Self-employed retirement savings

As a self-employed individual, you have some of the most flexible and high-limit retirement planning tools available—especially if you don't have employees (or only employ your spouse).citizensbank.com+1

Review the top self-employed retirement savings options detailed on the IRS Retirement Plans Guide:

• Solo 401(k) (Individual 401(k))
  • Best for: Sole proprietors, freelancers, and small business owners with no employees (except a spouse).
  • How it works: You contribute as both the "employee" and the "employer".
  • 2026 Limits: Employee salary deferral up to $24,500, plus employer profit-sharing up to 25% of net self-employment earnings. Total combined limit is $72,000 (plus catch-up contributions if you are 50+).
  • Perks: Offers both pre-tax and Roth options , and allows for participant loans.empower.com+2
• SEP IRA (Simplified Employee Pension)
  • Best for: Self-employed people who want minimal paperwork and easy setup, whether they are solo or have a small team.
  • How it works: Funded strictly by employer contributions. If you have employees, you must contribute the same percentage of compensation for them as you do for yourself.
  • 2026 Limits: Up to 25% of net earnings from self-employment, capped at $72,000.
  • Perks: Extremely low maintenance, and you have until your tax filing deadline (including extensions) to fund it for the previous year.docs.rbcwealthmanagement.com+1
• SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Best for: Small business owners with under 100 employees who want a low-cost plan with mandatory staff contributions.
  • How it works: Employees make salary-reduction contributions, and the employer must either match up to 3% or make a non-elective 2% contribution for eligible workers.
  • 2026 Limits: Employee deferral limit is $17,000 (plus catch-up contributions for older adults).
  • Perks: Simpler and cheaper to run than a full group 401(k).citizensbank.com
• Defined Benefit Plan
  • Best for: High-earning self-employed individuals (usually age 50+) who want to shield massive amounts of income from taxes.
  • How it works: Acts like a traditional corporate pension. You calculate a specific payout you want to receive in retirement, and then you work backward to figure out how much you must contribute annually to fund it.
  • 2026 Limits: Contribution amounts can be significantly higher than $72,000, determined actuarially based on your age and target payout.
  • Perks: Huge tax deductions, though it requires high administrative costs and mandatory annual funding obligations.irs.gov+2
• Traditional or Roth IRA
  • Best for: A straightforward baseline or a supplement to one of the plans above.
  • 2026 Limits: Contribution limits cap at $7,500 (plus an extra amount if you are 50+).citizensbank.com

To help me narrow down the absolute best choice for your business, tell me:

• Do you have any employees (other than yourself or a spouse)?
• What is your approximate net self-employment income?
• Are you looking to minimize paperwork or maximize tax savings?

If you're self-employed, you have some excellent retirement savings options — and in many cases, you can contribute substantially more than someone who only has a traditional workplace 401(k).

The best choice depends on how much you earn, whether you have employees, how consistently you can save, and whether you want to reduce your taxes today or build tax-free retirement income for later.

For most self-employed people, I'd start by comparing a Solo 401(k), SEP IRA, and SIMPLE IRA, while also considering a Roth IRA.

The best retirement plans for self-employed people

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1. Solo 401(k) — best for many solo business owners

(Best overall for many solo owners)

Ideal if you work for yourself and have no employees other than a spouse.

• High contribution potential: for 2026, the employee contribution limit is $24,500, plus eligible employer contributions. The combined standard limit is $72,000 before eligible catch-up contributions.
• Tax flexibility: traditional pretax contributions can lower current taxable income; some plans also allow Roth contributions.
• Potentially efficient at moderate income: you can contribute as both employee and employer.

Watch out: contributions depend on your self-employment earnings, and setup and reporting rules apply. If you hire eligible employees, the plan generally must cover them too.www.irs.gov+1

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2. SEP IRA — best for simplicity

Ideal if you want an easy-to-administer plan, especially when your income varies from year to year.

• Employer contributions only; you don't make separate employee salary-deferral contributions.
• Contributions can reach the lesser of 25% of eligible compensation or $72,000 for 2026, subject to the special calculation for self-employed people.
• Generally low administrative burden, with no annual employer filing requirement for a standard SEP.

