Solo 401(k) for Orthopedic Surgeons: 2026 Complete Guide

If you have any self-employment income — locum tenens shifts, expert witness fees, a private practice without non-owner employees — a solo 401(k) lets you shelter up to $72,000 per year (or $83,250 at ages 60–63) from federal taxes. That's more than a SEP-IRA at moderate 1099 income levels, plus the solo 401(k) offers Roth contributions and mega backdoor Roth that a SEP-IRA never will.

Who qualifies for a solo 401(k)?

Two requirements, both must be met:

1. Self-employment income. Any 1099 or Schedule C income qualifies: locum tenens contracts, expert witness fees, medical-legal consulting, device-company consulting (within Stark/AKS compliance), CME speaking fees, a sole proprietor or single-member LLC practice, or a two-person partnership where both partners are owner-spouses.
2. No full-time non-owner employees. If your practice has W-2 employees (other than your spouse) who work ≥1,000 hours per year, the plan is disqualified as a solo plan. You'd need a full-plan 401(k) covering those employees under ERISA nondiscrimination rules.

Orthopedic surgeons who commonly qualify:

• Locum tenens surgeons working on 1099 contracts through staffing agencies or direct arrangements
• Hospital-employed surgeons with additional 1099 side income (expert witness, device consulting, speaking) — the solo 401(k) captures the employer-contribution opportunity on that income even while they participate in the hospital's 403(b)
• Private practice owners running a lean structure — solo surgeon or with only a spouse on payroll
• Surgeons in locum-plus-private-practice situations — any fraction of 1099 income opens the door
• Pre-partnership associates who moonlight on 1099 before buy-in

2026 contribution limits

A solo 401(k) has two contribution buckets — employee (elective deferral) and employer (profit-sharing) — that combine up to the Section 415(c) annual limit.

Limits per IRS Notice 2025-67. Catch-up for ages 50–59 and 64+: $8,000. Super catch-up for ages 60–63: $11,250 per SECURE 2.0 § 109. Employee deferral is shared across all 401(k)/403(b) plans you participate in — it is not doubled if you have a hospital plan and a solo plan.

How the employer contribution is calculated for self-employed surgeons

For W-2 earners (S-Corp or employed), the employer contribution is straightforward: up to 25% of W-2 wages. For Schedule C / sole proprietors, the IRS requires a two-step adjustment because you're both employer and employee:

1. Calculate net self-employment earnings: net SE profit × 0.9235
2. Calculate self-employment tax on that amount (15.3% up to the SS wage base of $184,500, then 2.9% above)
3. Deduct half the SE tax from net profit: plan compensation = net profit − (SE tax ÷ 2)
4. Employer contribution = plan compensation × 20%

The "20%" is not a typo. Because the employer contribution itself reduces plan compensation in the denominator, the effective rate is 20% of (plan compensation) = 25% of (plan compensation minus the contribution). The result: at roughly $252,000 of net self-employment income, the employer contribution alone reaches $47,500, and the plan maxes out at $72,000 when combined with the employee deferral.

Solo 401(k) contribution calculator

Enter your 2026 net self-employment income (Schedule C profit after business expenses, before SE tax) and age to see your maximum contribution and tax savings.

Solo 401(k) vs SEP-IRA: which is better?

The choice comes down to three variables: income level, age, and whether you want Roth access.

The dollar-advantage breakdown

At incomes below roughly $252,000 of net SE income, the solo 401(k) and SEP-IRA have the same employer contribution formula — the difference is that the solo 401(k) adds a separate employee deferral on top. That means at $150K of 1099 income, the solo 401(k) advantage is about $24,500 (the full employee deferral), minus any amount already deferred through an employer plan.

At incomes above $252K, both plans max out at $72,000 on a pre-tax basis. The solo 401(k) still wins on:

• Catch-up contributions at 50+: $8,000 extra in a solo 401(k), unavailable in a SEP-IRA
• Roth designation on the employee deferral — permanently tax-free growth
• Mega backdoor Roth — potentially $47,500+ more going in after-tax and converting to Roth

Hospital-employed surgeons with 1099 side income

This is one of the most under-utilized planning opportunities for hospital-employed orthopedic surgeons. You can open a solo 401(k) for your 1099 income — expert witness fees, device consulting, locum shifts — even while you contribute to the hospital's 403(b) or 401(k).

