How Much Does a Solo 401k Plan Cost? Free vs Paid Plan Options

Looking to open a Solo 401k plan? Get started today with just a few clicks – The Carry Solo 401k Plan is a feature-packed self-directed account that lets you invest in both traditional and alternative assets, take out a loan, or do a Mega Backdoor Roth conversion with a few clicks.

A Solo 401k plan is a retirement plan designed for self-employed individuals — business owners, freelancers, and independent contractors who want to maximize their retirement savings. Unlike a traditional 401k that an employer sets up, you’re in charge of creating and managing your Solo 401k to take advantage of its tax benefits.

When choosing a Solo 401k plan provider, cost plays a big role. Some providers offer free Solo 401k plans (also called prototype plans) that cover only the basics. Others offer premium plans (or non-prototype plans) with extra features like Roth contributions, Mega Backdoor Roth access, loan options, and dedicated customer support.So, how much does it cost to open a Solo 401k plan?  And is a paid plan worth it over a free one? In this article, let’s break down the costs, compare features, and help you decide which option fits your needs.

How Much Does a Solo 401k Plan Cost?

Solo 401k plans range from free to a few hundred dollars per year, depending on the provider and features. Free Solo 401k plans cover only the essentials, while paid Solo 401k plans include premium features that could lead to bigger tax savings and more investment flexibility.

To start, let’s break down what each one offers so you can decide what’s right for you.

What’s Included in a Free Solo 401k Plan?

A free Solo 401k or prototype plan typically includes only the basics:

✅ Pre-tax contributions only.

✅ Invest in traditional assets only.

✅ Slower, manual steps required to open and maintain your plan.

✅ Minimum customer support.

If this is all that you’re looking for, then free Solo 401k plans could be a convenient option. You won’t pay anything to open or maintain it, and you won’t need  access to advanced tax strategies or flexible investment options.

What You Get With a Paid Solo 401k Plan

A paid Solo 401k or non-prototype plan typically costs $300 to $600 per year and can offer  many things a free plan does not including:

📝 Important Note: Not all paid providers offer the same features. Most include Roth contributions, rollovers, and alternative investment options, but some don’t offer Mega Backdoor Roth conversions or high-level customer support. Always check what’s included before choosing a provider.

Is a Paid Solo 401k Plan Worth It?

To determine whether it makes sense to choose a paid plan over a free plan, let’s look at the different features a paid plan offers you.

1) Make Roth Contributions With a Paid Solo 401k

One of the biggest reasons to consider a paid Solo 401k plan is the ability to contribute to a Roth Solo 401k.

Solo 401k contributions are broken down into two different types: employer contributions and employee contributions. With a regular 401k plan, you only get to contribute as an employee. But with a Solo 401k, since you’re both the employee and the employer, you could contribute from both roles, leading to a much higher contribution possibilities.

The total Solo 401k contribution limit is $70,000 for 2025 and $77,500 if you’re 50 years of age or older. However each side (employee vs employer) has different rules and limits.

Employee contributions:

✅ Can be pre-tax or Roth, or both

✅ Has a limit of $23,500 ($31,000 if age 50+) in 2025

Employer contributions:

✅ Pre-tax only (Employers cannot contribute to a Roth account)

✅ Up to 25% of compensation (20% if the business is not incorporated)

Most free plans only offer pre-tax contributions and don’t allow Roth contributions. Paid plans let you choose both.

Pre-Tax vs. Roth – What’s the Difference?

✅ Pre-Tax Contributions → Get a tax break now, pay taxes later

✏️ Example: If you earn $60,000 and contribute $20,000 pre-tax, your taxable income drops to $40,000 today. But, you’ll pay taxes on withdrawals in retirement.

✅ Roth Contributions → Pay taxes now, withdraw tax-free later

✏️ Example: If you earn $60,000 and contribute $20,000 Roth, your taxable income stays at $60,000, but your withdrawals in retirement are 100% tax-free—no matter how much your investments grow.

📝 Important Tip: If you want to grow tax-free retirement savings, a paid Solo 401k with Roth contributions is a must.

Disclosure: The above examples are for illustrative purposes only and are not representative of any specific client situation or investment outcome. Contribution limits and tax rules can vary.

2) Invest in Alternative Assets

A free Solo 401k can limit your investment options to traditional assets like stocks, bonds, mutual funds, and ETFs. 

