Can Musicians Open a Solo 401k?

Playing music for a living takes talent, hustle, and often an unpredictable schedule. Whether you’re performing live, producing tracks, teaching lessons, or juggling all three, there’s a good chance your income doesn’t come with built-in benefits like an employer-sponsored retirement plan.

That’s where a Solo 401k may come in.

If you’re self-employed and don’t have full-time employees, this type of plan could give you a way to build long-term savings while keeping control over contributions and investments. For many musicians, it’s a practical option—especially if you’re earning steady income and thinking beyond your next tour or release.

Here’s what to know before opening one.

📌 Also Read: How to Set Up A Solo 401k Plan

How to Qualify for a Solo 401k

A Solo 401k, also known as a one-participant 401k, is designed for self-employed individuals who don’t have full-time employees (aside from a spouse who’s involved in the business). If you work independently as a musician, chances are you qualify.

Here’s what that looks like in practice:

✅ Self-Employment Income

You must earn income through your music. This could include live performances, private lessons, music production, or licensing your work. If you’re a sole proprietor, you’d typically report this on Schedule C. If your business is structured as an S corporation, you’d report W-2 wages you pay yourself.

✅ No Full-Time Employees

Your business cannot have any employees working more than 1,000 hours per year, except for your spouse.

✅ Eligible Business Structures

Solo 401ks are available to sole proprietors, partnerships, LLCs, and corporations—as long as you meet the other requirements.

📝 Note: If you ever bring on a full-time bandmate, assistant, or studio hire, you’d need to switch to a traditional 401k that covers eligible employees.

📌 Also Read: Important Forms for Solo 401k Owners

What Musicians Need Before Opening a Solo 401k

Before signing up, make sure these basics are in place:

✅ Income That Qualifies

Your contribution limits are tied to your income, and how it’s reported depends on how your business is structured. This could mean net income (for sole proprietors), net adjusted income (for S corps), or gross income after accounting for self-employment tax deductions.

✅ Spousal Involvement

If your spouse works with you and earns income from the business, they can open their own participant account under the same plan and make their own contributions.

✅ Right Business Structure

Whether you’re performing under your own name or through an LLC, what matters most is that your business doesn’t have full-time staff aside from your spouse.

Why Some Musicians Consider a Solo 401k

Solo 401ks are popular among self-employed individuals because they offer more flexibility and higher contribution potential compared to many other retirement plans.

Higher Contribution Limits

As both the employee and the employer, you’re allowed to contribute in both roles. For 2025, here’s how that breaks down:

✅ Employee contributions: Up to $23,500

✅ Catch-up (age 50+): An additional $7,500

✅ Increased Catch-up (age 60, 61, 62, or 63): An additional $11,250

✅ Employer contributions: Up to 25 percent of eligible compensation

✅ Total combined contribution: Up to $70,000 — or

📝 Note: Your actual contribution room depends on how much income you earn and how your business is structured.

Traditional and Roth Options

You can decide how your employee contributions are taxed:

Investment Flexibility

Depending on your provider, you could invest in almost any asset type—stocks, bonds, mutual funds, or private funds. Just keep in mind that not all assets are allowed under IRS rules, and investing always involves risks. 

Spousal Contributions

If your spouse is part of your music business and earns income, they can also contribute to the plan separately. Their contribution limits are calculated based on their own eligible income.

📝 Note: Contribution limits apply per participant. If both you and your spouse participate in the plan, each of you have your own limits. Your income must be high enough to support maximum contributions. If the total plan balance reaches $250,000 or more in total assets, you’ll need to file IRS Form 5500-EZ annually with the IRS.

Things to Know Before You Enroll

What It Can Offer

What You’ll Need to Manage

📝 Note: There’s no guarantee of investment growth. These plans can be effective when managed correctly, but mistakes may have tax or legal consequences. It’s generally recommended to work with a professional financial or tax advisor.

📌 Also Read: Solo 401k Vs SEP IRA

Final Thoughts: Should Musicians Consider a Solo 401k?

For many self-employed musicians, a Solo 401k may offer a way to set aside meaningful dollars for retirement, especially if you’re earning steady income and want to contribute more than other plans allow.

That said, not every musician will benefit equally. Factors like income level, business structure, and whether you work alone or with others all affect whether this plan makes sense for you. Reviewing your financial situation with a tax or retirement expert could help you decide if it’s the right fit.

📌 Want to learn more? Check this out:

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