Retirement plans Solo 401(k)

An easy plan option designed to help owner-only employers save for retirement.
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Why partner with us Solo 401(k): Benefits for small firms

The Invesco Solo 401(k)1 offers a high value, low cost retirement plan solution that allows solo business owners (and their spouses) to maximize their retirement contributions in a tax-advantaged way. This plan offers greater savings potential than other small business retirement plan solutions. Partner with Invesco for resources and support to help you get more out of your retirement.

Partnership

As a leading independent global investment management firm, investors may benefit from our commitment to investment excellence, depth of investment capabilities, and organizational strength.

Management

We make it easy to manage your retirement plan with affordable solutions, dedicated service, and resources that support you and your financial professional.

Allocation

Explore our mutual fund offerings, which span every major asset class, including US and international equity and fixed income portfolios and target-risk funds.

What we offer Solo 401(k) plan features

The Solo 401(k) plan allows the greatest savings potential at every income level, with very manageable administrative requirements.

Save using salary deferrals and employer contributions for a maximum of the lesser of 100% of your eligible compensation or $72,000 for 2026 if under age 50. Additional contribution permitted at age 50. These limits may change annually.

Profit sharing are employer contributions are tax deductible to as high as 25% of compensation2 for each participant. Compensation is limited to $360,000 when calculating profit-sharing contributions.

Salary deferrals are employee contributions that can be made on a pre-tax basis, as Roth3 (after-tax) contributions, or a combination of both. In some cases, Roth contributions may be required based on your income. The maximum amount you can contribute each year is based on your age and is limited to the lesser of 100% of your eligible compensation or the annual IRS limit. 

  • Under age 50: Contribute up to the standard annual.
  • Age 504 and older: Make an additional “catch-up” contributions above the standard limit. 
  • Ages 60–633,5: If permitted, higher catch-up contribution during these years.
  • Age 64 and older: Standard catch-up contributions resumes.

* Effective 1/1/2026, individuals who earned FICA wages of $150,000 or greater as of 12/31/2025 must make catch-up contributions as Roth.

For the most current contribution limits and details, please visit: Retirement contribution limits and deadlines | Invesco US.

Create drawdown strategies with tax-free assets. Like a Roth IRA, contributed amounts are already taxed, but, unlike the Roth IRA, you have greater savings potential and no eligibility requirements. Tax-free earnings are accessible five years from the first contribution and when a triggering event occurs, such as age 59½, disability, or death.

We understand that life’s unexpected events can arise, and to support you through those times, the Invesco Solo 401(k) plan offers access to your retirement savings while you are saving for retirement. Before taking a distribution from your account, consult with your financial professional to carefully evaluate the impact on how the options below affect your financial decision.

  • Loans: You may borrow up to 50% of your retirement account balance or $50,000, whichever is less. The minimum loan amount is $1,000. 
  • Rollover dollars: You may access deposits from other retirement plans at any time unless a loan is outstanding
  • Attainment of normal retirement: At Age 55.
  • Financial Hardship Distributions: Employee salary deferrals and employer contributions may be accessed prior to age 59½ due to financial hardship. You will be subject to ordinary income taxes and a 10% premature distribution penalty.

The early distribution penalty of 10% is waived:

  • At Age 59 ½.
  • For Qualified natural disaster.
  • For Qualified Birth and Adoption. 

The Solo 401(k) plan allows the greatest savings potential at every income level, with very manageable administrative requirements.

Compensation SIMPLE IRA7,8 SEP IRA8 Solo 401(k)8
$45,000 $18,350 $11,250 $35,750
$85,000 $19,550 $21,250 $45,750
$100,000 $20,000 $25,000 $49,500
$185,000 $22,550 $46,250 $70,750

Chart assumptions for 2026: In a SIMPLE IRA, the maximum annual contribution a business owner can make is a $17,000 deferral plus a 3% matching contribution based on annual compensation. In a SEP IRA, the maximum annual contribution a business owner can make is 25% of annual compensation, up to $72,000. With a Solo 401(k), the maximum annual tax-deductible contribution a business owner can make is 25% of income (20% for self-employment income) plus an additional $24,500 in salary deferrals. Overall limits cannot exceed the lesser of 100% of income up to $72,000. Employee catch-up contributions are permitted at age 50 for SIMPLE IRA and Solo 401(k) participants.

