A SEP IRA and a solo 401(k) are each good retirement plans for business owners. Depending on the type of business you have and your retirement goals, one may be a better option than the other.

The conventional wisdom regarding the solo 401(k) vs SEP IRA question is that self-employed people should choose the solo 401(k) because in most cases, the potential tax savings are higher.

These include the SEP-IRA, Solo 401(k), Cash Balance Pension Plan and even a SIMPLE IRA. The Solo 401(k) is generally reserved for those without employees, other than themselves and perhaps a spouse.

A solo 401(k) and SEP IRA have the same total contribution limit ($66,000 for 2023). However, if you’re at least 50 years old, the overall limit is $73,500 in 2023 with a solo 401(k) plan.

The tax benefit of a solo 401(k) and SEP IRA is tax-deferred growth, offering the benefit of an initial break. You won't pay tax on contributions and growth until you withdraw during retirement at ...

While saving for retirement is crucial, knowing what that looks like can be difficult. Self-employed individuals must choose between accounts like a SEP IRA or a solo 401(k). Both accounts have ...

A solo 401(k) and SEP IRA have the same total contribution limit for people younger than 50 ($70,000 in 2025, 69,000 for 2024 ...

Contributions to a Solo 401(k) or SEP IRA are generally tax-deductible, reducing the business owner’s taxable income for the year. Additionally, both plans have deadlines tied to tax filings, giving ...