Best Retirement Savings Plans for the Self-Employed

When you first start working, you probably hear a lot about 401ks and IRAs. But as the saying goes — “but wait! there’s more!” More, that is, for self-employed individuals.

For those with businesses and not standard W-2 style employment, there exists a veritable cornucopia of retirement account options, from the simple IRA to the complex cash balance plan.

Just because you are self-employed doesn’t mean you don’t have options to save for retirement. Here’s a rundown of the best retirement options for self-employed workers.

Retirement Accounts for the Self-Employed

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There are many advantages to being self-employed when it comes to saving for retirement. As an independent contractor, you are considered to be running your own business. Just like your employer gets to pick the benefits it offers, you now get to choose your own benefits.

– Individual 401(k) – SEP-IRA – Backdoor Roth IRA – HSA – Defined Benefit/Cash Balance Plan – Taxable Brokerage Account

Retirement Options for Self-Employed

Solid individual 401(k) plans can be easily opened at any of the large mutual fund or brokerage companies such as Vanguard, Fidelity, Charles Schwab, eTrade, or TD Ameritrade.

Where Can I Open a Solo 401(k) Account?

Be sure the individual 401(k) plan you choose has the features that are important to you, such as Roth contributions, IRA rollovers, or 401(k) loans. For example, if a 401(k) loan is important to you, Fidelity, Schwab, and Vanguard don’t allow them with their plans, but it is an option with eTrade.

How to Set Up a Solo 401(k) and What Plan Features Should You Look For?

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