Self Employed Retirement

Are you successful and self employed? Self employed retirement plans provide a tax advantaged way to save for your retirement. The information provided here is intended to be a simple and helpful retirement plan resource for small business owners and the self employed.

What are my retirement plan options to reduce my taxable self employment income?

Typically successful self employed business owners who would like to make a contribution in excess of the limits of the Traditional or Roth IRA select from 4 self employed retirement plan options; the Individual 401k, SEP IRA, Defined Benefit plan, or Simple IRA.

What is the difference between them? Why would I choose one retirement plan versus another self employed retirement plan?

Excellent question. Each retirement plan benefits a business owner differently depending on their income. For example, some plans are better suited for individuals who may not make a lot of income, but would like to maximize their retirement contribution. In some cases as much as 100% of self employment income can be contributed into a self employed retirement plan.

In a different scenario, a business owner may make a lot of income with the intent to maximize their contributions, but some self employed retirement plans wouldn't be as advantageous because of their maximum contribution limits.

Another important feature to consider is would you like the flexibility of a receiving a loan. IRS rules permit loans from a Defined Benefit plan and an Individual 401k.

Which self employed retirement plan is right for me?

The Individual 401k, SEP IRA, Defined Benefit plan and Simple IRA each have their advantages and disadvantages.  Examine the features of these self employed retirement plans to determine which plan is appropriate for you.

Learn more about self employed retirement.

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Disclosures:

*  The information on this page is for informational purposes only and does not constitute, and should not be construed as, professional, legal or tax advice. To determine your individual tax situation and specific needs, please consult a professional tax advisor.

* Information contained in these sections merely highlight some benefits. There are risks involved with all investments that could include tax penalties and risk/loss of principal.