Fidelity’s New Roth 401(k) Opens Bigger Doors for Small Business Savings
Alright, let’s talk about a new development in the world of retirement savings—something that could make a real difference for self-employed individuals and very small business owners. Fidelity has just introduced a new option called the Roth Self-Employed 401(k) , and it’s designed specifically for people who don’t have traditional workplace retirement plans to lean on.
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So here’s what’s happening. Until now, Fidelity has offered a traditional Self-Employed 401(k), which has been around since 2003. It allowed small business owners—especially those without employees—to save aggressively through a mix of employee deferrals and employer contributions. But everything was structured pre-tax. Now, Fidelity is expanding that plan by adding a Roth option, giving these business owners a chance to make after-tax, salary-deferred contributions within the same setup.
This is actually arriving at a perfect moment. Starting in 2026, a SECURE 2.0 rule will require certain high-earning individuals—those making more than $145,000 in W-2 income for 2025—to make all their catch-up contributions on a Roth basis. And because Roth contributions are made with after-tax dollars, it gives savers more clarity about what their retirement balance will look like later on. The taxes are already taken care of upfront, so the withdrawals down the road can be tax-free if the rules are met.
Research from Fidelity has also shown that Roth options are gaining popularity, mainly because people are seeing the long-term tax advantages. For self-employed individuals, this is especially useful. They often juggle the full weight of running a business while also worrying about securing their future—without the benefit of a built-in company retirement plan. According to Fidelity’s Roger Morrisette, having a Roth option tucked inside a Self-Employed 401(k) can give these business owners more predictability and peace of mind.
What’s helpful here is that this new Roth Self-Employed 401(k) isn’t replacing anything. It’s simply becoming part of Fidelity’s broader lineup of small business retirement solutions, which already includes things like SEP IRAs, SIMPLE IRAs, and their Pooled Employer Plan, the Fidelity Advantage 401(k). In other words, owners now have another tool in the toolbox depending on their income, goals, and tax strategy.
With Fidelity managing more than $17 trillion in assets and serving millions of individuals and businesses, this launch folds into their long-standing focus on boosting Americans’ financial well-being. And for self-employed people looking for more flexible, tax-smart ways to save, this new offering could be an important step forward.
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