Best Retirement Options for Self Employed Workers

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When you’re self employed, it’s up to you to fund your retirement plan.  Here are retirement options for self employed workers that you need to know about

Are you self employed and looking for ways to plan for retirement?

There are more than 40.8 million people who are self employed in the United States. 

While being self-employed often gives you a lot of freedom with your work life, it can be challenging to save for retirement.

That’s because you do not have the luxury of receiving a 401(k) corporate match program that some of your friends may have.

But being self-employed doesn’t mean you cannot save for retirement now.

retired guy on beach

Read on to learn about the best retirement options for self employed workers!

Solo 401(k) Plan

A solo 401(k) plan is a great way for someone who is self employed to save for retirement.

In particular, these plans are best for someone who is not only self employed, but also has no employees working for them (except a spouse).

Starting in 2019, a self employed person can invest up to $56,000 each year into the plan. You can also invest up to $9,000 as a catch-up provision if you are 50 years or older.

These are particularly attractive for someone working in a cyclical industry. That’s because the high limits allow you to save a large amount of money when you are earning more.

The bear market survival guide can also give you tips on where to invest your money!


The SEP IRA is among the best self employed retirement plans for someone who has few or no employees.

A self employed investor can contribute the lesser of $56,000 or up to 25 percent of their net earnings in self employment.

One of the important things to remember if you are saving late for retirement is that there is no catch-up contribution provision.

An attractive aspect for these IRAs is that there is no requirement for IRS reporting. This keeps things simple so that you can focus on investing your self employed retirement earnings.


A SIMPLE IRA can be an attractive option for a self employed individual with up to 100 employees.

One of the best aspects of a SIMPLE IRA, as a business owner, is that employees contribute to the plan through deferring salary. 

But one thing to remember is that an employer is typically required to match an employee’s contributions up to 3% of their compensation. 

This gives your employees an additional incentive to save for retirement but is another expense for your business to consider.

Wrapping Up: The Best Retirement Options For Self Employed Workers

Being self employed does not mean you should ignore the importance of saving for your retirement.

The best retirement options for self employed people depend on someone’s circumstances. You should take time to consider your personal needs and what you want to achieve in retirement. 

Speaking to a financial advisor about your retirement goals will help you determine what you should do now.

Are you looking for other unique ways to leverage the benefits of being self employed?

You may be able to take advantage of the extra downtime you have as your own boss.

Check out our blog post on ’40 Side Hustle Ideas To Make Money From Home’!

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