Self-Employed Retirement Plan Playbook

2025 OVERVIEW

Executive Summary

This brief outlines retirement plan options for self-employed individuals, comparing key features, contribution limits, and strategic considerations for optimal selection.

Key Options at a Glance

SOLO 401(k)

• Maximum Contribution: $69,000 ($76,500 if age 50+)

• Best For: High-income self-employed individuals with no employees

• Key Advantage: Highest potential contribution limits

• Key Consideration: More complex administration

SEP IRA

• Maximum Annual Contribution: $69,000

• Best For: Self-employed seeking simplicity with high contribution limits

• Key Advantage: Easy administration

• Key Consideration: Must contribute equally for any employees

SIMPLE IRA

• Maximum Annual Contribution: $16,000 ($19,500 if age 50+)

• Best For: Businesses with few employees

• Key Advantage: Lower administrative burden

• Key Consideration: Mandatory employer contributions

TRADITIONAL/ROTH IRA

• Maximum Contribution: $7,000 ($8,000 if age 50+)

• Best For: Supplemental retirement savings

• Key Advantage: Can be used alongside other plans

• Key Consideration: Lower contribution limits

Strategic Selection Matrix

IF YOU NEED...	CONSIDER
Maximum Contributions	Solo 401(k)
Simple Administration	SEP IRA
Employee Coverage	SIMPLE IRA
Tax Flexibility	Roth IRA + Another Plan

RISK FACTORS

1. Administrative Risk

   1. Solo 401(k): High

   2. SEP IRA: Low

   3. SIMPLE IRA: Medium

   4. Traditional/Roth IRA: Low

2. Compliance Risk

   1. Solo 401(k): High (Form 5500 required over $250,000)

   2. Others: Low

IMPLEMENTATION TIMELINE

1. Solo 401(k): Establish by December 31st of tax year

2. SEP IRA: Can set up until tax filing deadline

3. SIMPLE IRA: Set up by October 1st for existing businesses

4. Traditional/Roth IRA: Contribute until tax filing deadline

RECOMMENDATIONS

1. High-Income Solo Operators:

   1. Primary: Solo 401(k)

   2. Secondary: SEP IRA

2. Growing Businesses:

   1. Primary: SIMPLE IRA

   2. Secondary: SEP IRA

3. Variable Income:

   1. Primary: SEP IRA

   2. Secondary: Traditional IRA

4. Tax Diversification:

   1. Primary: Solo 401(k) with Roth option

   2. Secondary: Roth IRA