Can Writers Open a Solo 401k?

Freelance writing can feel like a whirlwind of deadlines, revisions, and pitching new ideas. Unlike traditional desk jobs, most writers rely on self-employment income without the benefit of an employer-sponsored retirement plan.

If you’re running your writing business solo, a Solo 401k could be your ticket to building a strong retirement nest egg while keeping full control over your contributions and investment choices.

Here’s what every wordsmith should know before getting started.

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

How to Qualify for a Solo 401k

A Solo 401k, also called a one-participant 401k, is tailored for self-employed individuals with no full-time employees (other than a spouse).

✅ Self-Employment Income

Your writing income must be reported as self-employment earnings on your tax return. This includes income from articles, royalties from book sales, client retainers for copywriting, or blogging revenue. Sole proprietors use Schedule C. For S corporations, you must report W-2 wages paid to yourself.

✅ No Full-Time Employees

Your writing business must not employ anyone clocking over 1,000 hours per year, with the exception of your spouse—who may assist with editing, research, or administrative tasks.

✅ Eligible Business Structures

Sole proprietorships, partnerships, LLCs, and corporations can all sponsor a Solo 401k, provided there are no qualifying full-time employees beyond your spouse.

📝 Note: If you hire a full-time editor or assistant in the future, you’ll need to switch to a traditional 401k that covers all eligible employees.

📌 Also Read: Important Forms for Solo 401k Owners

What Writers Need Before Enrollment

Before signing the plan documents, make sure the following essentials are in place:

Why Solo 401ks Appeal to Writers

Self-employed writers often choose Solo 401ks for their generous contribution windows and tax flexibility:

Higher Contribution Limits

In 2025, you can maximize your retirement savings by contributing both as an “employee” and “employer”:

✅ Employee elective deferrals: Up to $23,500

✅ Age‑50+ catch‑up: Additional $7,500

✅ Expanded catch‑up (ages 60–63): An additional $11,250

✅ Employer profit‑sharing: Up to 25 percent of eligible compensation

✅ Total potential: $70,000 (or $77,500 if 50+, $81,250 if 60–63)

📝 Note: Your actual limit depends on your business structure and reported income.

Traditional vs. Roth Choices

Investment Freedom

You can often invest in a range of assets such as stocks, bonds, mutual funds, or select private funds. However, you’ll need to follow IRS rules on prohibited transactions.

Things to Consider Before You Enroll

Solo 401k Benefits:

Responsibilities:

📝 Tip: Working with a financial or tax advisor can help you navigate these details and stay compliant.

📌 Also Read: Solo 401k Vs SEP IRA

Final Thoughts: Is a Solo 401k Right for Writers?

For many freelance writers and independent authors, a Solo 401k offers a powerful way to turbocharge retirement savings, especially if you’re generating steady income and want to go beyond IRA contribution limits. But the decision depends on your income level, tax situation, and long-term goals.

Review your numbers, consult with a professional, and consider how a Solo 401k might fit into your broader financial story.

📌 Looking to dive deeper? Explore these resources:

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