Retirement Plans for the Self Employed

A one person business, a business owner with a spouse as the only full time employee, or a partnership can choose from the following retirement plans below.

1. Individual 401k
2. SEP-IRA
3. Defined Benefit Plan
4. SIMPLE-IRA

Which of these self employed retirement plans is right for you?

In general, selecting the right retirement plan is determined by the dollar amount that you would like to contribute annually and/or if you would like the option of taking a loan. Each plan benefits a business owner differently depending on their income and their desired amount of contribution.

Use the calculator below and fill in your business type (sole proprietor or corporation), your age, and your income to determine the amount that you could contribute into each of these retirement plans. When inputting your yearly income use NET income if you are a sole proprietorship or W-2 wages if you are incorporated.

After running the calculator, which of these self employed retirement plans displays the annual retirement contribution that you wish to make?

This is likely to be the right plan for you. The last point of consideration is whether you wish to have the flexibility of taking a loan from the plan. Individual 401k plans and defined benefit plans may permit loans.

Compare self employed retirement plans

View a chart comparing the features of self employed retirement plans.

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.