The Invesco Solo 401(k) plan is designed for a business that:

  • Is an owner-only corporation, partnership, or sole proprietorship.
  • Employs only the owner or the owner and a spouse.
  • Employers with non-spouse long-term part-time6 or non-spouse full-time rank-and-file employees such as assistants, clerical workers and lower paid individuals may want to consider an alternate plan type after evaluation by the employer’s tax advisor and/or retirement plan counsel.

Ideal employers:

  • Home businesses
  • Doctors/attorneys
  • Brokers
  • Real estate agents
  • Shop owners
  • Consultants
  • Freelancers/gig workers
  • Board members
  • Insurance agents
  • Social media influencers

First year rules for start-up sole proprietors

  • Sole proprietors who establish a Solo 401(k) after the tax year (12/31) but before the employer’s tax filing deadline (no extensions) are permitted to do the following :
  • Retroactive employee salary deferrals can be made for the prior tax year up to the employee’s tax filing deadline. E.g.: 2024 employee deferrals can be made up to April 15, 2025.
  • Employer profit-sharing contributions can be made up to the employer’s tax filing deadline. E.g.: employer tax year June 30. 2024, employer profit sharing contributions can be made up until June 30, 2025.

All other business entities

  • Employers who establish a Solo 401(k) by December 31 for applicable tax year are permitted to do the following:
  • Salary deferrals permitted
  • Profit sharing contribution permitted up to tax filing deadline plus extension.

Get started

  • An annual retirement account maintenance fee of $30 is paid by the participant for balances under $50,000. The fee is waived for balances of $50,000 and over.9
  • Loans3 have a one-time initiation fee of $75 but no ongoing maintenance fee.

Account access and support

Key information about Solo 401(k)s

The Solo 401(k), (also known as Solo-k, Uni-k, Single K and One-participant k), plan is a defined contribution plan designed for the sole business owner with no employees other than a spouse. Legal entities, such as C corporations, S corporations, partnerships, and sole proprietorships, are permitted to establish a Solo 401(k) plan.

The 500-hour requirement is a per-year requirement for W-2 wage employees. For plan years beginning on or after January 1, 2026, the Long-Term Part-Time (LTPT) 500-hour eligibility requirement is satisfied with two prior consecutive years of service with at least 500 hours (but no more than 1,000 hours) each year. As a result, employees who are at least age 21 who meet this 500-hour requirement for each of two prior consecutive years must be permitted to make salary deferrals into the plan.

For Example: If a W-2 employee who is at least age 21 as of January 1, 2026, worked between 500 and 1000 hours in 2024, and also worked between 500 and 1,000 hours in 2025, this employee is eligible to participate in the plan and make salary deferral contributions starting January 1, 2026.

According to the IRS, an employer’s good faith compliance with this new requirement will suffice until such time that the IRS issues further rules.

If any non-spouse W-2 employee is LTPT based on the criteria described above, even if they elect NOT to contribute salary deferrals to the plan, this ostensibly subjects the plan to coverage under ERISA, solely by virtue of the employee’s new eligibility to participate. ERISA is a federal law that requires employer plan sponsors to comply with certain fiduciary obligations, and imposes requirements for bonding, fee disclosures, and Form 5500 filings, among other things. A plan’s compliance with ERISA is ultimately the responsibility of the sponsoring employer.

Understanding and complying with ERISA requirements is the responsibility of the sponsoring employer, not Invesco (however, Invesco does provide certain limited support for ERISA disclosure obligations). Please also note, the Solo 401(k) is not designed to support ERISA plans; it is intended for owners and spouses only (and thus exempt from ERISA). 

