Independent 401(k)

Independent 401(k). The independent 401(k) -- also known as a solo 401(k), indy-k, or uni-k -- is a variation of the 401(k) designed for people who are self-employed or operate a small business with a partner, spouse, or other immediate family members.

The annual contribution limit is the same as it is for other 401(k) plans, and catch-up contributions are allowed for participants 50 and older.

The plans are easier and less expensive to administer than traditional 401(k)s, and they have certain potential advantages over other retirement plans for small businesses as well, including high contribution limits, access to tax-free loans, and the ability to roll over savings from most other retirement plans.

Most business entities qualify to set up an independent 401(k), including partnerships, corporations, S-corporations, limited liability partnerships (LLPs), limited liability companies (LLCs), and sole proprietorships.