SEP IRA and Solo 401(k)

Self employed?
Meet two powerful retirement plans

Take full advantage of your self-employed status with flexible retirement plans built just for you.

Open a Solo 401(k)
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Learn about SEP IRAs
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Solo 401(k)? SEP IRA? Let’s break it down.
These are the two main retirement options that typically offer the most tax advantages. Here are the key differences:

  • Solo 401(k)

    $49/month base fee + 0.15%/year

    Just like a regular 401(k), but without the complexity of testing. You can contribute as both employer and employee, take out loans, and qualify for up to $500 in tax credits the first three years.1,2,3

  • SEP IRA

    $8/month base fee + 0.08%/year

    Higher contribution limits than a traditional IRA, but missing key advantages of a Solo 401(k), like employee contributions and loans. Can be a solid option for those just starting their self-employed journey.1,2

How Guideline’s Solo 401(k) and SEP IRA stack up

Solo 401(k)
SEP IRA
  • Contribution limits
    $70,0004
    $70,0004
  • Pre- and post-tax contribution options
    Yes
    No
  • Catch-up contributions for savers over 50
    Yes
    Up to $7,500 or $11,250/year4
    No
  • Contribute as employer
    Yes
    Yes
  • Contribute as employee
    Yes
    No
  • Expert-built portfolios
    Yes
    Yes
  • Easy admin and automated compliance
    Yes
    N/A
  • Scales to standard 401(k)
    Yes
    No
  • Loans available
    Yes
    No
  • Tax credits available
    Yes3
    Yes3
  • Mega backdoor Roth eligible
    Yes
    N/A
  • Automated compliance
  • 100% digital contributions
  • Easy plan admin
  • Hands-free IRS filings5

We made the Solo 401(k) way more accessible

Just because you work for yourself doesn’t mean you want to work forever. Guideline takes care of the hard parts of a Solo 401(k) with automated compliance, digital contributions, IRS form prep, and much more—all at no extra cost. Because we want you to retire, too.

Open a Solo 401(k)

Solo 401(k): The Guideline difference
  • Example visual of what happens when a payroll is connected with Guideline.

    Seamless admin

    Unlike other providers, we handle compliance, recordkeeping, investments, required IRS form prep, and more. You sit back and relax.
  • Image of two coins

    No junk fees

    We automated the middle man to maximize your savings. Our managed portfolios have up to 6x lower fees than the industry average.6
  • Image of message bubbles. One bubble has a heart.

    Award-winning support

    With a 93% customer satisfaction rating, you get the care you need.7,8 Live English or Spanish support by email and phone.
Joshua B.BERK Labs
Guideline’s value is visible in everything I don’t have to do. No endless email threads. No untangling issues. No 401(k) stress.Client of Guideline. Views may not be representative of other clients.
60K+
businesses9
1M+
savers10
$15B+
Invested for retirement11
fast company logo
Innovation by Design Award 202412

Frequently asked questions

Who is eligible for a Solo 401(k)?

Any business, partnership, or sole proprietorship is eligible to open a Solo 401(k) plan, provided only owners, partners, or spouses will be eligible to participate in the plan.

While an entity sponsoring a Solo 401(k) can have common-law employees, they must not be eligible for the plan based on the eligibility requirements in the plan document. Allowable eligibility requirements will be discussed here.

It is also important to note that if you are part of a controlled or affiliated service group, you are not able to open a Solo 401(k) plan at Guideline. Legally related groups must be in Starter or Enterprise plans.

Open a Solo 401(k)

Who is eligible for a SEP IRA?

The IRS has deemed the following employees eligible for participation in a Simplified Employee Pension (SEP) IRA plan (can be set lower):

  • At least 21 years of age
  • Has worked for the employer in at least 3 of the last 5 years
  • Received a minimum of $600 in compensation from the employer during the year

    Learn more

Can I contribute to a Solo 401(k) and a SEP IRA at the same time?

It depends. In theory contribute to both a Solo 401(k) and a SEP IRA in the same year, and even max out both contribution limits.

If the plans are from two unrelated companies there are no issues with participating in both. For example, you participate in a SEP plan through your employer and then open and contribute to a Solo 401(k) for your own business.

