The Solo 401(k): The $72,000 Retirement Account CRNAs Aren't Maxing Out
Adapted from Episode 3 of The Financial Cocktail podcast. Listen wherever you get your podcasts, or read the full episode below.
At the end of the last episode, I promised we’d talk about the single best retirement account for 1099 CRNAs. I don’t say “best” lightly. This account dominates. It’s a big part of what makes 1099 work as valuable as it can be. If you do locum work, run your own practice, or pick up any 1099 income at all, anesthesia-related or otherwise, this one is for you.
Most people assume retirement account contribution limits are the same no matter how you work. They’re not. The tax code rewards self-employment in a way almost nobody takes full advantage of, and today we’re going to fix that.
The 401(k) contribution maximum isn’t the $24,500 your employer tells you about. It’s actually $72,000 a year in 2026, nearly triple. I know what you’re thinking: that can’t be right. Let me walk you through exactly how it works, and why almost every 1099 CRNA should have one of these accounts.
Where the 401(k) Came From
In the 1980s and ’90s, employers shifted from pensions to 401(k)s. That moved the responsibility for retirement saving from the employer to the employee.
The government isn’t keen on supporting people later in life. If someone stops earning income without enough set aside, they become a financial burden. So as pensions disappeared, the 401(k) took their place. The name comes straight from Section 401, subsection (k), of the Internal Revenue Code.
The deal is simple. The government gives you a tax break today as an incentive to save for the future. You save during your earning years, when your income and tax rate are theoretically highest, and withdraw later, when your earned income is low or gone and your tax rate is lower. That tax arbitrage is the reason to use tax-advantaged accounts, and the higher your tax rate, the more valuable it is. That describes most CRNAs.
What Is a Solo 401(k)?
A Solo 401(k), also called an individual 401(k), is a retirement plan designed for self-employed people with no full-time employees other than a spouse. The IRS essentially gives solo business owners the same retirement vehicle Fortune 500 companies use, with a fraction of the administrative burden.
If you have a single-member LLC, an LLC taxed as an S-corp, a sole proprietorship, or any 1099 income with no employees, you almost certainly qualify.
The Two Buckets That Make It Powerful
Bucket 1: Employee elective deferral
This is the bucket everyone with earned income has, W-2 or 1099. In 2026, you can defer up to $24,500 as the employee. Even though you’re self-employed, you get the full employee limit.
Catch-up contributions add more as you get older:
Age 50 and older: an extra $8,000 a year
Ages 60 to 63: SECURE 2.0 created a “super catch-up” of $11,250 instead of $8,000, bringing total employee deferrals to $35,750
Bucket 2: Employer profit-sharing contribution
This is where it gets interesting. When you hear about a 401(k) “match,” this is the bucket people mean: your employer puts a portion of your earnings into your account.
As a 1099 CRNA, you wear both hats. You’re the employee and the employer. If your business is taxed as an S-corp, the employer side can contribute up to 25% of the W-2 salary you pay yourself. Sole proprietors can contribute roughly 20% of net self-employment earnings.
This second bucket is what blows the ceiling off retirement contribution limits.
Example: A 1099 CRNA Earning $300,000
Say you’re a 1099 CRNA earning $300,000 this year:
You max the employee side at $24,500.
As the employer, you contribute 20% to 25% of your compensation, which could easily be another $55,000 to $75,000.
Altogether, that’s close to $100,000. It would be amazing to contribute all of it, but the IRS caps total contributions at $72,000. On a $300,000 income, you clear that ceiling easily and can max out the full $72,000.
The Baller Example: CRNA Plus Spouse
Now let’s go bigger. This CRNA runs an LLC taxed as an S-corp (more on that in a future episode), and their spouse works for the business.
The CRNA
Pays themselves a W-2 salary of $160,000
Employee deferral: $24,500
Employer contribution: 25% of $160,000 = $40,000
Subtotal: $64,500
You might be thinking, “Wait, where’s the $72,000?” That’s already far more than the 3% match you’d get as a full-time W-2 CRNA at the trauma center. But there’s one more tool: the mega backdoor Roth.
The gap between the $72,000 limit and $64,500 is $7,500. You can contribute that $7,500 as an after-tax contribution to your Solo 401(k), then convert it to the Roth side of the plan. So:
$24,500 employee deferral goes to the traditional side
$40,000 employer contribution goes to the traditional side
$7,500 goes to the after-tax side and is immediately converted to Roth
That’s how you reach the full $72,000.
The spouse
Now it gets even better. Say your spouse does administrative work for the business, or serves as VP or treasurer, and earns $33,000 a year through your LLC.
• Employee deferral: $24,500
• Employer contribution: The employer contribution percentage must be the same for both of you. With 25% for the CRNA, the spouse also gets 25% of $33,000 = $8,250
• Total: $32,750
Notice that $32,750 is just under the spouse’s $33,000 salary. That’s because there’s a second limit: you can’t contribute more to a Solo 401(k) than you earn. Each person’s cap is $72,000 or their earned income, whichever is less. For the spouse, $33,000 is the cap, so a salary around $33,000 happens to work out perfectly for maxing the employee deferral plus a 25% employer contribution.
