4 Retirement Plan Options for Self Employed

By MBO Partners | July 27, 2022


Key Points

Although independent careers allow for greater flexibility, autonomy, and creativity, many self-employed professionals worry about the difficulty and unpredictability of retirement planning.

A traditional career offers built-in retirement alternatives, but it might be more challenging to negotiate this industry on your own.

Your personal objectives and income level, as well as other aspects, will determine which outcome is best for you.

Self-employed professionals enjoy the flexibility, control, and creativity an independent career offers, but the challenge and uncertainty of planning for retirement is a common concern. At a traditional job, you have the benefit of built-in retirement options, but this field can be more difficult to navigate on your own.

Fortunately, there are a number of solutions available. The right one for you will depend on a number of factors including your personal goals and income level, which you can discuss with a financial advisor.

4 Retirement Plan Options for Self Employed

The decision on which plan you choose ultimately depends on whether you are able to contribute 25% or more of your income to retirement savings.

If the answer is no, you have two options for offering employees a retirement savings option:

1. Simple IRA:

This is ideal for small businesses with less than 100 employees and has several advantages:

  • Easy to create and maintain
  • Minimal fees
  • Tax deductible contributions
  • Customizable employee contributions
  • Tax-deferred growth


This is great for independent professionals with few or no employees looking to contribute up to 25% of their income to retirement. Advantages are:

  • Easy to create and maintain
  • Minimal fees
  • Customizable employee contributions
  • Tax-deferred growth

If you can contribute 25% or more of your income to retirement savings, your best options are a Solo 401(k) or a Defined Benefit Plan.

3. Solo 401(K):

This is ideal for independent professionals with no employees looking for a flexible way to save a lot for retirement. Advantages are:

  • High contributions limits
  • Customizable employee contributions
  • Tax-deferred growth

4. Defined Benefit Plan:

This is a great option for independents with high, stable incomes and few or no employees, looking to save a lot for retirement. Advantages are:

  • Very high contributions lmits
  • Tax deductible contributions
  • Financial risk mitigation
  • Tax-deferred growth

Here is a summary of the retirement options available to self employed professionals. Answer the questions in the infographic below to discover which one is best for you.


retirement options for self employed


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