Especially as you’re getting older, you might be side-eyeing your friends at Google or Microsoft who get automatic 401k contributions and maybe even free snacks. Meanwhile, you as a freelancer are over here searching “can I retire on vibes?” 😒
The good news is you absolutely can save for retirement without selling your soul (or your business) to a corporate giant. In fact, you have two amazing options — and yes, you can even use both if you're feeling extra responsible this year.
The Solo 401k
A Solo 401k is designed for one-person businesses — freelancers, consultants, creators, tiny LLCs… basically anyone who works for themselves and doesn’t have full-time employees. It’s essentially the same as a regular corporate 401k, just without the corporate nonsense.
As a self-employed person, you actually get to play two roles: “employee” and “employer.” This means you can contribute as the employee — up to $23,500 in 2025, more if you’re 50+ — while also adding an employer match of up to 25% of your compensation.
When you add it all together, you can stash as much as $70,000 in 2025, which is very much giving “I’ve got my life together” and will make your 9-5 friends jealous of YOU. 💰
You also get options between a traditional Solo 401k, which gives you a tax deduction now, and a Roth Solo 401k, which gives you tax-free withdrawals later. And setting it up is surprisingly easy — most online brokerages let you do it yourself in under an hour.
The only mildly annoying part is that once your account hits $250,000, the IRS asks you to file an annual form. But honestly, if you’ve managed to stash away that much cash by now, you can probably hire an accountant if you’re feeling lazy. 😎
The SEP IRA
A SEP IRA is the low-drama, low-maintenance retirement option freelancers love. It’s perfect for people who just want something straightforward, whether you're a solo act or a small business owner with a few employees.
Setting one up is also pretty easy — fill out a form with a financial institution, sign your name, and boom, you’re in! 🥳
The contributions work a little differently, tho. You can put in up to 25% of your net self-employment income, capped at $70,000 for 2025. Everything you contribute is tax-deductible, and the money grows tax-deferred until retirement.
The only catch is if you have employees, whatever percentage you contribute for yourself, you must also contribute for them. So if you put 20% of your income toward your SEP IRA, you have to put 20% of theirs in too. Overall, very wholesome and very generous — but definitely something to keep in mind.
Which One Is Better?
Honestly, both are great, and which one wins depends totally on you. 🤷
The Solo 401k is ideal if you want the highest contribution potential, the option for a Roth account, and the satisfaction of squeezing every last drop of tax advantage out of your business income.
But the SEP IRA is better if you want something effortlessly simple, don’t want to bother with extra paperwork, or you have employees and need a plan that keeps everything even and fair.
And if you’re one of those freelancers who loves maximizing options and doesn’t mind a bit of strategic thinking? You can actually have both and use them to maximise your financial benefit. 🧠
Simply put, the real trick is simply starting. Open one of these accounts, put money in consistently, and let compound growth do what it always does — quietly build your future one dollar at a time.