Invesco’s intent is to amend the Invesco Solo 401(k) Plan to exclude LTPT employees from receiving employer contributions, and to provide for only an employee salary deferral option for LTPT employees. However, since final IRS regulations are still pending, final plan amendments for your plan will depend on further IRS guidance, as referenced above. While we work through this process, employer contributions are not required. 

Contract employees whose services are paid for and reported on a Form 1099 and do not receive W-2 wages are not considered LTPT employees.

Is the 500-hour requirement under SECURE 2.0 a requirement to be counted annually?

The 500-hour requirement is a per-year requirement for W-2 wage employees. For plan years beginning on or after January 1, 2025, the Long-Term Part-Time (LTPT) 500-hour eligibility requirement is satisfied with two prior consecutive years of service with at least 500 hours (but no more than 1,000 hours) each year. As a result, employees who are at least age 21 who meet this 500-hour requirement for each of two prior consecutive years must be permitted to make salary deferrals into the plan.

For Example: If a W-2 employee who is at least age 21 as of January 1, 2026, worked between 500 and 1000 hours in 2024, and also worked between 500 and 1,000 hours in 2025, this employee is eligible to participate in the plan and make salary deferral contributions starting January 1, 2026.

According to the IRS, an employer’s good faith compliance with this new requirement will suffice until such time that the IRS issues further rules.

While working with a third-party administrator (TPA) is not required, should you choose to utilize the support of a TPA, you may receive up to $500 per year in a tax credit for startup costs for a period of three years. Invesco is not a TPA, but it does provide basic recordkeeping services, applicable plan documents and materials, and certain regulatory notices applicable to your plan. 

Filing IRS Form 5500 is required when plan assets reach $250,000 across all qualified retirement plans. Invesco does not provide IRS Form 5500 support. Please contact your qualified tax professional for assistance.

The Invesco Solo 401(k) plan allows Roth contributions to be made. Unlike a Roth IRA, a Roth 401(k) has higher contribution limits and no income eligibility requirements.

Related insights

Other retirement plans

  • 1

    The Invesco Solo 401(k) is intended for a business owner and their spouse only. The inclusion of additional participants will ostensibly cause the plan to be subject to Employee Retirement Income Security Act (ERISA) of 1974 and Invesco Solo 401(k) is not designed to comply with all requirements of this federal law that requires employer plan sponsors to comply with certain fiduciary obligations, and imposes requirements for bonding, fee disclosures, and Form 5500 filings, among other things. A plan’s compliance with ERISA is ultimately the responsibility of the sponsoring employer.

  • 2

    When calculating the amount an employer can contribute as a self-employed person under a qualified plan, he or she must deduct from his or her earned income all contributions made for the year for all plans he or she may have. This has the effect of reducing the percentage limit for the employer’s own deductible contributions to the plan to 20% of net profits. This is calculated after the self-employment tax deduction is taken, but before the contribution is made on his or her behalf.
  • 3

    Optional plan feature to be selected by the employer.
  • 4

    Contributions can begin, January 1 of the year the participant turns age 50.
  • 5

    Contributions may begin January 1 of the year the participant turns 60 and must cease by December 31 of the year they turn 63.
  • 6

    A Long-Term Part-Time employee earns W-2 wages, is at least age 21 and has worked more than 500 hours but no more than 1000 hours per year for the 2 previous consecutive calendar years. This class of employees must be permitted to make salary deferrals.
  • 7

    SIMPLE IRA matching contributions are not subject to a compensation limit.
  • 8

    When calculating non-elective contributions for SIMPLE, SEP, and Solo 401(k) plans, compensation is limited to the first $360,000 for 2026 (indexed for inflation).
  • 9

    The annual fee is waived across all retirement account types if total assets held by the participant in any retirement or non-retirement accounts held directly at Invesco, excluding 529 plans, are $50,000 or greater on the date that fees are assessed. Fund expenses apply.