When you’re self-employed, saving for retirement is entirely up to you—there’s no employer-sponsored 401(k) plan you can rely on. This can make planning for retirement more challenging, but there are several retirement account options available specifically for the self-employed. You’ll still want to take full advantage of tax-advantaged retirement accounts—these allow your money to grow tax-deferred until retirement age, when you’ll likely be in a lower tax bracket.


The Simplified Employee Pension (SEP) IRA is one of the simplest small business retirement plans to establish and maintain. With a SEP IRA, the employer can make substantial contributions for themselves and any eligible employees. There is little administrative work required, and no special tax filing is needed. Employers have flexibility to vary the contribution amounts from year to year, skip years, or make contributions one year and never again.

The plan allows you to contribute up to 25% of your net self-employment earnings each year, with a maximum contribution of $69,000 for 2024 (up from $66,000 in 2023). SEP IRAs are easy to open at most financial institutions and have low fees and administrative costs.

Now, if you’re self-employed and haven’t heard of a SEP IRA, it’s probably because they’re most advantageous for someone who employs others along with themself. With a SEP IRA, the contributions are not funded by the employees (like how a 401(k) works). Instead, a SEP IRA is funded by the employer. What’s more, employers who contribute to their own account must make contributions to eligible employee accounts.


The Savings Incentive Match Plan for Employees (SIMPLE) IRA works well if you have employees, as it allows them to contribute as well. The IRS describes it as ideally suited as a “start-up retirement savings plan” for small employers not currently sponsoring a retirement plan. If you’re running a small business with fewer than 100 employees, the lower startup costs and ease of setup are why you might opt for a SIMPLE IRA over a 401(k).

Solo 401(k)

If you run a business with no employees, a solo 401(k) might be the move for you. As the employer and (your own) employee, you’re allowed to contribute $69,000 in 2024, or $76,500 for those ages 50 and above. Compared to the options above, a solo 401(k) requires some higher administrative work upfront, but brings you much higher contribution limits.

Traditional or Roth IRA

Now, back to basics. Most self-employed individuals investing in their retirement will opt for a Roth or Traditional IRA. While contribution limits are lower than SEP IRAs and solo 401(k)s, an IRA is the go-to personal retirement account you open yourself.

There are two main types of IRAs: Traditional and Roth. In the simplest terms, with Roth IRAs, you pay taxes on your savings now. With traditional IRAs, you pay taxes later. We’ve written about the differences in more detail here, and I generally lean pro-Roth over traditional.

There is no limit to the number of traditional individual retirement accounts, or IRAs, you can establish. However, if you establish multiple IRAs, you cannot contribute more than the contribution limits across all your accounts in a given year. The limit on annual contributions to an IRA will be $7,000 in 2024, up from $6,500 in 2023. You can and should max out those limits, if possible.

If you or your spouse aren’t receiving taxable income, one of you might consider setting up a spousal IRA. This way, you don’t have to miss out on tax-deferred growth and retirement assets in your name just because you aren’t in the traditional workforce.

The bottom line: Save early and consistently

Whatever your employment status, here’s my guide to all the different retirement accounts you can take advantage of. And whichever account is right for you, the key is to start saving early and contribute consistently each year. Maximize your contributions when possible and invest appropriately for growth over the long-term. With disciplined saving over many years, those contributions can potentially grow into a sizable sum.

Additionally, review your retirement needs periodically and make adjustments to your savings rate if necessary. The earlier you start saving for retirement when self-employed, the better positioned you’ll be down the road.