Individual or Solo 401kplan

A reader asked “Is it feasible and allowable to have a 401(k) plan for one employee?” I checked with Chet Teichman, CFP at Lighhouse Financial. He said “You can have an ‘Individual or Solo 401k Plan’ if the owner is the only employee.  Spouses can also be in the plan.  However, if you have other full-time W-2 employees you will be required to allow them to participate and be subject to basic 401k rules.  Costs are reasonable if you use a company that has a niche in Individual 401k plans.  If you have multiple employees, but less than 100, a SIMPLE plan can be a cost effective alternative to a basic 401k plan.”