January 8, 2014

Self-Employed Retirement Plans

If you are self-employed, you have several flexible options to save for retirement.   We recommend the following two options, both of which offer tax-deductible contributions and tax-deferred growth.

Simplified Employee Pensions (SEP)

  • Contribute up to 25% of your net self-employment income
  • Maximum contribution of $51,000 for 2013
  • Contribution does not need to be made until your tax return is filed
  • The plan must be in place  by the due date of your tax return (including extensions)

Solo 401(k)

  • Contribute up to 25% of your net self-employment income
  • Maximum “employer” contribution of $51,000 for 2013
  • Maximum “employee” contribution of $17,500 for 2013 (or, if over the age of 50, $23,000)
  • “Employee” portion must be contributed by December 31st of the tax year
  • “Employer” portion does not have to be funded until your return is filed

We are happy to discuss these options further with you to find the best match for your particular circumstances. If you have any questions, please contact us at 415.362.5990.