When you’re self-employed, building for retirement often feels like trying to construct a house without a blueprint. There’s no HR team offering a 401(k). No employer matching contributions. And, let’s be honest, with income that can change month-to-month, even figuring out how much to invest—or where—can feel like a guessing game.
But here’s the good news: Just because you don’t have a traditional employer doesn’t mean you can’t create a powerful retirement plan. In fact, with the right structure, you can build something more tailored and even more tax-efficient than what many full-time employees get. The key is starting with a plan that works with your business, not against it.
Let’s walk through a few smart options for building wealth outside the standard 401(k), and how to start taking action, no matter where you are today.
Why Retirement Planning Feels Harder—And Why It Doesn’t Have to Be
Traditional employees have one major advantage: simplicity. A 401(k) is typically set up when they’re hired, and contributions are deducted automatically from each paycheck. They don’t have to think about it.
When you’re self-employed, however, you’re busy wearing ten hats—serving clients, managing taxes, building systems. It’s no wonder investing for retirement gets put off. The inconsistent income doesn’t help, either. Saving a fixed amount each month can feel risky when your income varies. Or it’s difficult to even pinpoint what you could every month.
But here’s what matters: You don’t need to do it perfectly. You just need to get started. Because the truth is, there are retirement plans built specifically for business owners and solo professionals. These plans offer flexibility, strong tax advantages, and the ability to grow your money over time.
Retirement Accounts Built for You—And How to Choose One
Let’s break down the most common self-employed retirement accounts, without the jargon.
SEP-IRA (Simplified Employee Pension)
- Best for: Solo professionals or business owners with a few employees.
- Contribution limit: Up to 25% of your net income, maxing out at $70,000 (2025).
- Tax benefit: Contributions are tax-deductible.
- Good to know: You must contribute the same percentage to employees (if you have any) as you do for yourself. And what constitutes as an employee can be different than what you view as an employee.
Solo 401(k)
- Best for: Solopreneurs without employees (besides a spouse).
- Contribution limit: Up to $70,000, combining employee and employer contributions.
- Tax benefit: Flexible—choose between traditional (pre-tax) or Roth (after-tax) contributions.
- Bonus: Allows for catch-up contributions if you’re 50 or older and gives you loan access if needed.
Roth IRA
- Best for: Those just starting out or with moderate income.
- Contribution limit: $7,000 annually ($8,000 if age 50+).
- Tax benefit: Contributions are post-tax, but growth and withdrawals in retirement are tax-free.
- Good to know: There are income limits, and it’s a great complement to a SEP or Solo 401(k). Plus, you can use backdoor Roths for those with higher incomes.
These accounts offer control. You can invest how and when you want. And you can design your saving strategy around the ebbs and flows of your business—not someone else’s payroll calendar.
How to Make Saving a Habit—Even When Income Fluctuates
Consistency builds wealth. But for self-employed professionals, consistency doesn’t always mean the same dollar amount each month.
Start by thinking in percentages, not flat numbers. Commit to saving, say, 10% of every invoice you receive. When a strong month rolls in, you save more. When it’s lighter, you’re not overextending yourself.
Another option: Set aside money weekly into a “tax and retirement” account, even if it’s just $50. Then, once per quarter, move that into your SEP or Solo 401(k). This habit makes contributions more predictable and keeps you from scrambling at the end of the year.
And automate it wherever you can. Set recurring transfers from your business checking to a savings or investment account. You’ll never miss what you don’t see.
Why Starting Now—Even Small—Makes All the Difference
Here’s the thing about investing: Time matters more than perfection. You don’t need to max out your account in year one. You just need to start.
Let’s say you put away $200/month into a retirement account that earns 7% annually. Over 25 years, that could grow to more than $160,000. But wait five years to start? That same monthly amount only gets you to $105,000. That’s a $55,000 difference for waiting—and the only thing that changed was when you took action.
Investing isn’t about having the biggest income. It’s about using the income you have with purpose.
Build the Wealth You Deserve
You built your business with intention. Your retirement should be no different. With the right account, a strategy that fits your cash flow, and a little consistency, you can create a plan that supports not just your work—but your future self and family, too.
No 401(k)? No problem. You’ve got tools, and now you’ve got a plan.
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