The household total
Together, this CRNA and spouse contribute $104,750 a year to their Solo 401(k)s. About $7,500 of that is Roth, and roughly $97,000 is traditional. At a 30% to 40% tax rate, that’s $30,000 to $40,000 in tax savings every year, just from using this account.
The Catch: You Have to Actually Save It
This is $100,000 a year. It doesn’t come out of nowhere. You earn $300,000 or $400,000, pay yourself that $160,000 salary, cover your anesthesia business expenses, and take distributions on top. What’s left after taxes, expenses, and your cost of living is what you can actually save.
Most people don’t set aside enough to do this, which defeats the whole advantage. If you want the results we’re talking about, managing your cost of living is essential.
Why Starting Early Matters So Much
I started doing this in my late 20s and early 30s. Assuming a low-cost, passively managed index fund or target date fund, here’s roughly how each $100,000 contribution grows in inflation-adjusted buying power:
30-year horizon (age 30 or 35 to 60 or 65): about 5.5x. Each $100,000 becomes roughly $500,000 of today’s buying power, about the price of a median home in this country.
20-year horizon (starting at 40): about 3.5x. That’s the cost of waiting 10 years.
Starting in your 50s: roughly 1.6x to 2.1x. Call it 2x, so $100,000 a year becomes about $200,000 of buying power by 65.
Contribute $100,000 a year from 30 to 40 and you could have around $5 million of today’s buying power at 65 from your Solo 401(k) alone. The account balance will be much higher than that in future dollars.
Start early, go hard, and let compounding work for you. Set it, forget it, take the tax advantage today, and let it ride.
SECURE 2.0: The Roth Catch-Up Rule
One more note on catch-up contributions. Starting in 2026, if your prior-year FICA wages exceeded $150,000, your catch-up contributions must go in as Roth. You can’t take them pre-tax. It doesn’t change how much you can contribute, only which bucket it goes into. If this applies to you, make sure your plan accepts Roth contributions.
Here’s the nice caveat: the rule is based on W-2 wages. It applies if your LLC is taxed as an S-corp and pays you a salary. It does not apply to Schedule C sole proprietors, who can still make catch-up contributions pre-tax. That’s generally good for CRNAs, since your tax bracket is likely higher now than it will be in retirement. That’s debatable, but it’s a reasonable assumption.
Traditional vs. Roth Solo 401(k)
Most Solo 401(k) plans now allow both traditional and Roth contributions on the employee side, but not all of them, so read the plan documents before you open one.
Traditional contributions reduce your taxable income this year, a huge benefit at mid-six-figure incomes and above.
Roth contributions are taxed now and grow tax-free forever. Roth is especially powerful in your younger years or in low-income years. As a student, for example, you might convert old 401(k)s to Roth while your income is low. Just know the conversion shows up as income, which can affect things like Medicaid eligibility and your ability to borrow.
Converting traditional money to Roth is a smart move in low-income years, whether that’s as a student on the front end or after you step back from full-time work on the back end. Note that employer profit-sharing contributions are typically pre-tax, which isn’t a bad thing.
“Why Not Just Use a SEP IRA?”
I get this question a lot. The SEP IRA is what the 1099 crowd used for years. But the Solo 401(k) beats it in almost every way:
No employee bucket. A SEP IRA only allows employer contributions, up to 25% of compensation. The CRNA paying themselves $160,000 can put in only $40,000. They don’t get the $24,500 employee deferral on top. At typical CRNA compensation levels, that means a much lower effective limit.
No mega backdoor Roth. You can’t make the after-tax contributions that get you to $72,000.
The pro-rata problem. This is a big one if you do backdoor Roth IRA conversions, which my wife and I do every year as a hedge against future tax rates. The IRS treats all of your traditional IRA money, including a SEP IRA, as one big pot. When you convert your $7,500 traditional IRA contribution to Roth, your SEP IRA balance gets pulled into the calculation, and part of the conversion becomes taxable. It’s a total pain. A Solo 401(k) is a 401(k), not an IRA, so it doesn’t create this problem.
Skip the SEP and go with the Solo 401(k). It makes life easier in pretty much every way.
Other plans you’ll hear about
SIMPLE IRA: Not great for solo CRNAs. The 2026 employee limit is $17,000, or $21,000 with the age-50 catch-up, well below a SEP or Solo 401(k). It also requires employer matching or non-elective contributions and is built for small businesses with employees. Write it off.
Defined benefit plan: One way to contribute even more at high incomes, think mid-six figures and above. But these plans are complex, inflexible, more expensive, and require committed contributions years in advance. They may be worth exploring later, but for most 1099 CRNAs, including me, the Solo 401(k) is the right call.
How to Open a Solo 401(k)
Know the deadlines
Establish the plan by December 31 of the year you want to contribute. Coming out of school into a 1099 job? Set it up before year-end. Don’t wait until tax season; it doesn’t take long.
