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3 min read

6 Features to Look for In a Solo 401(k) Provider

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Entrepreneurs and solo practitioners can still use 401(k) plans to save for retirement, even though they are self-employed. How? Because of the Solo 401(k). 

The Solo 401(k), also known as an individual 401(k), is designed as a retirement savings plan for the self-employed. It comes with the same tax advantages and benefits of traditional 401(k) plans and allows some unique distinctions.

A Solo 401(k) is a good choice for someone running their own company or working as a freelancer.

Choosing the right Solo 401(k) provider is an important choice. You want a partner that has the flexibility, pricing, and service you deserve. Here is a closer look at 6 features to consider in a Solo 401(k) provider.

1. The Power of Self-Direction

If you're someone who wants control of their financial and investment decisions, then deciding on a self-directed 401(k) is the right choice. With a self-directed Solo 401(k), you can opt for non-traditional investments. Think about things such as real estate, private equity, precious metals, or early-stage venture capital.

Look for a Solo 401(k) provider that offers these investment options, and not just the traditional assets offered by a 401(k) plan.

Rocket Dollar, for example, offers a range of self-directed alternative investments via partnerships. These partnerships are with some of the leading investment groups in real estate, venture capital, physical assets, and more.

Also look for a firm that allows for trading in assets such as: 

  • cryptocurrencies
  • small businesses and startups
  • conventional loans
  • equity crowdfunding
  • peer-to-peer lending

Having the broadest reach for investment options gives you choice and control over your retirement plan.

2. Minimal Costs and Fees

One of the worst things is to look at your investment accounts and be surprised by unexpected fees. Managing your Solo 401(k) account is critical. Ensure that your statements, transactions and withdrawals are managed accurately. You want to look for a partner who will not gouge you with fees you weren’t anticipating.

When looking for a Solo 401(k) provider, be sure to ask about the total fees involved to maintain your account.

3. Support to Help You Understand Your Options

When it comes to your investments, you want a partner that will help answer all of your financial questions. With a Solo 401(k), for example, there are many rules to consider and navigate, including:

  • Eligibility: While there are no restrictions on income or age, you must be a business owner with no employees, or the business owner’s spouse, to establish an account
  • Contribution Limits: Solo 401k owners are eligible to contribute up to $61,000 annually
  • Catch-Up Contributions: If you’re 50 or older, you can make an additional $6,500 in annual contributions, meaning you can contribute a total of $67,500 in 2022
  • Tax Implications: There are tax considerations at play regarding the investment vehicle you use. If you open a traditional 401(k), contributions are considered pre-tax, reducing your taxable income. However, distributions from the fund are taxable. A Roth IRA works essentially as the opposite, with contributions made after taxes but distributions made tax-free

Having an investment partner who can help you understand these options and make the smart investment decision for you is critical.

4. Simplified Set-Up

You do not want the hassle and aggravation, not to mention the long delays inherent in setting up some investment accounts. Instead, look for a Solo 401(k) provider that makes setting up an account simple.

More than that, look for a provider that has an easy transfer process and a user-friendly investment tracker. Your retirement is important, so you don’t want it to be difficult to see how all of your assets are performing.

With a Rocket Dollar account, you can be set up and invested in minutes. The first step is to provide some basic information and determine whether you want a traditional 401(k) or a Roth IRA account. 

The next step is to fund your account, typically either by rolling over an eligible 401(k) account from a previous employer, transferring an existing IRA or contributing directly. The next step is to invest.

5. Understanding Options as Employee and Employer

One of the unique benefits of a Solo 401(k) is the ability to wear both employee and employer hats. This advantage can help expand your investment options. That means both an employee contribution and an employer contribution.

In 2022, you can contribute up to $61,000 or 25 percent of adjusted gross income, depending on which is lower. These contributions are not in addition to the employee contribution, but the total amount available to be contributed.

6. Pricing Options

You want control of how you trade and what type of 401(k) account you use. Look for a company that has multiple account options.

At Rocket Dollar, you can choose a Silver account, which includes:

  • No minimum opening deposit is needed to start investing
  • A low one-time setup fee
  • $15 per month subscription
  • Online document storage
  • Email support

Another option is our Gold account, which features:

  • All the core features of the Silver account
  • Four free wire transfers annually
  • Assistance with Roth IRA conversion
  • Expedited service and transfers
  • Tax filing assistance for Form 1099-R and Form 5500, the latter of which is required when your 401(k) account reaches $250,000 in assets or you close the account

Choosing The Right Solo 401(k) Provider

Helping understand the nuanced opportunities and tax implications of a Solo 401(k) is essential to make sure your retirement account. Working with an experienced provider like Rocket Dollar. Learn more about a Rocket Dollar Solo 401(k) today.


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