Beaconshire Advisory · www.beaconshireadvisory.com · Solo 401(k) & Owner Retirement Contribution Calculator (2026) · printed
Calculator · Tax
How much can I put away this year — and what does it save me?
The 2026 limits are $24,500 of deferral, $8,000 of catch-up at 50 ($11,250 at 60–63), and $72,000 in total — but the employer share is where owners get it wrong. This calculator computes it the way Publication 560 does (20% of net self-employment earnings, or 25% of S-Corp wages), compares Solo 401(k), SEP and SIMPLE side by side, and shows the tax you save at your real marginal rate.
Plan comparison for 2026
Maximum you could contribute to each plan type at this income and age.
How the Solo 401(k) maximum is built
Follows the Publication 560 deduction worksheet.
Projected balance
Your planned household contribution each year, compounded at the return you assume. Not a forecast of markets.
What this means
The rules that matter most for owners.
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How it works
Methodology & assumptions
- 2026 limits (IRS Notice 2025-67): elective deferral
$24,500; catch-up$8,000at age 50+,$11,250for ages 60–63; overall §415(c) limit$72,000(catch-ups sit on top); compensation limit$360,000. SEP: 25% of compensation up to $72,000. SIMPLE:$17,000deferral,$4,000catch-up ($5,250 at 60–63), 3% match. IRA:$7,500+$1,100catch-up. - Sole proprietors and partners. Compensation = net earnings from self-employment − one-half of self-employment tax (computed with the 2026 wage base). The employer contribution is 20% of that amount, which is the Pub 560 “self-employed rate” equivalent of a 25% plan rate (
0.25 ÷ 1.25 = 0.20). Deferral and catch-up are limited to compensation. - S-Corp owners. Compensation = your W-2 wages (capped at $360,000). Employer contribution = 25% of wages. Distributions do not count.
- Spouse. If a spouse is paid W-2 wages by the business, they get their own full set of limits, computed the S-Corp way on their wages.
- Tax saved = federal tax with and without the pre-tax contribution (using the 2026 brackets and your filing status and other income) plus state rate × contribution. Roth deferrals are excluded from the deduction; employer contributions are always pre-tax.
- Projection compounds the planned annual contribution at the assumed return for the number of years entered, with contributions at year-end. It ignores future limit increases, fees and taxes on withdrawal.
- Not modeled. Defined-benefit / cash-balance plans (which can allow far larger contributions for older high earners), after-tax “mega backdoor” contributions, controlled-group rules if you own other businesses with employees, and the 10% excise tax on excess contributions.
This calculator is an educational estimate built from published figures and the assumptions listed above. It is not tax, legal, or financial advice, does not account for every provision that may apply to you, and is not a substitute for a return prepared from your actual records. Figures are checked when published and may lag mid-year changes.
Questions
Common questions
Solo 401(k) or SEP-IRA?
At most incomes the Solo 401(k) allows substantially more because the $24,500 employee deferral (plus catch-up) stacks on top of the same employer percentage a SEP allows. The SEP wins only on simplicity: no plan document, no Form 5500-EZ, and it can be opened and funded after year-end. If you are over 50, or your income is under roughly $300,000, the 401(k) usually comes out well ahead.
Why is my employer contribution 20% and not 25%?
Because for a self-employed person the contribution itself reduces the compensation it is based on, and so does half of self-employment tax. Publication 560’s rate worksheet converts a 25% plan rate into 20% of net earnings after the SE-tax deduction. An S-Corp owner uses 25% of W-2 wages because wages are fixed before the contribution.
Can I still open a plan for 2026?
A Solo 401(k) must be adopted by December 31, 2026 for your employee deferral to count for 2026; the employer contribution can be funded up to the extended due date of your return. A SEP can be opened and funded as late as the extended due date. Note the SECURE 2.0 change that lets a sole proprietor’s first-year deferral be made up to the unextended due date for a plan adopted after year-end — ask before relying on it.
What is the Roth catch-up rule?
Starting in 2026, if your FICA wages from the employer in the prior year exceeded $150,000, any catch-up contribution to that employer’s 401(k) must be designated Roth. It applies to S-Corp owners paying themselves wages; it does not apply to sole proprietors (no FICA wages), and SEP and SIMPLE plans are exempt.
I have employees. Does this still apply?
A Solo 401(k) is only for businesses with no employees other than the owner and spouse (part-timers under 1,000 hours were historically excluded; long-term part-time rules now bring in employees with two consecutive years of 500+ hours). If you have eligible employees, the plan must cover them, and contribution testing applies. That is a different analysis — often a safe-harbor 401(k) or a cash-balance plan.
Pre-tax or Roth?
Pre-tax wins if your marginal rate today is higher than your expected rate in retirement; Roth wins if the reverse, or if you value tax-free growth and no required distributions. Many owners split: pre-tax employer contributions (they must be), Roth deferrals when their current bracket is moderate.
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