Retirement Planning Without 401(k): Options for the Self-Employed

Author

William Thompson
September 05, 2025

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For many self-employed professionals, entrepreneurs, and small business owners, retirement planning can feel like a challenge. Without access to a traditional employer-sponsored 401(k), it is easy to put savings on the back burner or assume retirement security is out of reach. The good news? There are powerful alternatives designed specifically for those who work for themselves. With the right plan in place, you can still build long-term wealth and retire with confidence.

Why This Matters

Traditional employees often rely on their employer’s 401(k) plan for retirement savings, but as a self-employed person, you are both the employer and the employee. That means you have more responsibility but also more flexibility. Instead of being limited to one option, you can choose the retirement vehicle that best fits your business, income, and goals.

Retirement Options for the Self-Employed

Solo 401(k)

  • Designed for business owners with no employees (other than a spouse).

  • Allows both “employer” and “employee” contributions, meaning you can save a higher amount compared to most accounts.

  • Contribution limits can exceed $60,000 (depending on age and income).

SEP IRA (Simplified Employee Pension IRA)

  • Flexible and easy to set up.

  • Contributions are tax-deductible and can be up to 25% of your net earnings.

  • Great for freelancers and small business owners who want to make large, pre-tax contributions.

Traditional or Roth IRA

  • Low barrier to entry, anyone with earned income can open one.

  • Contribution limits are lower (around $7,000 depending on age), but they are great for consistent, long-term saving.

  • Roth IRAs allow tax-free withdrawals in retirement, while Traditional IRAs provide upfront tax benefits.

Defined Benefit Plan

  • Works like a pension you create for yourself.

  • Best for high earners who want to put away significant amounts before retirement.

  • More complex and costly to administrate, but can dramatically boost retirement savings.

Taxable Brokerage Accounts

  • No contribution limits or withdrawal restrictions.

  • Great for building wealth in parallel with your retirement accounts.

  • Dividends and gains are taxable, but flexibility is unmatched.

Smart Habits for Self-Employed Retirement Planning

  • Pay yourself first. Automate contributions just like a paycheck.

  • Diversify accounts. Do not rely on just one vehicle; combine tax-deferred, tax-free, and taxable options.

  • Revisit annually. As your income grows, adjust your contributions to maximize savings.

  • Think long-term. Retirement planning is about consistency, not quick wins.

Why is it Doable

Without 401(k), it may feel like you are at a disadvantage. But in reality, self-employed professionals often have more flexibility to save aggressively and tailor retirement planning to their exact needs. The key is to choose the right tools and commit to consistent contributions.

Quick Takeaways

  • Solo 401(k) and SEP IRAs are excellent for high-contribution potential.

  • IRAs provide flexible, tax-advantaged options for anyone self-employed.

  • Defined benefit plans can supercharge retirement savings for high earners.

  • Even without tax-advantaged accounts, brokerage accounts help build wealth.

  • Discipline and consistency are more important than income level.

Being self-employed means, you must take ownership of your retirement, but it also means you control how, when, and how much you save. With the right mix of retirement accounts, you can create a strong financial future without ever needing a traditional 401(k).

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