# Solo 401(k)

*Retirement & Benefits — Finicade finance glossary*

A solo 401(k) covers a business owner with no employees but a spouse, allowing contributions in two capacities at once — as employee and as employer.

A solo 401(k) covers a business owner with no employees other than a spouse, and it allows contributions in two capacities at once — as employee and as employer. That structure shelters far more at moderate income than a SEP IRA, since the employee portion isn't a percentage of profit. Most providers also offer a Roth option and the ability to borrow from the plan, neither of which a SEP allows.

**Also known as:** solo 401k, individual 401(k), one-participant 401(k)

**Related terms:** [SEP IRA](https://finicade.com/glossary/sep-ira), [401(k)](https://finicade.com/glossary/401k), [Self-Employment Tax](https://finicade.com/glossary/self-employment-tax), [Contribution Limit](https://finicade.com/glossary/contribution-limit), [Roth IRA](https://finicade.com/glossary/roth-ira)

Source: https://finicade.com/glossary/solo-401k