Open a Self-Directed Solo 401(k) — Invest in Real Estate, Crypto, and More
If you’re self-employed, you have access to one of the most powerful retirement accounts in the U.S. tax code — and most people have never heard of it. The Solo 401(k) lets you contribute more, invest in more, and keep more than almost any other retirement vehicle available to individual business owners.
At uDirect IRA, we’ve been helping self-employed investors open and manage Solo 401(k) plans since 2009. We’re based in Irvine, California, and we answer the phone when you call.
What Is a Solo 401(k)?
A Solo 401(k) — also called a one-participant 401(k) or individual 401(k) — is a retirement plan designed specifically for self-employed individuals and small business owners with no full-time employees other than themselves and, in some cases, a spouse.
Unlike a traditional 401(k) managed by an employer, a Solo 401(k) gives you control over where your retirement money is invested. That includes alternative assets most custodians won’t touch — like real estate, private lending, cryptocurrency, precious metals, and private placements.
A self-directed Solo 401(k) goes one step further. It combines the high contribution limits of a standard Solo 401(k) with the investment flexibility of a self-directed IRA — making it one of the most flexible retirement tools available anywhere.
Who Qualifies for a Solo 401(k)?
You may be eligible if you are:
- Self-employed with no W-2 employees (other than a spouse who works in the business)
- A freelancer, consultant, solopreneur, or gig worker with self-employment income
- A small business owner operating as a sole proprietor, LLC, S-Corp, C-Corp, or partnership
- Someone with a side business — even if you have a full-time W-2 job
Important: If you hire full-time employees who are eligible for the plan, the Solo 401(k) converts to a standard 401(k) with ERISA compliance requirements. Talk to uDirect before that happens — we can help you plan accordingly.
Solo 401(k) Contribution Limits for 2026
This is where the Solo 401(k) really separates itself. You contribute in two roles — as both employee and employer — which allows for contribution levels that dwarf what a traditional IRA allows.
Employee Elective Deferral (Under Age 50)
- 2025: $23,500
- 2026: $24,500
Increase: +$1,000
- Standard Catch-Up (Age 50–59 and Age 64+)
- 2025: $7,500
- 2026: $8,000
Increase: +$500
- Additional Catch-Up (Age 60–63, “Super” Catch-Up)
- 2025: $11,250
- 2026: $11,250
Change: No increase
- Combined Contribution Limit (Employee + Employer)
- Under Age 50:
- 2025: $70,000
- 2026: $72,000
- Increase: +$2,000
- Age 50–59 or 64+:
- 2025: $77,500
- 2026: $80,000
- Increase: +$2,500
- Age 60–63:
- 2025: $81,250
- 2026: $83,250
- Increase: +$2,000
The total contribution amount includes both salary deferrals and profit-sharing contributions. The plan allows contributions to be adjusted at any time to align with your business’s performance, giving you significant flexibility.
Spouse Participation Doubles Your Savings
If your spouse works in the business and receives compensation, they can participate in the same Solo 401(k) plan — each with their own account. This means a couple could potentially shelter up to $160,000+ from taxes in a single year, depending on age and income.
or call (866) 447-6598 — we'll walk you through it.
What Can You Invest in with a Self-Directed Solo 401(k)?
This is where uDirect IRA’s self-directed approach changes everything. Most custodians limit Solo 401(k) investments to mutual funds, ETFs, and publicly traded stocks. uDirect opens up the full range of IRS-allowable alternative assets.
With a self-directed Solo 401(k) at uDirect, you can invest in:
- Real estate — rental properties, commercial, land, tax liens, and more
- Private lending — become the bank and earn interest inside a tax-advantaged account
- Cryptocurrency — Bitcoin, Ethereum, Solana, and other digital assets
- Precious metals — gold, silver, platinum, and palladium meeting IRS purity standards
- Private placements and private equity — invest in businesses and funds outside Wall Street
- Promissory notes — lend money and collect interest tax-deferred or tax-free
- Syndications — participate as a passive investor in real estate or other deals
Every investment must comply with IRS rules, including prohibited transaction rules. uDirect provides guidance to help you stay compliant — but we always recommend working with a qualified tax advisor or attorney for transaction-specific advice.
The Solo 401(k) Loan Feature
One significant advantage the Solo 401(k) has over an IRA: you can borrow from it. You can take a loan of up to 50% of your account balance or $50,000 — whichever is less — without triggering taxes or early withdrawal penalties.
The loan must be repaid with interest (to yourself — back into the account), typically within five years. This can be a valuable liquidity tool for business owners who need short-term capital without touching their investments.
IRAs do not allow loans. This is one of the key reasons self-employed investors with significant retirement balances often prefer the Solo 401(k) structure.
