Retirement Planning for Self-Employed: Complete Guide (2026)

Quick Answer

SEP-IRA and Solo 401(k) are the best retirement options for freelancers, allowing contributions up to $69,000 in 2024. Start with 15-20% of income and increase annually. No employer match means you must be disciplined about saving.

Key Takeaways

SEP-IRA: Up to 25% of net earnings, max $69,000
Solo 401(k): Up to $69,000 ($76,500 if 50+)
Traditional/Roth IRA: $7,000 ($8,000 if 50+)
Start immediately: Compound interest needs time
Automate contributions: Monthly deposits beat annual lump sums

Retirement Account Comparison

Feature	SEP-IRA	Solo 401(k)	Traditional IRA
Max contribution	$69,000	$69,000	$7,000
Contribution type	Employer only	Employee + Employer	Individual
Setup complexity	Easy	Moderate	Easy
Loan option	No	Yes	No
Catch-up (50+)	No	$7,500	$1,000
Best for	High earners	Variable income	Everyone

SEP-IRA: Best for Consistent High Earners

Contribution formula: 25% of net self-employment income (after deducting half of SE tax)

Example: $120,000 net income

Contribution: $120,000 × 25% = $30,000
Tax savings (24% bracket): $7,200

Pros:

Easy to set up (15 minutes)
No annual filing
High contribution limits

Cons:

Only employer contributions
No loans
Must contribute same % for all employees

Solo 401(k): Best for Variable Income

Contribution structure:

Employee contribution: Up to $23,000 ($30,500 if 50+)
Employer contribution: Up to 25% of net earnings
Total max: $69,000 ($76,500 if 50+)

Example: $100,000 net income

Employee: $23,000
Employer: $25,000
Total: $48,000

Pros:

Higher effective contribution at lower income
Loan option available
Roth option available

Cons:

More paperwork
Annual filing required over $250K

How Much to Save

Age	Recommended %	On $100K Income
20s	15-20%	$15,000-20,000
30s	20-25%	$20,000-25,000
40s	25-30%	$25,000-30,000
50s	30-35%	$30,000-35,000

FAQ

Can I have both SEP-IRA and Solo 401(k)?

Yes, but combined contributions can’t exceed $69,000.

When is the contribution deadline?

April 15 (or October 15 with extension) for prior tax year.

What if I have employees?

SEP-IRA requires equal % for all employees. Solo 401(k) gets complicated—consult a CPA.

Last updated: March 2026