A paid Solo 401k can expand your investment choices to alternative assets like cryptocurrencies, real estate (rental properties), and private equity (startups and venture capital).

Investing in alternative assets like startups can come with higher risk, but it also can offer the potential for a substantial tax-free nest egg in retirement.

✏️ Example: Peter Thiel famously turned $2,800 into $5 billion by investing in PayPal, Facebook, and Palantir inside his Roth IRA. Since the investments were in a Roth retirement account, he will potentially owe zero taxes on the gains.

3) Use the Mega Backdoor Strategy

Want to contribute even more to your Roth Solo 401k? A Mega Backdoor Roth lets you convert nearly all of your Solo 401k contributions into Roth savings.

Normally, your Roth Solo 401k contributions for 2025 are capped at $23,500 ($31,000 if age 50+). But you can also do what’s called a Mega Backdoor Solo 401k conversion, in which you can contribute up to the full Solo 401(k) limit of $70,000 (or $77,500 if you’re 50+).

The Mega Backdoor conversion is unlikely to be available with any free plans, and many paid plans do not even offer it. If you’re interested in maximizing your Roth Solo 401k plan, make sure to choose a plan that offers this feature (like the Carry Solo 401k).

📌 Also read: The Mega Backdoor Roth Solo 401k Explained

4) Rollover Retirement Funds Easily

The IRS allows rollovers from almost any retirement account into a Solo 401k plan (except Roth IRAs). That means if you qualify for a Solo 401k, you could transfer the funds from other accounts with fewer features and more restrictions, gaining immediate access to all the Solo 401k features with the same funds.

✏️ Example:

Most free plans either don’t allow rollovers, or only allow rollovers from certain retirement accounts. With paid plans, rollovers from all eligible retirement plans are likely supported.

📌 Also read: How Solo 401k Rollovers Work

5) Get a Better Online Experience

Free Solo 401k plans often require a tedious, paper-based process — printing, signing, and mailing dozens or even hundreds of paper documents just to set up your account. Even making contributions can be inconvenient, as some free plans don’t accept bank deposits and require you to mail in a check.

Most paid plans, on the other hand, offer a fully digital experience with no paperwork or mailing required. 

For example, with the Carry Solo 401k Plan, you can set up your account entirely online in under 10 minutes. Contributions can be made through direct deposit, and rollovers from other retirement accounts take just a few clicks. You could even do the Mega Backdoor Solo 401k conversion directly from your user dashboard.

6) Access Higher Levels of Customer Support

Setting up and maintaining a Solo 401(k) can be more complex than other retirement accounts. It often involves additional paperwork, and you’re responsible for calculating contributions, ensuring compliance, and correcting any mistakes to avoid penalties.

One of the biggest differences between free and paid plans is the level of customer support. 

Free plans typically has:

❌ Minimal to no customer support
❌ No help with compliance

Paid plans provide:

✅ Educational guidance on plan setup and contributions
✅ Automation of compliance and tax forms (like IRS Form 5500-EZ)
✅ Faster response times for account-related questions

For example, with the Carry Solo 401k, all of your account documents can be found within your user dashboard. You can move money between accounts, making contributions, performing Mega Backdoor conversions, and even filing your 5500-EZ tax forms at the end of each tax year.

7) Borrow Money With a Solo 401k Loan

Some paid plan providers offer the option to take out a Solo 401k loan. You could borrow up to 50% of your account value with a maximum of $50,000. The interest rate is usually the prime rate plus 1-2%, and you may have up to 5 years to repay the loan. If the funds are used to purchase a primary residence, some providers may extend the repayment period to 15 years.

Why can a Solo 401k loan be useful?

✅ No credit check required since you’re borrowing from yourself

✅ Late payments don’t impact your credit score

✅ Interest payments go back into your own retirement account

📝 Important Tip: Not every paid plan provider offers the features above. Loan terms may vary by provider, be sure to choose one that best matches your needs.

📌 Also read: Comparing the Best Solo 401k Plan Providers for 2025

What Free Solo 401k Plans Still Offer (Despite Their Limits)

Now that we’ve covered the extra features of a paid Solo 401k plan, let’s talk about what free Solo 401k plans may include. While they may have some limitations, they still offer several key benefits that make them a great option for certain business owners. 