Watch out: if you have eligible employees, you generally must contribute the same percentage of compensation for them as for yourself. SEP contributions also go into traditional IRA accounts by default, which can complicate backdoor Roth IRA strategies.www.irs.gov+2

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3. SIMPLE IRA — best for a small business with employees

Ideal if you run a small business and want a relatively straightforward workplace retirement plan.

• Employees can contribute through payroll.
• Employers generally must provide a matching or nonelective contribution under the plan rules.
• The standard employee contribution limit for 2026 is $17,000, with higher limits available for certain plans and eligible catch-up contributions.

Watch out: employer contributions are generally required, and the plan has more restrictions than a Solo 401(k).www.irs.gov+2

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4. Roth IRA — best for tax-free retirement withdrawals

Ideal as a supplement to a self-employed retirement plan, especially if you're early in your career or expect your tax rate to rise.

• Contribute up to $7,500 in 2026, or $8,600 if you're 50 or older.
• Contributions are made with after-tax money.
• Qualified withdrawals in retirement are tax-free.

Watch out: eligibility depends on income and filing status. A Roth IRA alone may not offer enough contribution room if you're trying to save aggressively.www.irs.gov

Quick comparison

For official rules and current limits, see the IRS guides to one-participant 401(k) plans, SEP IRAs, and 2026 contribution limits.

Which would I choose in your situation?

My starting recommendation would be:

• You work alone and earn a steady income: compare a Solo 401(k) with a SEP IRA.
• You want to save as much as possible while reducing taxes now: investigate a traditional Solo 401(k).
• You earn less today but expect to earn more later: consider Roth contributions or a Roth IRA, if eligible.
• You have employees: compare a SIMPLE IRA, SEP IRA, and a traditional small-business 401(k) before choosing.
• You earn a high income and want to save substantially more than standard plan limits: a defined-benefit or cash-balance pension plan may be worth exploring.

One important point: you don't necessarily have to choose between a workplace-style retirement plan and a Roth IRA. You may be able to use both, subject to the applicable rules.

Let me narrow this down for you

I can suggest the best fit based on your actual circumstances. Three things matter most:

1. How is your business structured?

Self-employed, no employees

I work with my spouse

I have employees

I operate through an S corporation

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2. What is your approximate annual income before personal income taxes?

Under $50,000

$50,000–$100,000

$100,000–$200,000

$200,000+

If you own an S corporation, use your approximate salary plus business profit as context; the rules for calculating contributions differ.

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3. What is your main goal?

Reduce my taxes now

Get tax-free withdrawals in retirement

Balance tax savings now and later

Maximize how much I can save

Your age (optional)

Under 35

35–49

50–59

60 or older

[Find my best retirement plan]

This is general U.S. retirement-planning information. The right choice can also depend on your filing status, other retirement accounts, and whether you have already established a plan for the 2026 tax year.

As a self-employed individual, you have access to some of the most powerful retirement savings tools available. Because you are both the "employee" and the "employer," you can often stash away significantly more money—and get a bigger tax break—than traditional corporate employees.

The primary options tailored for self-employed workers include:

• Solo 401(k) (also known as an Individual or One-Participant 401(k)): Best overall if you have no employees (or only employ a spouse). You can contribute from two angles: as the employee (up to $24,500 in elective deferrals for 2026, plus catch-up contributions if you are 50+) and as the employer (up to 25% of your net self-employment earnings). Total combined contributions can reach up to $72,000 for 2026. It offers immense flexibility, high limits, and Roth options. Learn more at the IRS One-Participant 401(k) Guide.irs.gov+2
• SEP IRA (Simplified Employee Pension): Great if you want minimal paperwork and maximum flexibility. You don’t have to contribute every year, which is ideal if your income fluctuates. As the employer, you can contribute up to 25% of your net earnings from self-employment, capped at $72,000 for 2026. Note: If you have employees, you must contribute the exact same percentage of compensation for them as you do for yourself. Review the rules via the IRS SEP Plan Overview.irs.gov+2
• SIMPLE IRA (Savings Incentive Match Plan for Employees): Designed for small businesses and sole proprietors with a modest number of employees. Employees can make salary-reduction contributions up to $17,000 in 2026, and the employer is required to make matching or non-elective contributions. It’s easier to run than a standard corporate 401(k) but has lower contribution caps than a Solo 401(k) or SEP IRA.irs.gov+3
• Traditional or Roth IRA : A baseline option available to anyone with earned income. For 2026, you can contribute up to $7,500 (plus an extra $1,100 if you're 50 or older). While the limits are lower, they are simple to open and maintain independently of your business structure. Check details on the IRS IRA Contribution Limits Page.irs.gov+1

To help me narrow down which plan fits your business best, let me know:

• Do you have any employees other than yourself (or a spouse)?
• Is your business set up as a sole proprietorship, LLC, S-Corp, or C-Corp?
• Roughly how much are you looking to save or set aside annually?

