Self-Employed · Retirement
Solo 401(k) for Consultants — 2026 Calculator
Management, IT, and business consultants who work independently are among the biggest beneficiaries of Solo 401(k) plans. High project-based income and flexible contribution timing make it an ideal vehicle.
2026 max contribution
$70,000
Typical income range
$80,000–$400,000
Catch-up (age 50+)
+$7,500
Deadline to open
Dec 31, 2026
Your 2026 retirement plan
Fill in your situation and click Calculate →
Solo 401(k) for Consultants: What You Need to Know
Business structure
Consultants earning $100,000+ in net income frequently elect S-Corp status to separate reasonable salary (subject to SE tax) from distributions. The Solo 401(k) contribution is based on the W-2 salary the S-Corp pays you.
Income pattern & timing
Consulting income often arrives in large retainer payments or end-of-project milestones. Timing contributions to match payment receipt maximizes cash flow efficiency.
Key strategy
High-earning consultants ($200k+) should model the S-Corp + Solo 401(k) combination carefully. The S-Corp salary becomes your 401(k) compensation base — setting it too low reduces your employer contribution ceiling.
Solo 401(k) vs. SEP-IRA for consultants
A Solo 401(k) allows both an employee deferral (up to $23,500 in 2026) and an employer contribution (up to 25% of net compensation), for a combined maximum of $70,000. A SEP-IRA only allows employer contributions — no employee deferral. This means self-employed consultants earning under approximately $120,000 in net income can typically contribute more to a Solo 401(k) than a SEP-IRA.
How to open a Solo 401(k) as a consultant
- Get an EIN (free at IRS.gov, takes 5 minutes online). You need this even as a sole proprietor.
- Choose a provider. Fidelity, Schwab, and Vanguard offer free Solo 401(k) plans. Fidelity supports both traditional and Roth contributions with no fees.
- Open the account before December 31 of the tax year you want contributions to count.
- Fund the account by your tax filing deadline — April 15, or October 15 if you file an extension.
Frequently Asked Questions
Can consultants open a Solo 401(k)?
Yes. Self-employed consultants with Schedule C or 1099 income qualify for a Solo 401(k) as long as they have no full-time W-2 employees other than a spouse. The 2026 contribution limit is $70,000 ($77,500 with catch-up for those 50+).
I'm a consultant earning $300,000 — what's my actual contribution limit?
As a sole proprietor at $300,000 net income: employee deferral $23,500 + employer contribution 20% × net compensation ≈ $46,500 = total $70,000 (the absolute cap). As an S-Corp paying yourself a $150,000 salary: employee deferral $23,500 + employer contribution 25% × $150,000 = $37,500 + $23,500 = $61,000. The calculator above will compute your exact limit.
Can I open a Solo 401(k) as an LLC taxed as an S-Corp?
Yes. An LLC with S-Corp tax election qualifies. Your Solo 401(k) contribution is based on W-2 wages the S-Corp pays you — not total business revenue. Make sure you're paying yourself a 'reasonable salary' as required by the IRS.
Does a Solo 401(k) affect my QBI (qualified business income) deduction?
Yes — in a complex way. Solo 401(k) contributions reduce your taxable income but also reduce your QBI deduction base. The net effect is almost always positive (more total tax savings), but the interplay is worth modeling. Our tax savings calculator accounts for this.
Other Solo 401(k) guides
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