What is a solo 401k contribution calculator?

A solo 401k contribution calculator is a retirement calculator that self-employed individuals can use to help them determine the maximum amount they can contribute to an individual 401k plan each year. Many solo 401k calculators also help you choose between savings options: a 401k plan, a SEP IRA, a SIMPLE IRA, or a Profit Sharing plan.

Where can I find a free solo 401k calculator?

Here are some reliable sources for a solo 401k or individual 401k contribution calculator:

Bankrate
SurePayroll
Beacon Capital Management
AARP

Why should I use a solo 401k contribution calculator?

One of the advantages of a solo or individual 401k is that the contributions and earnings are tax deferred, so you only pay taxes on them when you withdraw money. Such plans typically have fairly high limits. For example, the 2013 solo 401k contribution limits were $51,000 and 56,500 if age 50 or older. But, there are limits on how much a self-employed individual can contribute to a solo 401k each year. Using one of the above calculators can help you determine what those limits are for the current tax year.

There’s another reason you may want to use a solo 401k calculator like the ones listed above. They can help you explore your retirement saving options. Self-employed individuals have a number of different options outside of an individual or solo 401k. They may choose to invest in an SEP IRA (Simplified Employee Pension), a SIMPLE IRA, or a Profit Sharing plan. The AARP calculator shown above helps you compare the savings of these different plans based on your company size and circumstances. Make sure to explore all your options as a self-employed individual before committing to a retirement plan.