Solo 401(k) for NIL Athletes

Jesstine Kemper |

What Is a Solo 401(k)?

A Solo 401(k) is a retirement account specifically designed for self-employed individuals with no W-2 employees. As a NIL athlete — whether you've signed one deal or a dozen — you are self-employed in the eyes of the IRS. That means you qualify.

This account lets you contribute as both the employee (you, the athlete) and the employer (your LLC), which is why the contribution limits are so dramatically higher than a standard IRA.

Who Qualifies?

If you've earned any NIL income through self-employment, you qualify. There's no minimum income threshold. You need:

  • Self-employment income (any NIL deal counts)
  • No full-time W-2 employees (you can have contract workers)
  • An LLC or business structure (which you should have anyway)

The Numbers: $72,000 Per Year (as of 2026)

This is where the Solo 401(k) separates itself from every other account available to young athletes.

  • Employee contribution: Up to $24,500 per year
  • Employer contribution: Up to 25% of your net W2 self-employment income
  • Combined maximum: $72,000 per year

For context, a standard Roth IRA maxes out at $7,500 and there are income limits to contributing. 

Roth or Traditional? Your Choice.

The Solo 401(k) gives you the option to choose:

Traditional Solo 401(k): Your contributions reduce your taxable income today. You pay taxes on withdrawals in retirement. Best if your tax rate is higher now than it will be later.

Roth Solo 401(k): You contribute after-tax money, and your growth is 100% tax-free forever. Best for young athletes who expect their income — and tax rate — to rise over time.

For most NIL athletes, the Roth option wins. Your 20s are likely your lowest tax bracket years. Paying taxes now and letting everything grow tax-free for 40 years is a powerful long-term advantage.

The Tax Deduction Benefit

If you go the Traditional route, every dollar you contribute directly reduces your taxable income. A $24,500 employee contribution plus a $20,000 employer contribution means $44,500 less of income the IRS can tax this year. For athletes in a meaningful income year, this can dramatically reduce their tax bill.

The Loan Feature

One unique feature of the Solo 401(k): you can borrow up to 50% of your account balance (maximum $50,000) and repay yourself with interest. This gives you access to capital without penalties or taxes — something no IRA allows.

One Key Rule: No W-2 Employees

The Solo 401(k) is for one-person businesses. The moment you hire a full-time W-2 employee, you lose eligibility. For most college athletes, this isn't an issue. 

Open One Before December 31st

The Solo 401(k) must be established by December 31st of the tax year you want to make contributions for. You can fund it up until your tax filing deadline, but the account itself has to be open. Don't wait until April.

The Bottom Line

$72,000 per year in tax-advantaged retirement savings, with a Roth option, loan access, and eligibility from your very first NIL deal. There is no better retirement account available to self-employed athletes.

IroncladNIL sets up your Solo 401(k) — book a free call → www.ironcladnil.com 

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Investment advisory services offered through Mutual Advisors LLC DBA IroncladNIL, an SEC registered investment adviser. Securities offered through Mutual Securities, Inc., Member FINRA/SIPC. Mutual Securities, Inc. and Mutual Advisors, LLC are affiliated companies. IroncladNIL, nor any of its members, are tax accountants or legal attorneys, and do not provide tax or legal advice. For advice tailored to your situation, please consult your tax or legal professional.