What is the best retirement plan for an independent contractor?

February 2, 2024 Aging

Retirement Plan Options for the Self-Employed. There are five main choices for the self-employed or small-business owners: an IRA (traditional or Roth), a Solo 401(k), a SEP IRA, a SIMPLE IRA or a defined benefit plan. Many or all of the products featured here are from our partners who compensate us.

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Also, can you retire as an independent contractor?

Absolutely. Whether you‘re a freelancer, independent contractor or budding entrepreneur, you have access to an expanded range of retirement plans, including both an Individual 401(k) and a SEP IRA.

Besides, can you have a 401k as an independent contractor? If you are self-employed or own a business or partnership with no employees you can open a self-employed 401(k). A spouse who works in the business can participate as well. You get 2 opportunities for contributing to a self-employed 401(k)—first as the employee, and again as the employer.

Accordingly, can a 1099 employee open a SEP IRA?

SEP IRA. The simplified employee pension plan allows 1099 workers to contribute up to 25 percent of their net earnings from self-employment or $53,000, whichever is lower, in 2016. … Like a traditional IRA, you are allowed to contribute to a SEP IRA up to April 15 and still claim the contributions on the prior tax year.

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