Retirement Accounts for The Self Employed (Part 5 of 5) – What Is The Best Plan For You?

Independent’s Week is officially over!  I hope all of the self employed people out there enjoyed my detailed blog entries about the differences between all of your options for retirement plans.  In the chart below I summarize your options, key details and the pros and cons of each plan.  Enjoy.


For the rest of this series:


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5 Responses to “Retirement Accounts for The Self Employed (Part 5 of 5) – What Is The Best Plan For You?”

  1. Miranda Says:

    This is a handy chart. Very informative. I’ve shared it with my readers at

    Could I get permission to include the graphic in my post?

  2. Simon Says:

    I am self-employed and have already contributed roughly the maximum I can to an individual 401(k) for 2007. Can I contribute even more by paying an additional 20% into a SEP IRA? (I am maxed out on my personal Traditional and Roth IRA’s for this year.)

  3. James Burns, Esq. Says:

    While putting something away for retirement is essential, especially given the uncertain financial seas ahead, I am leary of the inevitable tax brackets that our new president will undoubtedly have to create. I’m often asked the difference between qualified and non-qualified plans and I think it is important to explain it by example since most tax preparers look at the pretax dollar aspect of a qualified plan. My mantra is “it is better to be taxed on the seed rather than the harvest” which runs contrary to the conventional tax preparer way of thinking. Just ask yourself this question – does it make sense to defer taxes now to an inevitable higher bracket?

  4. Anonymous Says:

    Your chart is misleading. The Solo 401K is not restricted to sole proprietorships only. Furthermore, the 25% contribution limit in your footnote is also wrong: that only applies to incorporated business. The limit for sole proprietorship is 20%.

  5. Nicole McInerney Says:

    Anonymous makes a couple good points. The limit for an UNINCORPORATED business is 20% of net income for INCORPORATED it is 25% of compensation. Also it is not restricted to sole proprietorships it is appropriate for corporations, partnerships, sole proprietors and nonprofit entities run solely by one or more owners and their spouses.

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