every year

• If the plan covers more than just the owner and spouse, employer contributions generally must follow the plan’s allocation formula for all eligible participants

• The maximum compensation that may be taken into account for 2026 is $360,000

Employee contribution limits

• Employees may defer up to 100% of eligible compensation, subject to the annual IRS limit

• 2026 employee deferral limit:

  • $24,500 if under age 50

  • $32,500 if age 50–59 or 64+

  • $35,750 if age 60–63

Contribution Options

• Employee contributions may be made as:

  • Pre-tax contributions

  • Roth (after-tax) contributions

Additional Notes

• Catch-up contributions are available for participants age 50+

• Participants age 60–63 qualify for a higher $11,250 catch-up contribution in 2026

• Rollovers of eligible pre-tax retirement assets are generally permitted if allowed by the plan

• The employee deferral limit is separate from employer contributions, but both count toward the overall Solo 401(k) contribution limits, excluding eligible catch-up contributions