Choosing the right retirement plan can save you tens of thousands in taxes every year. Compare the Solo 401(k), SEP-IRA, and SIMPLE IRA side-by-side to see which lets you contribute the most.
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The most flexible option. Contribute as both employee (up to $24,500) and employer (25% of compensation). Offers a Roth option. Highest potential contribution for most owners.
Simple to set up and maintain. Employer-only contributions up to 25% of compensation (max $72,000). No employee deferral or catch-up. Great for high earners who want simplicity.
Designed for businesses with employees. Lower contribution limits but includes an employer match of up to 3%. Good for owners who want to offer a plan to their team.
Higher contributions aren’t always worth it if the ongoing paperwork buries you. Here’s how each plan stacks up on the complexity scale.
The simplest plan to establish and maintain. Fill out a two-page IRS Form 5305-SEP and you’re done — no plan document to draft, no annual IRS filings, and no ERISA requirements.
Can be established as late as your tax filing deadline (including extensions). No Form 5500. No annual employee notices. Contributions are discretionary year to year.
Slightly more involved than a SEP, but still avoids ERISA and Form 5500 filing. Requires a plan document (IRS Form 5304 or 5305-SIMPLE) and an annual notification to employees during the 60-day election period.
Must be established by October 1 of the plan year. Employer contributions are mandatory every year (either a 3% match or 2% nonelective). Employee deferrals must be deposited within 30 days of payroll.
The most powerful plan, but with more moving parts. Requires a formal plan document and must be established by December 31 of the tax year. Once plan assets exceed $250,000, you’ll need to file Form 5500-EZ annually with the IRS.
Subject to ERISA if covering employees beyond a spouse. Roth and loan provisions add flexibility but also record-keeping. Many providers now handle compliance for a modest fee, making it far more accessible than it used to be.
Important: This tool provides estimates for the 2026 tax year for educational purposes only. Self-employed contribution limits use net earnings after the deductible half of SE tax, which effectively reduces the employer contribution percentage from 25% to approximately 20% of net profit. S-Corp contributions are based on W-2 salary. The Solo 401(k) total annual addition limit is $72,000 for 2026 ($80,000 with age 50+ catch-up, $83,250 for ages 60–63). SIMPLE IRA employer match assumes 3% of compensation. Actual plan design, deadlines, and eligibility rules vary. SECURE 2.0 catch-up rules for ages 60–63 apply through 2027. Consult with a tax professional before establishing or contributing to any retirement plan.
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