The SECURE Act 2.0, signed into law in December 2022, introduced the most significant changes to retirement plan rules in decades. For self-employed individuals and small business owners who rely on Solo 401(k) plans, understanding these changes is essential. Several of the most important provisions took effect in 2024 and 2025, and additional rules continue to phase in through 2026 and beyond.

As a tax attorney who has spent more than 25 years helping entrepreneurs build retirement wealth, I want to walk through the key Solo 401(k) changes that matter most for business owners in 2026. Some of these changes are highly beneficial and create significant new planning opportunities. Others require careful attention to avoid compliance issues.

2026 Solo 401(k) Contribution Limits

Before reviewing the SECURE Act 2.0 changes, it helps to understand where the 2026 contribution limits stand.

These limits apply to Solo 401(k) plans and represent some of the highest retirement contribution limits available to any retirement plan participant in the United States.

The Enhanced Catch-Up Contribution for Ages 60 to 63

One of the most valuable new provisions introduced by SECURE Act 2.0 is the enhanced catch-up contribution for participants between ages 60 and 63. Beginning in 2025 and continuing through 2026, eligible participants in this age range can make catch-up contributions of up to $11,250, compared with the standard $8,000 catch-up available to participants age 50 and older.

This means a Solo 401(k) participant between ages 60 and 63 in 2026 can contribute up to $83,250 in total annual additions, including both employee and employer contributions, assuming sufficient self-employment income. For business owners in this age range who are in peak earning years and seeking to maximize retirement savings before leaving the workforce, this represents a significant planning opportunity.

This enhanced catch-up amount is indexed for inflation beginning in 2026. The $11,250 figure reflects the 2026 indexed amount, which has already been announced by the IRS.

The Mandatory Roth Catch-Up Rule

One of the more technically complex provisions introduced by SECURE Act 2.0 is the mandatory Roth catch-up rule, which took effect on January 1, 2026 after the IRS granted a two-year administrative transition period.

Under this rule, participants age 50 and older who earned more than $145,000 in FICA wages from the plan sponsor in the prior year must make all catch-up contributions as Roth contributions rather than pre-tax contributions. For 2026, the prior-year wage threshold is $150,000, reflecting inflation adjustments. This applies to catch-up contributions made under IRC Section 402(g)(1)(C).

For Solo 401(k) participants, this rule applies when the business owner is the employer of record and earns wages through a corporation. Self-employed individuals operating as sole proprietors or single-member LLCs who pay themselves through self-employment income rather than W-2 wages generally are not subject to this rule because they do not have FICA wages in the traditional sense. However, S corporation owners and other business owners who pay themselves a W-2 salary may be affected.

The practical compliance implication is significant. Solo 401(k) plans that do not currently offer a Roth contribution feature must be amended to add one before January 1, 2026 to remain compliant with the mandatory Roth catch-up requirement. Business owners whose plans do not include a Roth option should verify whether their plan documents have been updated.

Roth Employer Contributions

Prior to SECURE Act 2.0, employer contributions to 401(k) plans were required to be made on a pre-tax basis. SECURE Act 2.0 changed this by allowing plans to permit employer contributions, including profit-sharing contributions, to be designated as Roth contributions at the employee’s election.

For Solo 401(k) plans, this is a significant new planning opportunity. Previously, the only way to generate Roth assets inside a Solo 401(k) was through elective Roth deferrals or an in-plan Roth conversion. Now, the employer profit-sharing contribution, which can be as large as 25% of compensation up to the annual addition limit, can also be designated as Roth.

Business owners who want to maximize tax-free retirement savings should consider whether designating employer contributions as Roth makes sense given their current and anticipated future tax situation. The tradeoff is that Roth employer contributions are not tax-deductible by the business, meaning the business pays tax on those amounts today. However, for business owners who expect higher tax rates in the future or who simply want to maximize the Roth portion of their retirement savings, this new option can be very attractive.

Not all Solo 401(k) plan documents have been updated to include this option. Business owners who want to take advantage of Roth employer contributions should confirm that their plan document supports this feature.

