Every solopreneur has a long list of time-consuming tasks to get done each day. From sales to marketing, pricing to relationship management, there's always a ton to do — and that's before providing the service you offer.
Based on this, it's no wonder that 34% of solopreneurs aren't saving for retirement, or that 81% wish they'd learned about it earlier.¹ When you're a business of one handling everything a small business would cover with employees, you may not have much time to focus on anything but your business.
Enter the Solo 401(k) plan. It's a powerful way for solopreneurs to save for retirement, all while possibly helping to lower your tax bill.2 But for a period of time, contributing to it could be a clunky process.
That's where Gusto’s flexible Solo 401(k) contributions come in — a set of fully digital options that provides easy, flexible, and transparent control over when and how you contribute, entirely on your own schedule.3
Read on to learn how Gusto’s flexible Solo 401(k) contributions can help you ditch the paper check and automate your contributions so you can help build your nest egg.
The Gusto 401(k) Difference: Digital, Flexible Contribution Options
As a business owner, your income can fluctuate, and Gusto Retirement understands that your retirement savings plan needs to be just as flexible. Instead of mailing in a paper check, you can contribute to your Solo 401(k) plan in several ways. Gusto Retirement offers several quick and convenient ways to contribute, all with timely confirmation. No matter how you pay yourself, you can tailor your contribution schedule to fit your needs and you can add or cancel3 contributions at any time.4
Payroll deductions. If you file as an S- or C-corporation and pay yourself a regular salary via W-2 wages, your deferrals will be made through payroll deduction. You can set up automatic deductions from each paycheck, helping to make saving for retirement a seamless part of your routine. If your wage type ever changes, we'll carry over your contribution amount and send you a reminder to adjust it if needed.
Owner contributions. If your income is as a sole proprietor or partner and fluctuates throughout the year, you can make owner contributions to your Solo 401(k) plan directly from your business account. There are two ways to do so:
One-time deposits. Having a great quarter and want to contribute more? You can easily make a lump-sum, one-time deposit to your account. Note that you can make multiple one-time deposits throughout the year.
Scheduled recurring deposits. You can also schedule recurring contributions from your business account. This is a simple way to stay on track with your retirement goals, and you can set up multiple recurring schedules at once.
Business type matters. The business type you use to file your taxes has a direct impact on eligible compensation used to make contributions to your Solo 401(k) plan. For example, if you're an S-corporation owner, only your W-2 wages count as eligible compensation for plan purposes; K-1 distributions can't be used to calculate or fund your Solo 401(k) contributions. And if you have self-employment income as a sole proprietor or partner, you must actually have earned income (net self-employment earnings) for the year to make elective deferrals; you can't defer against a loss or income you haven't yet earned. It's recommended that you consult with your tax advisor before you begin contributions to your 401(k) plan.2
What This Means for Solo Entrepreneurs
Solopreneurs should expect easy, digital contribution options for their 401(k) plan, just like a traditionally employed person. Our streamlined process helps reduce the complexity and stress of saving for retirement, which can give you confidence. That means we'll handle your retirement savings so you can keep your focus where it matters most: your business.
Smoother saving isn't just about getting time back, though. Digital flexibility can help you stay disciplined with your retirement goals. It can remove the barriers to actually making contributions, potentially increasing the amount you'll save in the long run. This can be even more important with a Solo 401(k) plan, since you may have the opportunity to contribute ten times more to a 401(k) plan than to a personal IRA.²
Ready to Start Saving for Retirement?
Even though you're grinding, you don't have to potentially miss out on the tax advantages and future benefits of saving for retirement. Gusto Retirement’s flexible digital contribution options can make it easy for you to start saving today.
If you're ready to start saving for your future, explore opening a Solo 401(k) plan with Gusto Retirement today.
FAQs
What is a Solo 401(k) and who is it for?
A Solo 401(k) is a retirement plan designed for self-employed individuals and business owners with no full-time employees (other than a spouse). It offers the same powerful tax advantages as a traditional 401(k) — tax-deferred growth and the ability to lower your taxable income — but is structured for people who work for themselves.2 Solopreneurs can contribute both as an "employee" and as an "employer," allowing for significantly higher annual contributions than a personal IRA.5
How can I contribute to a Gusto Solo 401(k)?
Gusto Retirement offers three digital contribution methods: payroll deductions (automatic deductions from each W-2 paycheck, required for S-corp or C-corp owners), one-time deposits (lump-sum contributions from your business account, which can be made multiple times per year), and scheduled recurring deposits (automatic contributions on a set schedule from your business account). All methods are fully digital — no paper checks required — and contributions can be added or canceled3 at any time.4
What's the difference between payroll deductions and owner contributions?
Payroll deductions are required for business owners who pay themselves a regular W-2 salary through an S- or C-corporation. Owner contributions (one-time or recurring deposits) are available for sole proprietors and partners whose income fluctuates throughout the year. The right method depends on how you pay yourself and how your business is structured; your tax advisor can help determine the best approach for your situation.
How does my business structure affect my Solo 401(k) contributions?
Your tax filing structure directly determines what counts as "eligible compensation" for contribution purposes. S- and C-corp owners can base contributions on W-2 wages (but not any K-1 distributions), while sole proprietors and partners calculate contributions based on net self-employment income. Because the rules differ by entity type, you should consult a tax advisor before beginning contributions to make sure you're contributing the right amounts.
How much can I contribute to a Solo 401(k) compared to an IRA?
Solo 401(k) plans allow significantly higher contributions than a personal IRA. Contribution limits may vary by age and are adjusted annually by the IRS for cost-of-living changes, but in some cases, you potentially could contribute up to ten times more to a Solo 401(k) than to a personal IRA. This makes a Solo 401(k) one of the most powerful retirement savings vehicles available to self-employed individuals. Learn more about current contribution limits.5
Disclosures
¹ Gusto Retirement Services, LLC research run with Suzy. Insights based on data collected March–April 2025 from a survey of 884 self-employed individuals. Neither Gusto Retirement nor its affiliates were identified as the survey sponsor. The experience of the respondents in this survey may not be representative of all people.
2 This content is for informational purposes only and is not intended to be taken as tax advice. Please contact a tax professional for further information.
3 Canceling contributions applies only going forward; past contributions cannot be undone. For self-employment income, once the plan year ends, you cannot cancel or change your deferral election for compensation already earned in that year. For W-2 income, a deferral cannot be canceled once it has already been withheld from a paycheck; a cancellation applies only to future paychecks.
4 While you have flexibility in how and when you fund your Solo 401(k) during the year, IRS deadlines still apply. If you earn self-employment income, your deferral election generally must be made no later than the end of the plan year (December 31 for a calendar-year plan) to apply to compensation earned that year. All contributions, both deferrals and employer contributions, must be deposited by your business's tax filing deadline, including extensions, to count for that tax year.
5 Varies by age and may be adjusted annually to account for IRS cost-of-living adjustments. Learn more.
