JP Morgan Asset Management Adds Solo 401(k) to Product Set

J.P. Morgan Asset Management launched today its Solo 401(k) retirement solution for solo entrepreneurs and self-employed individuals with no full-time employees.

The product serves as an expansion of the provider’s Everyday 401(k), a retirement solution for small business owners. Solo 401(k) participants can set up their account online using J.P. Morgan Asset Management’s ready-to-use solutions or customized plans. Vestwell will continue to be the recordkeeper for Everyday 401(k) through the expansion.

According to J.P. Morgan, Solo 401(k) participants can add their spouse to their plan if the spouse is also employed by the business. In addition, small business owners can save up to $70,000 annually (or more, if they are age 50 or older) and an additional $70,000 for their spouse, if the spouse is employed by the business. The business owner can contribute $23,500 as their self-deferred contribution, and the remaining balance can be made by the employer making an employer contribution to themself. Individuals can benefit from higher contribution limits by saving both employer and employee contributions and from tax advantages, including pre-tax and Roth contributions and tax-deferred growth.

One day before J.P. Morgan announced its Solo 401(k) accounts, Cerulli Associates shared that it anticipates small and micro 401(k) plan segments, defined by $5 million or less in assets and between $5 and $25 million in assets, respectively, will expand rapidly over the next several years due to incentives provided by the SECURE 2.0 Act of 2022 and due to state mandates to increase the number of individuals covered by some form of retirement savings vehicle. According to Cerulli’s research, by 2029, 92% of all 401(k) plans will be in the micro plan segment, representing a nearly 40% increase in micro plans from 2022.

Additionally, according to a recent JPMorgan Chase & Co. survey, 80% of business owners reported contributing to retirement accounts, with 35% stating a preference for overall individual 401(k) options. However, only 44% of business owners reported satisfaction with their contributions and wish to increase them.

“Today’s economy is powered by self-starters—consultants, creators, contractors—who have redefined what it means to work,” said John McCourt, Chase’s head of client relationships, in a statement. “Solo 401(k), our new retirement solution for small business owners, provides a flexible way to save for the future while growing their business, wherever they may be in their retirement planning journey.”

J.P. Morgan Asset Management had $3.8 trillion in assets under management as of June 30, serving millions of defined contribution plan participants. JPMorgan Chase & Co. had $4.6 trillion in assets and $357 billion in stockholders’ equity as of June 30.