✅ High Contribution Limits

Even with a free Solo 401k, you could still contribute up to:

This is one of the highest retirement contribution limits available, making the Solo 401k an excellent choice for business owners looking to maximize their savings.

✅ Tax Deductions on Contributions

Contributing to a pre-tax Solo 401k allows you to reduce your taxable income and save on taxes.

✏️ Example:

Even free Solo 401k plans allow you to claim this deduction.

✅ Tax-Free Investment Growth (Compounding)

All investments inside your Solo 401k grow tax-free, meaning, you don’t pay capital gains tax when reinvesting your profits. This allows your money to compound faster, helping you build wealth over time.

✏️ Example:

✅ Access to Traditional Investment Options

While free Solo 401k plans don’t offer alternative assets (like real estate or crypto), you could still invest in traditional assets like:

For many investors, these options are more than enough to build a diversified retirement portfolio.

✅ Available for All Business Entities

You don’t need to be a sole proprietor or a corporation to open a Solo 401k. All business structures are eligible, including:

Even if you have a W-2 job, you can still open a Solo 401k as long as you have separate self-employment income.

✅ No Minimum Income Requirement

There’s no minimum income requirement to open a Solo 401k. Whether you make $500 per month from a side hustle or run a seven-figure business, you could still qualify.

This makes the Solo 401k accessible to freelancers, independent contractors, and small business owners at all income levels.

📌 For a list of all Solo 401k plan benefits (free and paid), check out: Solo 401k Benefits & Tax Advantages: Is A Solo 401k Worth It?

Solo 401k Free vs. Paid Plans – Summary

To summarize the key differences between free and paid Solo 401k plans, here’s  a quick look at how the Carry Solo 401k compares to three major free plan providers.

Features	Carry	Fidelity	Charles Schwab
Self-directed option*	✅	❌	❌
Checkbook control option *	✅	❌	❌
Making contributions	Online	Online	Mail physical check
Recurring contributions	✅	✅ (Manually)	✅
No-fee robo-advisor	✅	❌	✅
Roth option	✅	❌ (Planned by 2026)	✅
Mega Backdoor Roth	✅	❌	❌
Solo 401k Loan	✅	❌	❌
Invest in traditional assets*	✅	✅	✅
Invest in alternative assets*	✅	❌	❌
Crypto investments*	✅	❌	❌
NFT investments*	✅	❌	❌
Real estate investments*	✅	❌	❌
Private equity investments*	✅	❌	❌
Angel investments*	✅	❌	❌
Zero AUM fees	✅	✅	✅
Price	$299/year, zero AUM fees*$29/month	Free to set up	Free to set up

Paid Solo 401k Plan Provider Costs Compared

Plan Provider	Price
Carry	$299/year $29/month
My Solo 401k	$525 first fee + $125 annual fee
Nabers	$499 set up fee + $29/month
Rocket Dollar	Silver Plan: $360 set up fee + $15/month Gold Plan: $600 set up fee + $30/month

Does a Paid Solo 401k Plan Make Sense for Me?

Deciding between a free or paid Solo 401k plan comes down to one question: Do the extra features justify the cost?

When a Free Solo 401k Plan Might Be Enough

If you don’t need premium features like Roth contributions, alternative investments, or Mega Backdoor Roth conversions, a free Solo 401k plan could be a great choice.

The free Solo 401k plan is best for:

✅ Business owners who only want pre-tax contributions
✅ Investors who only plan to invest in stocks, bonds, mutual funds, or ETFs
✅ Those who don’t mind a slower, more manual setup process

While free plans require more paperwork upfront, once set up, they are fairly easy to maintain as long as you stay compliant with IRS rules.

When a Paid Solo 401k Plan Might Be Worth It

If you’re looking for more flexibility, tax-saving strategies, and investment options, a paid Solo 401k plan could be a smart move.

A paid plan might make sense if you:

✅ Want to contribute to a Roth Solo 401k for tax-free withdrawals in retirement
✅ Plan to invest in alternative assets like crypto, real estate, or private equity
✅ Are interested in Mega Backdoor Roth conversions to maximize your tax-free savings
✅ Want an easier online setup process with better customer support
✅ Have money in other retirement accounts (like an old 401k) that you’d like to roll over for more control and investment options

By taking advantage of these premium features, you could save significantly more on taxes and grow your retirement wealth faster.