Self-employed workers don’t get employer 401(k) matches, but they get access to some of the best retirement plans available — with contribution limits far higher than a regular IRA.
Quick answer: The Solo 401(k) is best for most self-employed people — up to $70,000/year in contributions with Roth option. A SEP IRA is simpler if you just want easy setup. Use a Roth IRA alongside either plan for tax-free retirement income.
Self-Employed Retirement Plans Compared (2026)
Plan
Max Contribution
Employee + Employer
Roth Option
Best For
Solo 401(k)
$70,000 ($77,500 if 50+)
Yes
Yes
Most self-employed
SEP IRA
$70,000
Employer only
No
Simple setup, high income
SIMPLE IRA
$16,500 ($20,000 if 50+)
Yes
Yes (2026+)
Self-employed with employees
Roth IRA
$7,000 ($8,000 if 50+)
N/A
Yes
Everyone (as supplement)
Traditional IRA
$7,000 ($8,000 if 50+)
N/A
No
Low income, tax deduction
How Much You Can Contribute by Income
Net Self-Employment Income
Solo 401(k) Max
SEP IRA Max
Difference
$50,000
$33,077
$9,577
Solo saves $23,500 more
$75,000
$37,346
$13,846
Solo saves $23,500 more
$100,000
$42,131
$18,631
Solo saves $23,500 more
$150,000
$51,386
$27,886
Solo saves $23,500 more
$200,000
$60,192
$36,692
Solo saves $23,500 more
$290,000+
$70,000
$70,000
Same at cap
Solo 401(k) includes $23,500 employee contribution + 20% employer contribution. SEP IRA is 20% only.
Solo 401(k) Deep Dive
Feature
Details
Eligibility
Self-employed, no employees (except spouse)
Employee contribution
$23,500 (2026)
Employer contribution
20% of net self-employment income
Total max
$70,000 ($77,500 if age 50+)
Roth option
Yes
Loan provision
Yes (up to $50,000)
Setup deadline
December 31 of tax year
Contribution deadline
Tax filing deadline (April 15 or with extension)
Where to open
Fidelity, Schwab, Vanguard (free)
SEP IRA Deep Dive
Feature
Details
Eligibility
Any self-employed individual
Contribution
Up to 25% of compensation (20% of net SE income)
Total max
$70,000 (2026)
Roth option
No
Complexity
Very low — no annual filing
Setup deadline
Tax filing deadline (including extensions)
Contribution deadline
Tax filing deadline (including extensions)
Where to open
Any brokerage (5 minutes)
Important note
Must contribute same % for all employees
Solo 401(k) vs SEP IRA
Factor
Solo 401(k)
SEP IRA
Max contribution at $100K income
$42,131
$18,631
Roth contributions
Yes
No
Loan provision
Yes
No
Setup complexity
Moderate
Very easy
Annual filing (Form 5500-EZ)
Required if over $250K
Not required
Employees allowed
No (except spouse)
Yes
Catch-up contributions (50+)
$7,500 extra
None
Tax Savings by Plan
Income
No Retirement Plan Tax
With Solo 401(k) Tax
Annual Tax Savings
$75,000
$15,600
$7,200
$8,400
$100,000
$22,800
$12,800
$10,000
$150,000
$35,400
$22,200
$13,200
$200,000
$48,600
$33,400
$15,200
Approximate savings from maxing Solo 401(k). Includes income tax and self-employment tax reductions.
Where to Open Each Account
Provider
Solo 401(k)
SEP IRA
Fees
Fidelity
Yes (Roth)
Yes
$0
Charles Schwab
Yes (Roth)
Yes
$0
Vanguard
Yes
Yes
$0 (most funds)
E*TRADE
Yes (Roth)
Yes
$0
TD Ameritrade
Yes
Yes
$0
Optimal Strategy by Income
Net SE Income
Recommended Plan
Why
Under $20,000
Roth IRA only
Simple, tax-free growth
$20K–$50K
Roth IRA + SEP IRA
Easy setup, decent contribution room
$50K–$100K
Solo 401(k) + Roth IRA
Maximize employee contributions
$100K–$250K
Solo 401(k) (max it) + Roth IRA
$42K–$70K in tax-advantaged space
Over $250K
Solo 401(k) + backdoor Roth
Max all available tax-advantaged accounts
Bottom Line
If you’re self-employed, the Solo 401(k) is almost always the best choice. It offers the highest contribution limits, Roth options, and loan access. A SEP IRA is a good alternative if you want the simplest possible setup or if you have employees. Either way, you should be contributing to some retirement plan — the tax savings alone make it worth it.