Solo 401(k)
A 401(k) for a business with no employees other than the owner (and optionally a spouse). Its advantage is that the owner contributes in two roles at once: as the 'employee' (a salary deferral up to the standard 401(k) limit, $24,500 in 2026) AND as the 'employer' (profit-sharing up to 25% of compensation), with the combined total capped near $72,000 in 2026. This dual-role stacking lets a solo earner reach the maximum at a much lower income than a SEP IRA, and many providers also allow a Roth sub-account.
Lessons that use this term
Related terms
Adjusted Cost Basis · Annuity · Capital Gains Distribution · Capitalized Interest · Cost Basis · Dividend Discount Model (DDM)
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