Why Self-Employed Investors Choose uDirect IRA
Kaaren Hall founded uDirect IRA Services in 2009 — in the middle of a recession — because she saw a gap in the market. Self-employed investors and small business owners needed a custodian that understood alternative assets, answered the phone, and charged fair fees without the complexity of large institutions.
Today, uDirect administers over $1 billion in assets and has helped thousands of Americans put their retirement savings to work in real estate, private lending, and other alternatives. Kaaren serves on the Board of Directors of the Retirement Industry Trust Association (RITA) and is the author of the BiggerPockets Guide to Self-Directed IRA Investing.
When you call uDirect, you get a person. When you have a question about your account, you get an answer. That’s not a marketing line — it’s how we’ve operated for 16 years.
How to Open a Solo 401(k) with uDirect IRA
Getting started is straightforward. Here’s how it works:
- Contact us. Email info@uDirectIRA.com or call (866) 216-9736. We’ll confirm your eligibility and walk you through the process.
- Complete the applications. You’ll complete a Traditional Application (employee account) and a Solo 401(k) Application (employer account).
- Establish your EIN. The IRS requires each Solo 401(k) plan to have its own Employer Identification Number — we’ll guide you through that process.
- Sign your plan documents. We’ll send you a Plan Binder with your adoption documents. Once signed and returned, your plan is officially established.
Important: Your Solo 401(k) plan must be established by December 31 of the tax year for which you want to make contributions. Don’t wait until tax season.
Frequently Asked Questions — Solo 401(k)
What is the difference between a Solo 401(k) and a SEP IRA?
A Solo 401(k) allows both employee and employer contributions, while a SEP IRA only allows employer contributions. This means the Solo 401(k) typically allows higher total contributions — especially for those over 50 who can use catch-up contributions. Solo 401(k) plans also allow participant loans; SEP IRAs do not. For self-employed individuals with consistent income who want to maximize retirement savings, the Solo 401(k) is usually the stronger choice.
Can I have a Solo 401(k) if I also have a W-2 job?
Yes. If you have self-employment income from a side business — even while employed full-time elsewhere — you may be eligible for a Solo 401(k) for that business. Your contributions to an employer 401(k) through your day job affect the employee deferral limits across all plans, so coordination matters. Contact us and we can help you understand what’s available.
Can my spouse participate in my Solo 401(k)?
Yes — if your spouse receives compensation from the business, they can participate in the same Solo 401(k) plan. Each spouse gets their own account within the plan. This can effectively double the household’s annual retirement savings, potentially sheltering $160,000 or more per year depending on age and income.
Can I invest my Solo 401(k) in real estate?
Yes. With a self-directed Solo 401(k) at uDirect IRA, you can invest in real estate — including rental properties, commercial real estate, land, and tax liens. The property must be purchased by the plan, titled in the plan’s name, and all income and expenses must flow through the account. You cannot personally use property owned by your Solo 401(k). uDirect has administered real estate accounts since 2009 and can guide you through the process.
What is the Solo 401(k) loan feature?
A Solo 401(k) allows you to borrow up to 50% of your account balance or $50,000 — whichever is less — without taxes or early withdrawal penalties. The loan must be repaid with interest back into the account, typically within five years. This is a feature IRAs do not offer, and it can provide valuable liquidity for business owners who need short-term capital.
What are the contribution limits for a Solo 401(k) in 2026?
For 2026, the total contribution limit for a Solo 401(k) is $72,000 for those under age 50. Individuals age 50–59 or 64 and older can contribute up to $80,000, including an $8,000 catch-up. Individuals ages 60–63 may contribute up to $83,250, including a special enhanced catch-up of $11,250. These limits combine both employee salary deferrals and employer profit-sharing contributions.
When do I need to establish my Solo 401(k)?
Your Solo 401(k) plan must be established by December 31 of the tax year for which you want to make contributions. However, employer profit-sharing contributions may be made up to the business tax filing deadline, including extensions. Don’t wait until tax season to open the plan — the establishment deadline is firm.
What happens to my Solo 401(k) if I hire employees?
If you hire full-time W-2 employees who become eligible for the plan, the Solo 401(k) automatically converts to a standard 401(k) subject to ERISA requirements. This includes nondiscrimination testing, bonding requirements, and Form 5500 annual reporting. If you anticipate hiring employees, talk to us before that happens — there may be planning opportunities worth exploring.
Ready to Open a Self-Directed Solo 401(k)?
uDirect IRA has been helping self-employed investors take control of their retirement since 2009. We’re headquartered in Irvine, California, and we’re known for one thing above all else: when you call us, a real person picks up.
To get started, email us at info@uDirectIRA.com or call us toll-free at (866) 216-9736. We’ll confirm your eligibility, answer your questions, and walk you through every step.
Please contact us at (866) 745-0228 for more information