If you’re self-employed, there are five main retirement plans you can choose from:
A traditional or Roth IRA: These plans come with $6,000 yearly contribution limits, though you can add catch-up contributions if you’re over the age of 50. Traditional IRAs are funded with pre-tax money, while Roth IRAs are funded with after-tax funds.
A solo 401(k): A solo 401(k) is a great option for freelancers and contractors. These plans come with a $57,000 yearly contribution limit and are funded with pre-tax money.
A SIMPLE IRA: A SIMPLE IRA allows you to contribute to your employees’ retirement savings. These plans are best for bigger companies with fewer than 100 employees.
A SEP IRA: A SEP IRA is easy to set up and allows self-employed individuals to contribute up to $57,000 per year. And these plans are flexible, so you’re not required to contribute every year.
Defined benefits plan: A defined benefits plan is great for high-income individuals who are looking to save a lot of money toward retirement. However, these plans can be very expensive and tedious to set up.