Does Charles Schwab Offer a Self-Directed Solo 401(k)?

If you’re a self-employed business owner exploring retirement plan options, you’ve likely come across Charles Schwab. One of the most common questions we hear is:

“Does Schwab offer a self-directed Solo 401(k)?”

The short answer is yes—but with important limitations.

If you’re self-employed and searching for retirement plan options, Charles Schwab is almost certainly on your radar. They’re one of the largest financial institutions in the country, and yes — they do offer a solo 401(k). But when clients ask whether Schwab offers a self-directed solo 401(k), the answer requires a closer look.

In this guide, we’ll break down exactly what Schwab offers, what “self-directed” really means, and how it compares to a fully self-directed Solo 401(k).

What Is a Solo 401(k)?

A solo 401(k) — also called an individual 401(k), uni-K, or individual K — is a retirement plan built exclusively for self-employed individuals and owner-only businesses. It is available to sole proprietors, S-corps, C-corps, LLCs, and partnerships, provided the business has no full-time W-2 employees over age 21 who work 1,000 hours or more per year. Independent contractors don’t count against this threshold.

A Solo 401(k) (also called an Individual 401(k) or Solo-k) is designed for:

Self-employed individuals
Owner-only businesses
Businesses with no full-time W-2 employees (other than the owner and spouse)

This type of plan allows you to:

Make employee and employer contributions
Contribute as pre-tax, Roth, or voluntary after-tax (mega backdoor Roth)
Potentially maximize retirement savings significantly

A spouse who works in the same business can also participate in the same plan, and contributions can be made as pre-tax (traditional), Roth, or voluntary after-tax — or any combination of all three—effectively doubling contribution potential.

Watch: Complete breakdown of how Schwab’s Self-Directed 401k vs a Solo 401k form My Solo 401k Financial

Does Charles Schwab Offer a Solo 401(k)?

Schwab’s version, which they call their “Individual 401(k),” is a brokerage-based plan. It allows you to invest in stocks, ETFs, mutual funds, and bonds through Schwab’s trading platform. There are no setup fees, and it supports both pre-tax and Roth employee contributions. In that sense, Schwab does describe it as “self-directed” — because you’re choosing your own investments within their platform.

Yes—Charles Schwab offers what’s called an Individual 401(k).

Key Features of Schwab’s Solo 401(k):

No setup fee
Access to:
- Stocks
- ETFs
- Mutual funds
- Bonds
Supports:
- Pre-tax contributions
- Roth employee contributions
Simple and easy to open

At first glance, this may sound like a self-directed plan—and technically, it is… but only within a limited scope.

But this is where the nuance matters.

The Catch: It’s Not Fully Self-Directed

While Schwab allows you to choose your investments, it is not a fully self-directed Solo 401(k) in the broader sense.

Limitations of Schwab’s Plan:

No real estate investing
No private equity or private lending
No precious metals (physical)
No participant loan feature
No Mega Backdoor Roth capability
No voluntary after-tax contributions
No auto contribution credit

In other words, you’re limited to traditional brokerage investments only.

That auto contribution credit is worth highlighting. Through a properly structured self-directed solo 401(k), qualifying plan owners can claim $500 per year for three consecutive years — a total of $1,500 — via Form 8881, filed with their business tax return. It reduces business taxable income on a dollar-for-dollar basis. Schwab’s plan does not qualify for it.

What Does “Fully Self-Directed” Mean?

A true self-directed Solo 401(k) goes far beyond stocks and ETFs.

With a Fully Self-Directed Plan (like through MySolo401k Financial), you can:

Invest in:
- Real estate
- Private companies
- Crypto
- Notes & alternative assets
Use the Mega Backdoor Roth strategy
Take a participant loan (up to $50,000 or 50%)
Maintain checkbook control (you are the trustee)

This gives you maximum flexibility and control over your retirement funds.

Brokerage Solo 401(k) vs. True Self-Directed Solo 401(k)

Feature	Schwab Solo 401(k)	Self-Directed Solo 401(k)
Stocks / ETFs	✅	✅
Real Estate	❌	✅
Private Investments	❌	✅
Participant Loans	❌	✅
Mega Backdoor Roth	❌	✅
Checkbook Control	❌	✅

Full Side-by-side comparison

The Hybrid Strategy: Best of Both Worlds

Here’s the part most people don’t know: you don’t have to choose one or the other. You can have full self-directed capability and use Schwab’s platform — at the same time.

Here’s where it gets powerful.

When you establish a solo 401(k) through a dedicated self-directed plan provider, you get to choose where to hold your funds. That means you can open a company retirement brokerage account at Schwab — what Schwab calls a “non-prototype” account — to hold the funds for your self-directed plan. Schwab acts as the custodian-broker. You serve as the trustee, with full signing authority and exclusive access to the account.

With a provider like MySolo401k Financial, you can:

Establish a fully self-directed Solo 401(k)
Still use Charles Schwab as your brokerage platform

How it works:

MySolo401k Financial → provides the plan documents (full flexibility)
Schwab → holds the funds (custodian/broker)
You → act as trustee with full control

This gives you:

With this structure, you get Schwab’s trading platform for equities and the full flexibility of a self-directed plan for alternative investments, participant loans, the Mega Backdoor Roth strategy, and the auto contribution credit — all under one plan.

Schwab’s trading platform
PLUS full self-directed capabilities

When Is Schwab’s Solo 401(k) Enough?

A Schwab Solo 401(k) may be a good fit if:

You only want to invest in stocks, ETFs, and mutual funds
You prefer a simple, low-cost setup
You don’t need advanced features

When You Need More Than Schwab

You may want a fully self-directed Solo 401(k) if:

You want to invest in real estate or alternatives
You plan to use the Mega Backdoor Roth strategy
You want access to participant loans
You want maximum control over your retirement funds

Which option is right for you?

Final Takeaway

Charles Schwab does offer a solo 401(k) — and for straightforward equity investing, it’s a solid, low-cost option. But it is not a truly self-directed plan. If you want maximum flexibility, access to alternative investments, the Mega Backdoor Roth, participant loans, and the SECURE Act tax credit, you’ll need a plan established through a dedicated self-directed provider. The good news: you can still use Schwab to hold the funds — giving you the best of both worlds.

Charles Schwab does offer a Solo 401(k)—but only in a limited, brokerage-based format.

If your needs are simple, it’s a solid option.
If you want true flexibility and advanced strategies, you’ll need a fully self-directed Solo 401(k).

The good news?
You don’t have to choose one or the other.