If you only have one business, and you contributed to SEP IRA that was created using a Form 5305-SEP (as is the case with a Guideline SEP IRA), then you will not be able to maintain any other qualified plan, like a Solo 401(k) in that year.

Can I convert a SEP IRA to a Solo 401(k)?

While you cannot convert a SEP IRA to a 401(k), you can consolidate by rolling over your SEP IRA balance into a Solo 401(k). Once you establish a new Solo 401(k) account with your provider of choice you can request a rollover from the organization holding your SEP IRA. Once you initiate and complete the rollover, your SEP IRA funds will be in your solo 401(k) moving forward.

Can I rollover funds from my IRA or former employer’s 401(k) into a Solo 401(k)?

Yes, you can roll over almost all retirement account types into a Solo 401(k), with some exceptions. You can’t initiate a rollover of an active 401(k) unless you are eligible for an in-service distribution. You also cannot roll a Roth IRA over into a Solo 401(k), according to IRS guidelines.

What’s the difference between employee and employer contributions for a Solo 401(k) and SEP IRA if you’re self-employed?

You can contribute as both an employer and an employee for a Solo 401(k), up to $23,500 as employee and up to $46,500 as employer, for a total of $70,000. If you’re over 50, then you can make additional catch-up contributions up to $7,500 or $11,250 (depending on your age) per year.4

For SEP IRA, you can only contribute as an employer (20% of annual income for business or 25% of annual income for self-employment work, up to $70,000. There are no catch-up contributions with a SEP IRA.4

  • Open a Solo 401(k)

    Perfect for savers who want access to more features and tax credits. You could get set up with a Solo 401(k) in as little as 9 minutes.
    Get started

  • Questions about SEP IRAs?

    A great option for savers who only need basic features and don’t anticipate expanding their business. Visit our dedicated page that tells you everything you need to know.
    Learn more
  • 1
    See here for more information regarding Guideline’s fees or view our Form ADV 2A Brochure.
  • 2
    Investment advisory services for Guideline’s 401(k) product (when 3(38) fiduciary services are appointed) and SEP IRA/IRA products are offered by Guideline Investments, LLC, an SEC-registered investment adviser. An assumed annual account fee of 0.15% is applied to assets under management and is deducted on a monthly basis. It’s calculated at 1/12 of the annual stated rate (0.15%) based on the account balance on the last day of each month. Alternative account fee pricing is available, ranging from 0.15% to 0.35%. Contact Sales at hello@guideline.com to learn more about exclusive pricing options available in Enterprise tier. See the Form ADV 2A Brochure for more information regarding this fee.
  • 3
    The information herein is for informational purposes only and is not intended to be an offer, recommendation, investment advice, legal or tax advice, or a solicitation to buy or sell any security. Neither Guideline, Inc. nor its subsidiaries, are responsible for information provided by third parties. Any information included herein from third parties is believed to be reliable however neither Guideline, Inc., nor its subsidiaries, guarantee the accuracy or completeness of that information.
  • 4
    Varies by age and may be adjusted annually to account for IRS cost-of-living adjustments. Learn more
  • 5
    If Guideline is not the plan administrator (applicable to self-service plans), you will need to review and sign the Form 5500 before it can be submitted.
  • 6
    This information is provided for illustrative purposes only, and is not intended to be taken as investment or tax advice. Consult a qualified tax and financial advisor to determine the appropriate investment strategy for you. The average investment expense of plan assets for 401(k) plans with 25 participants and $250,000 in assets is 1.26% of assets, according to the 25th Edition of the 401k Averages Book, with data updated through September 30, 2024, and is inclusive of investment management fees, fund expense ratios, 12b-1 fees, sub-transfer agent fees, contract charges, wrap and advisor fees or any other asset based charges. Investment advisory services for Guideline’s 401(k) product (when 3(38) fiduciary services are appointed) and SEP IRA/IRA products are offered by Guideline Investments, LLC, an SEC-registered investment adviser. The managed portfolios have blended expense ratios ranging from 0.058% to 0.061% of assets under management. When combined with an assumed account fee of 0.15% charged by Guideline Investments, LLC, the estimated total AUM fees for one of the managed portfolios can be under 0.21%. Alternative account fee pricing is available ranging from 0.15% to 0.35%. Contact Sales at hello@guideline.com to learn more about exclusive pricing options available in the Enterprise tier. See the Form ADV 2A Brochure for more information regarding fees. Expense ratios for custom portfolios will vary. These expense ratios are subject to change by and paid to the fund(s). View full fund lineup.
  • 7
    Guideline’s average customer satisfaction score (CSAT) based on feedback received from 1/1/2024 to 12/31/2024
  • 8
    2025 The American Business Awards® Bronze Stevie Winner in the Customer Service Team of the Year - Financial Services & Insurance category. Guideline submitted an application fee to qualify. Please see the award criteria here.
  • 9
    As of April 2025
  • 10
    As of April 2025
  • 11
    Total number of Savers, both active and non-active, that have participated in Guideline products from 2016-2024.
  • 12

