Self-Employed? Explore These Top Retirement Savings Options

While employer-sponsored retirement plans often dominate the conversation, self-employed individuals or those without such plans can still secure their financial future. Here are some of the best retirement options currently available.

Image Source: Getty Images.

Traditional IRA

A traditional IRA allows you to make contributions that may be fully tax-deductible based on your income, letting your investments grow tax-deferred until retirement. You will owe taxes on the funds only upon withdrawal. Opening a traditional IRA can be done through a conventional broker, online platform, robo-advisor, bank, or credit union.

In 2025, the maximum contribution limit is $7,000 for individuals under 50, which increases to $8,000 for those 50 and older.

Roth IRA

With a Roth IRA, you contribute post-tax income, allowing your investments to grow tax-free. Because you’ve already paid taxes on the contributions, there are no taxes due on withdrawals during retirement.

The annual contribution limits mirror those of the traditional IRA. However, the total contributions to all of your IRAs in 2025 cannot exceed $7,000 if you are under 50, and $8,000 if you are 50 or older.

It’s essential to note income limits for contributing to a Roth IRA. For 2025, single tax filers can contribute fully if their modified adjusted gross income (MAGI) is below $150,000, while joint filers must have a MAGI under $236,000.

Solo 401(k)

For self-employed individuals or small business owners, a Solo 401(k) provides an excellent opportunity for tax savings and investment growth. You can contribute as both the employer and employee.

Here are the maximum contribution limits for 2025:

• Under 50: Up to $70,000.
• 50 to 59: Up to $77,500.
• 60 to 63: Up to $81,250.
• 64 or older: Up to $77,500.

As an employee, you can contribute a set amount based on your age:

• Under 50: Up to $23,500.
• 50 to 59: Up to $31,000.
• 60 to 63: Up to $34,750.
• 64 or older: Up to $31,000.

As the employer, you can contribute an additional 25% of your compensation, noting that your total contribution may be subject to limits based on your earnings.

SEP IRA

A Simplified Employee Pension (SEP) IRA is designed primarily for self-employed individuals and small business owners. The high contribution limits make it particularly attractive.

For 2025, the contribution limit for a SEP IRA is the lesser of $70,000 or 25% of your compensation. For instance, if your business earns $150,000, the allowable contribution would be $37,500, as that is below the $70,000 cap.

Health Savings Account (HSA)

If you have a high-deductible health plan, contributing to an HSA can help with medical expenses while also serving as a retirement savings vehicle. In 2025, you can contribute up to $4,300 if your coverage is individual, and $8,550 if it covers your family.

Unlike flexible spending accounts (FSAs), HSAs do not have a “use it or lose it” policy; unused funds roll over year after year. Additionally, you can invest HSA funds similarly to retirement accounts, potentially increasing growth over time.

Taxable Investment Accounts

A standard brokerage account can serve as another avenue for investing, though it does not come with the tax advantages of specialized retirement accounts. Although your employer will not match contributions in a taxable account, this type of account offers greater flexibility regarding investment choices, lower fee control, and unrestricted withdrawal options.

Financial Opportunities Highlighted

Many Americans struggle with retirement savings. However, learning about little-known retirement strategies can significantly boost your savings. Maximizing Social Security benefits, for instance, may contribute to your financial well-being in retirement.

Understanding these investment options empowers you to make informed decisions for your financial future.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.