Small business 401(k) plans used to be a fee disaster — $5k+ setup fees, 1.5%+ all-in expense ratios, terrible fund selection. The 2026 generation of providers (Guideline, Vestwell, Human Interest, Pontera) flipped this. For a 10-person business, you can now run a 401(k) for $80–$200/month total, with low-cost Vanguard fund selection. Solo entrepreneurs can do even better via Solo 401(k).
Pick by business size
| Size |
Best option |
Cost |
| Solo / spouse only |
Fidelity Solo 401(k) |
$0 |
| 2–10 employees |
Guideline |
$79/mo + $8/ee |
| 10–50 employees |
Guideline or Human Interest |
$89–$120/mo + per-ee |
| 50–200 employees |
Vestwell, ForUsAll |
Volume pricing |
Best for solopreneurs — Fidelity Solo 401(k)
If you're self-employed with no employees (besides spouse), open a Solo 401(k) at Fidelity. $0 setup, $0 annual fees, $0 trading commissions.
2026 contribution limits:
- As employee: up to $23,500 ($31,000 if 50+)
- As employer: up to 25% of compensation
- Combined max: $69,000 ($76,500 if 50+)
This is the single most powerful retirement account available to a solo entrepreneur with strong income. Combined with a Roth IRA, you can shelter $76,000+ per year tax-advantaged.
Best for small teams — Guideline
EDITOR'S PICK SMALL TEAM
Guideline 401(k)
$79/mo base + $8/employee/mo. No AUM fees on participant balances. Vanguard / iShares fund lineup with 0.05–0.15% expense ratios. Modern dashboard, fast setup (typically 30 days), automated compliance + 5500 filings.
Visit Guideline →
For a 10-person company: $159/mo total = ~$1,900/yr. Compared to traditional 401(k) providers charging 1% AUM: on $500k of plan assets, that's $5,000/yr saved.
SEP IRA vs Solo 401(k) — which to pick
SEP IRA: simpler, employer-only contributions (25% of comp), no employee contributions, no Roth option.
Solo 401(k): more flexible, allows both employee + employer contributions, has Roth option, allows $50k loans against balance.
For most self-employed: Solo 401(k) wins unless you literally only want a 5-minute setup (SEP).
What's NOT worth your money
- Big-name 401(k) providers (John Hancock, Empower, Voya) charging 1%+ AUM — fleecing small businesses
- Group annuities dressed up as 401(k)s with 2%+ fees
- 401(k) products bundled with high-fee mutual funds — even at 0.50% all-in, you're losing $300k over 30 years on a $500k balance vs a 0.05% plan
- Setup fees over $500 — modern providers don't charge them
- Expensive payroll integrations when Gusto, Rippling, ADP all integrate with Guideline natively
FAQ
Can I open a Solo 401(k) if I have a side hustle?
Yes — any self-employment income qualifies. Even if you have a W-2 day job + a side hustle, you can have a Solo 401(k) for the side income.
What's the Roth Solo 401(k)?
Same as Solo 401(k) but employee contributions are after-tax (like Roth IRA). Powerful for high-income earners who'll be in higher brackets later.
How does the employer match work in a small business 401(k)?
Common matches: 100% of first 3% of salary contributed, plus 50% of next 2%. Or simpler: a flat 3% safe-harbor contribution (avoids non-discrimination testing).
Can I switch 401(k) providers?
Yes — typically 60–90 day process. Plan assets transfer in-kind or as cash; no tax event for participants.
What about a SIMPLE IRA instead?
SIMPLE IRA caps employee contributions at $16,000/yr (2026), much lower than 401(k). Use only for very small businesses where 401(k) admin feels heavy.
Do I need to file Form 5500 every year?
Yes for 401(k) plans with assets >$250k. Modern providers (Guideline, Vestwell) handle this automatically.
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