    2024 Fast Company Innovation by Design Award Winner for Guideline's mobile application in the Mid-Size business category.

  • †
    This content is for informational purposes only and is not intended to be taken as tax advice. Please consult a tax professional to determine what types of tax credits or deductions your company is eligible to claim.
  • Any graphs or charts depicted are illustrative, for educational purposes only, and not intended to be investment advice. Investing involves risk and investments may lose value.

Guideline.com is owned and operated by Guideline, Inc. This website contains content from Guideline, Inc. and its affiliates, each a separate entity with different regulatory marketing requirements and standards. References to "our" or "we" on this website refer solely to Guideline RK, LLC unless otherwise specifically stated.

The information in this website is for informational purposes only and is not intended to be an offer, recommendation, investment advice, legal or tax advice, or a solicitation to buy or sell any security. By using this website, you agree to Guideline, Inc.’s Privacy Policy and Terms and Conditions of Use. Neither Guideline, Inc. nor its subsidiaries, are responsible for information provided by third parties. Information included herein from third parties is believed to be reliable however Guideline, Inc. does not guarantee the accuracy and completeness of that information.

Guideline, Inc. is a technology company that provides an integrated platform to companies who seek to work with 1) Guideline RK, LLC ("Guideline") and/or 2) Guideline Investments, LLC, an SEC Registered Investment Adviser ("RIA"), both of which are wholly owned by Guideline Holdings, LLC. Guideline Holdings, LLC is wholly owned by Guideline, Inc. Neither Guideline, Inc. nor Guideline Holdings, LLC or Guideline RK, LLC is involved in securities activities and is not registered with the SEC or FINRA. Neither Guideline, Inc., nor any of its affiliates, is a bank.

Investment advisory services for Guideline’s 401(k) (when 3(38) fiduciary services are selected) and SEP IRA/IRA products are offered by Guideline Investments, LLC, an SEC-registered investment adviser. For more information regarding fees and services, see Guideline Investments, LLC’s ADV 2A Brochure and Form CRS. References throughout this website to investment advisory services including but not limited to: investments offered, portfolios, managed portfolios, investment philosophy, assets under management (AUM), annual account fees expressed as a percentage of AUM, suitability questionnaire, 3(38) investment advisory management fiduciary services, robo-advisory services, and investment advice, unless otherwise specifically stated, are services provided by Guideline Investments, LLC. Investing involves risk and may lose money, including loss of principal. Investing is not guaranteed and past performance is not a guarantee of future performance. The investment options offered by Guideline Investments, LLC are not FDIC insured.

Recordkeeping services for Guideline’s 401(k) and SEP IRA/IRA products are offered by Guideline RK, LLC. 3(16) plan administration services are also offered by Guideline RK, LLC and only made available to clients who utilize an eligible payroll provider. For more information on Guideline’s pricing, see here. Guideline uses a third-party to provide custodial services. Custodial fees are paid by Guideline.

Any graphs, charts, and other visual aids (collectively referred to as "image(s)") are provided for information purposes only. None of these images can of themselves be used to make investment decisions. No representation is made that these will assist any person in making investment decisions and no image can capture all factors and variables required in making such decisions.

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