If you work for yourself, you have several good ways to save for retirement—even if you don't have employees, don't earn the same amount every month, or are just getting started.

Assuming you're in the United States, the main options are a SEP IRA, a Solo 401(k), a SIMPLE IRA, and a traditional or Roth IRA. The right choice depends on how much you earn, how much you want to save, whether you have employees, and how much administrative work you're comfortable with.

The main retirement plans for self-employed people

• 

1. SEP IRA

(Simple to administer)

Best for: Freelancers and self-employed people who want flexibility.

• Your business makes contributions; you don't make employee salary-deferral contributions.
• Contributions can vary from year to year, including zero in a lean year.
• The 2026 maximum is generally the lesser of 25% of eligible compensation or $72,000. Your self-employed contribution calculation uses special rules.www.irs.gov+1

Trade-off: If you have eligible employees, you generally must contribute for them at the same percentage of compensation as for yourself.

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2. Solo 401(k)

(Often best for maximizing savings)

Best for: A business owner with no eligible employees other than a spouse.

• You contribute as both the employee and employer.
• The 2026 employee contribution limit is $24,500, plus eligible catch-up contributions if you're older. Employer contributions can increase your total.
• Total contributions are generally capped at $72,000 before catch-up contributions in 2026.www.irs.gov+1

Trade-off: More paperwork and plan administration than a typical IRA. A filing is generally required once plan assets reach $250,000 at year-end.

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3. SIMPLE IRA

Best for: Small businesses with employees that want a relatively straightforward workplace plan.

• The standard 2026 employee contribution limit is $17,000, with additional catch-up contributions for eligible older workers.
• The employer generally must match employee contributions up to 3% of compensation or contribute 2% for each eligible employee, subject to plan rules.www.irs.gov+1

Trade-off: You generally must make employer contributions, and the plan has lower contribution limits than some alternatives.

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4. Traditional IRA or Roth IRA

Best for: Getting started with a smaller amount or supplementing another retirement plan.

• The combined contribution limit across traditional and Roth IRAs is $7,500 for 2026, or $8,600 if you're age 50 or older, limited to eligible compensation.
• Traditional IRA: Contributions may be tax-deductible, depending on your income and circumstances.
• Roth IRA: Contributions are made with after-tax money; qualified withdrawals in retirement are tax-free. Income limits apply.www.irs.gov+2

Trade-off: Lower contribution limits than a Solo 401(k) or SEP IRA.

Which plan might be right for you?

These are starting points, not universal rules. Your income, tax situation, business structure, and employees can change which plan is most advantageous.

Tax treatment: pay taxes now or later?

One important decision is whether to prioritize tax savings today or potentially tax-free withdrawals later.

• Pre-tax savings: Traditional IRAs and many SEP and Solo 401(k) contributions can reduce current taxable income, if eligible. Withdrawals are generally taxable.
• Roth savings: You pay tax on contributions now, but qualified withdrawals—including investment growth—are tax-free.
• Investment choices: Whichever account you choose, the money typically needs to be invested in assets such as diversified mutual funds or ETFs to pursue long-term growth; simply opening the account isn't enough.

Official starting points: IRS retirement plans for self-employed people and IRS 2026 contribution limits.

Let's narrow it down to your situation

I can help you compare the options more specifically. Two details make a big difference: whether you have employees and roughly how much profit your business earns.

1. Do you have any employees?

No, just me

Just me and possibly my spouse

Yes, I have employees

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2. What's your approximate annual business profit?

Rough profit after business expenses, before your personal income taxes.

Under $30,000

$30,000–$50,000

$50,000–$100,000

$100,000+

It varies a lot / not sure

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3. How old are you?

Under 35

35–49

50–59

60 or older

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4. What's your biggest priority?

Save as much as possible

Reduce my taxes now

Build tax-free retirement savings

Keep it simple and low-cost

[Compare my options]