Guide to Retirement Planning for the Self-Employed

When you work for yourself, income can be unpredictable with both draughts and windfalls. It’s important to remember to invest extra in the good years to make up for the scarce ones. Ordinary IRA accounts have low limits, but self-employment retirement accounts have much higher limits and tax benefits. The choice between a Traditional vs Roth IRA is more of a question about how investors expect tax rates to change when they retire. However, a Traditional or Roth IRA (or both) can be used alongside a self-employment retirement account. They effectively increase the total limit for retirement contributions. Solo 401k accounts can be a great choice for solopreneurs with no employees. We find that SEP IRAs are usually the easiest to set up and manage. SIMPLE IRAs are simplified accounts for small business offering retirement benefits to employees. It’s critical not to neglect retirement saving. Just remember to save extra in the good years to make up for bad years.