Student Loan Matching Contributions

SECURE Act 2.0 introduced a new provision that allows employers to treat qualified student loan payments made by employees as elective deferrals for purposes of the employer matching contribution. In other words, if an employee is making student loan payments and is therefore unable to maximize retirement plan contributions, the employer can still make a matching contribution based on the student loan payment amount.

For most Solo 401(k) plans, this provision has limited practical application because the IRA owner is typically both the employer and the sole participant. However, if a Solo 401(k) plan has been expanded to cover a spouse who has qualified student loan payments, this provision could allow matching contributions to be made based on those payments, even if the spouse is not making elective deferrals into the plan.

Business owners who employ their spouse in the business and maintain a Solo 401(k) plan that covers the spouse should review whether the student loan matching provision creates any planning opportunities.

Emergency Savings Account Provisions

SECURE Act 2.0 allowed employers to add a Pension-Linked Emergency Savings Account to defined contribution retirement plans beginning in 2024. These accounts allow non-highly compensated employees to make Roth after-tax contributions of up to $2,500 annually for emergency savings purposes, with the ability to withdraw funds without penalty.

For Solo 401(k) plans, this provision is generally not applicable because solo participants are typically highly compensated employees. However, business owners who employ workers other than themselves or their spouse should understand that SECURE Act 2.0 included numerous provisions designed to encourage emergency savings access, and some of those rules may apply depending on plan structure and employee classifications.

Surviving Spouse Rules

SECURE Act 2.0 introduced new flexibility for surviving spouses who inherit retirement assets from a deceased spouse. Under prior law, surviving spouses who were beneficiaries of a deceased participant’s retirement account were generally required to begin required minimum distributions based on the participant’s age had they survived. The new rules give surviving spouses the option to elect to be treated as the deceased participant for RMD purposes, allowing them to defer distributions until the year the deceased participant would have reached the RMD age.

For Solo 401(k) plan participants, this provision can be particularly meaningful for estate planning purposes. Business owners who have named their spouse as beneficiary of their Solo 401(k) plan should review how these new rules affect their estate plan.

Required Minimum Distribution Age

SECURE Act 2.0 increased the required minimum distribution starting age from 72 to 73 effective January 1, 2023. The RMD age will further increase to 75 beginning January 1, 2033.

For business owners who are still actively working and contributing to a Solo 401(k), RMDs from the Solo 401(k) plan can generally be deferred until the year of retirement, provided the plan document includes the still-working exception and the participant is not a more-than-5% owner of the business. However, once the participant retires or reaches the applicable RMD age, distributions must begin.

Business owners approaching age 73 who have not yet retired should consult with a qualified retirement plan adviser to understand their RMD obligations under the current rules.

Plan Document Compliance

Perhaps the most important action item for any Solo 401(k) plan owner is ensuring that the plan document has been updated to reflect the SECURE Act 2.0 changes. Many of the new provisions, including mandatory Roth catch-up contributions, optional Roth employer contributions, student loan matching, and emergency savings accounts, require plan document amendments to implement.

The IRS has provided guidance on the deadline for adopting SECURE Act 2.0 amendments, and plan sponsors generally have until December 31, 2026 to adopt required amendments for provisions effective before 2025. However, operational compliance, meaning actually operating the plan in accordance with the new rules, is required even before the formal amendment deadline.

Business owners who are unsure whether their Solo 401(k) plan documents are current should verify the status of their plan with their plan document provider.

Final Thoughts

SECURE Act 2.0 introduced meaningful improvements for Solo 401(k) participants, particularly around catch-up contributions, Roth flexibility, and new optional features. At the same time, it introduced compliance requirements, most notably the mandatory Roth catch-up rule, that require plan documents to be updated and administrative practices to be reviewed.

At IRA Financial, our Solo 401(k) plan documents are maintained and updated by our in-house team of tax attorneys and ERISA professionals to reflect current law, including all applicable SECURE Act 2.0 provisions. If you have questions about how these changes affect your Solo 401(k) plan or want to review your current plan structure, our team is available for a free consultation.