The Fidelity Solo 401k Plan is a free solo 401k plan with no account opening and closing costs, no annual fees, and $0 commission for online US stock, ETF, and options trades. They provide a pre-tax solo 401k account, without a Roth option, and the ability to invest in a wide range of traditional assets.
While the Fidelity Solo 401k is one of the best free solo 401k plans, the downsides are that they do not offer the ability to invest in alternative assets, don’t let you make Roth contributions, and you still have to mail in a physical check when you want to make a contribution.
Table of Contents
|Contribution limit||$61,000 for 2022, $66,000 for 2023|
|Catch-up contributions (if age 50+)||$6,500 for 2022, $7,500 for 2023|
|Investment options||Stocks, bonds, mutual funds, ETFs.|
|Contribution method||Mail in a check|
|Invest in alternative assets||No|
|Invest in crypto||No|
|Invest in real estate||No|
|Invest in private equity||No|
The Fidelity Solo 401k is completely free to set up your account, and most investments into US securities have $0 commissions.
Contribution limits and Roth
You can contribute up to $61,000 for 2022 and $66,000 for 2023. If you’re at least 50 years of age, you can contribute an additional $6,500 for 2022 and an additional $7,500 for 2023.
The Fidelity Solo 401k does not come with a Roth option. You can only make pre-tax contributions, but there is no option to contribute to a Roth solo 401k. Furthermore, they also do not offer the mega backdoor Roth.
Fidelity offers more investment options than something like the Vanguard Solo 401k, but you’re still limited to traditional assets. You can invest in a wide range of individual stocks, bonds, mutual funds, and ETFs, but you cannot invest in alternative assets like crypto, real estate, or private equity.
If you want to invest in alternative assets, you’ll need to open a self-directed solo 401k instead.
Rollovers & Loans
Fidelity offers the ability to rollover funds and assets from most retirement plans like a 401k, SEP IRA, SARSEP, SIMPLE IRA, 403b, 457b, and a traditional IRA. The IRS does not allow rollovers of a Roth IRA into a solo 401k.
Fidelity does not offer the ability to take a solo 401k loan.
Fidelity offers one of the best free solo 401k plans, with the ability to invest pre-tax income into a wide variety of traditional assets like stocks, bonds, mutual funds, and ETFs.
However, because it’s a free solo 401k, it lacks many premium features like a Roth account, mega backdoor Roth, solo 401k loans, and the ability to invest in alternative assets. In addition, they still make you mail in a physical check to make contributions.
If you’re not looking to contribute to a Roth account, and are only looking for a basic solo 401k plan that lets you invest pre-tax income, the Fidelity Solo 401k Plan is one of the best prototype plans available. However, if you’re looking for more premium features, a more modern interface, and the ability to invest in any asset class with tax-free compounding, you should consider a self-directed solo 401k plan, like the Ocho Solo 401k.
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