Employee deferrals should be made by December 31, since for an S-corp they’re withheld from that year’s paychecks. If you graduated mid-year, whether May, June, July, or even fall, you can still contribute the full $24,500 in just a couple of months if you have the cash, say from a sign-on bonus.
Employer contributions can generally be made up to your business’s tax filing deadline for that year, including extensions. That creates a nice double dip: in the spring, you can fund last year’s employer contribution and this year’s plan at the same time. Whatever I have left after paying my taxes goes straight into retirement accounts in the spring.
Pick a provider
Solo 401(k)s are available at the major brokerages like Fidelity and Charles Schwab, usually with no setup or annual fees because they want to hold your money. Features change often, so verify what each plan offers. Not all of them allow Roth or after-tax (mega backdoor) contributions, and I think it’s worth choosing one that does. Vanguard used to offer Solo 401(k)s but has moved away from them. There goes my consolidation.
A third-party provider generally gives you maximum flexibility. The one you’ll hear about most is My Solo 401k, which I use (not sponsored, just trying to make your life easier). They offer non-prototype plans with unparalleled flexibility. I told them I needed plans for myself and Mrs. TFC and wanted every feature. We each have three accounts: traditional, Roth, and after-tax.
They charge for that service, around $600 to set up and roughly $125 a year, one flat rate covering both of us. In return, they do most of the work: they send the documents, tell you where to sign, and answer your questions.
What you’ll need
An EIN (employer identification number). Apply free at irs.gov during business hours; it takes minutes. Services that charge for this are unnecessary.
Your business structure: sole proprietor, single-member LLC, or S-corp. They all qualify; just know which one you are.
The plan adoption agreement from your chosen provider. It’s long but not complicated. Confirm it allows Roth contributions.
Don’t forget Form 5500-EZ
Once your plan holds more than $250,000, you must file Form 5500-EZ with the IRS every year. It basically reports what’s in the account and what it earned. It’s a compliance requirement, so don’t skip it. You can do it yourself, your CPA can do it for a fee, or a provider like My Solo 401k will handle it. Just contact them early, not in the middle of tax season. Below $250,000, no annual filing is required.
W-2 CRNAs With Side Income Can Benefit Too
You don’t have to be a full-time 1099 operator to benefit. If you have any 1099 income, such as locum shifts, independent contracts, or medical director fees, you can open a Solo 401(k) for that income stream, separate from your W-2 job.
The key rule: the $24,500 employee deferral limit is shared across all your plans. If you max it at your day job, you can’t defer more in the Solo 401(k). If you defer less than $24,500 at work, you can make up the difference in the Solo 401(k).
The employer side is where the side income shines. Because your side business is unrelated to your W-2 employer, your Solo 401(k) can receive employer profit-sharing contributions on that income, up to 25% of your W-2 wages from it or about 20% of your net self-employment earnings. Even a few weeks of locum work can add a meaningful amount of tax-advantaged room.
Why This Matters
The whole thesis of this show is that a high income doesn’t guarantee wealth. The gap between what CRNAs earn and what they actually build is real, and a big part of it is a tax problem.
The Solo 401(k) is one of the most direct, high-leverage tools for closing that gap. Max it for 20 years at average market returns, and a meaningful share of your wealth will have been shielded from taxes during your highest-income years. Yes, you’ll likely owe significant tax on the back end because the account will be so large. But that’s a good problem.
This is how we buy back optionality. In the best case, you stop working before 65, start drawing from these accounts early, and have plenty of years before required minimum distributions kick in. You take the money out on your terms and pay the tax on your terms.
None of this works if you live paycheck to paycheck through your 30s, 40s, and 50s. You have to keep your cost of living trimmed, your income high enough, or both, to fund these contributions.
Is a Solo 401(k) Right for You? A Quick Checklist
Do you have 1099 income? If so, you should probably have one.
Are you using a SEP IRA and doing backdoor Roth conversions? You may have a pro-rata problem. Address it now. Rolling your SEP into a Solo 401(k) solves it, and a Solo 401(k) can also hold old 401(k)s from your nursing job and previous anesthesia jobs so everything is consolidated.
Have you established your plan for the current tax year? New grads and first-time 1099 CRNAs, the December 31 deadline is the one to remember.
Is your plan above $250,000? File Form 5500-EZ every year.
Are you 50 or older with prior-year FICA wages over $150,000? Your catch-up contributions must be Roth. Coordinate with your CPA and make sure your plan can handle them.
If you take one thing from this post, let it be this: the tax code is not neutral. It rewards people who understand the rules and who have the discretionary income to use them. The Solo 401(k) is the biggest asymmetric advantage available to a self-employed CRNA. Open one, max it, max it again next year, and thank yourself 20 years from now.
Share this with a CRNA colleague doing locum work who doesn’t know the Solo 401(k) exists, because they need it. Send your questions and topic requests through the site, and check out the free course, which covers all of this with visuals.
Next time, we’ll talk about something I wish every CRNA program would teach: the Moneymoon. It’s the simplest form of financial jet fuel available to each of us.
I’m a professional gas passer, not a CPA or attorney. This post is for education only and is not individualized financial, tax, or legal advice. Contribution limits shown are for 2026.