The rule: the employee deferral limit ($24,500 in 2026) is shared across all plans you participate in. But the employer contribution from each employer is calculated independently and does not count against the other employer's limit.

Practical example: You're a spine surgeon employed at a Level I trauma center earning $725K W-2, maxing your hospital's 403(b) at $24,500 + $8,000 catch-up. You also earn $120,000 per year in expert witness and device consulting fees.

Without the solo 401(k), your 1099 income would be fully taxable. With it, you redirect $21,000 of consulting income into a tax-deferred account at no incremental payroll-tax cost — the consulting income is already above the SS wage base on the W-2 side. See orthopedic surgeon side income strategies for more on this structure, and locum tenens financial planning for the full locum-employment scenario.

Mega backdoor Roth opportunity

A solo 401(k) can accept after-tax contributions that are then converted to Roth — the "mega backdoor Roth." The mechanics:

1. Your plan document must explicitly permit after-tax (non-Roth) contributions and allow in-service withdrawals or in-plan Roth conversions. This is not default — confirm it when setting up the plan or ask your custodian to amend.
2. After-tax contributions fill the gap between your pre-tax employee + employer contributions and the § 415(c) limit ($72,000 at under-50).
3. You convert those after-tax dollars to Roth either within the plan (in-plan conversion) or by rolling them out to a Roth IRA (in-service withdrawal).
4. Result: those dollars grow permanently tax-free and are not subject to RMDs in a Roth IRA.

Example: $150K net SE income, age 42. Pre-tax maximum = $24,500 (employee) + $26,600 (employer) = $51,100. After-tax room = $72,000 − $51,100 = $20,900. Converting that $20,900 to Roth costs only tax on any growth since contribution — often days or weeks — and it permanently escapes RMDs. See backdoor and mega backdoor Roth guide for the full strategy.

Setup guide and custodians

Setting up a solo 401(k) takes about 30–60 minutes at most major custodians. The plan must be adopted (signed plan document) by December 31 of the year you want to make contributions.

Step-by-step setup

1. Choose a custodian. For most ortho surgeons, Fidelity (Self-Employed 401k), Schwab (Individual 401k), or E*Trade (Solo 401k) work well. If you want after-tax/mega backdoor Roth: Fidelity or E*Trade. If you want maximum investment flexibility: a third-party administrator with a custom plan document (Ascensus, Vanguard Retirement Plan Access for larger balances).
2. Apply for an EIN for your self-employment entity if you don't already have one. Takes about 15 minutes at IRS.gov/EIN.
3. Adopt the plan document. Most custodians provide a pre-approved IRS prototype plan. Sign it before December 31.
4. Open the account. Link your business checking account for contributions.
5. Elect Roth for employee deferral if you want the Roth designation. Some custodians allow you to split — part Roth, part traditional.

Form 5500-EZ

Once the plan's total value (all accounts, including all participants — usually just you) exceeds $250,000 at year-end, you must file Form 5500-EZ annually with the IRS. Missing this is a common oversight; the penalty is $250/day up to $150,000. Set a calendar reminder. When the plan passes $250K for the first time, the filing is due by July 31 of the following year.

Key deadlines

The December 31 plan-establishment deadline is the most frequently missed. If you receive a large locum tenens or consulting payment in late November, you have weeks — not months — to get the plan document signed. Don't wait until you file taxes in April.

For the complete picture of how a solo 401(k) fits into your overall retirement savings stack — including cash balance plans that can add another $100K–$290K in tax-deferred contributions for private practice owners — see the orthopedic surgeon retirement planning guide. If you're also thinking about Roth conversions after you reduce practice, read Roth conversion strategy for the full window analysis.

OrthoAdvisorMatch is a referral service, not a licensed advisory firm. We may receive compensation from professionals in our network. Content is for informational purposes only and does not constitute financial, tax, or investment advice.