💰 The two best retirement plans for self-employed people are a SEP-IRA and a solo 401(k). Here are the features and benefits of each plan.
For those who are self-employed it’s critical that you fund a retirement plan for yourself. Two of the best options are a SEP-IRA and a solo 401. As we reach the midpoint in 2022 it’s important to have a retirement plan option in place for yourself. Let’s take a look at the features and benefits of each plan.A solo 401 is a retirement plan that is available for business owners, a spouse who is involved in the business as well as any partners in the business.
Most major brokers and custodians offer the option to open a solo 401 account. The money in the account can be invested in virtually any type of investment vehicle offered by the custodian. This might include individual stocks and bonds, ETFs and mutual funds.SEP is short for simplified employee pension. A SEP-IRA is a retirement plan that allows both business owners and employees to participate. Contributions are made by the employer, no individual contributions are allowed.
Unlike a solo 401, a SEP-IRA does not allow for a Roth option and there can be no loans made against your plan balance.Generally most custodians will not allow many alternative assets to be held in either type of plan. These might include:
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