Self-Employed? You Need Solo 401k or SEP IRA

Updated March 10th, 2024

I was a freelancer for over 10 years when I found out about Solo 401k or SEP IRA during the pandemic. You can imagine my shock when I realized the lost time on compound interest and tax benefits. I spent weeks reading every article I could find, and reading posts from other freelancers, side hustlers, consultants, small business owners, and everyone who had something to say on the topic. Even though I lost the opportunity to take advantage of compound interest and tax benefits 10 years ago, I am taking advantage of it now.

If you are an entrepreneur, a side hustler, a contractor, a consultant – please stop everything you are doing and open a SEP IRA or Solo 401k as soon as you can. A Solo 401k is a retirement account for self employed individuals like yourself, and the SEP IRA is a simplified employee pension for small businesses. They are both great options for retirement savings and tax benefits depending on your situation.

Now, every opportunity I get, I educate self employed individuals to take advantage of Solo 401k or SEP IRA.

The best time to take advantage of compound interest is now.

Want to learn more about planning for retirement as a self-employed individual? Here is a great article from Forbes on SEP IRA vs SOLO 401k.

The White Coat Investor has an amazing blog post on how to choose between SEP IRA or Solo 401k.