If you work for yourself with no employees, the plan that usually lets you save the most is a Solo 401(k). In 2026 you can put in $24,500 as the employee plus an employer contribution based on your profit, up to $72,000 in total before catch-up. A SEP IRA only takes the employer share, a SIMPLE IRA caps deferrals at $17,000, and an IRA adds $7,500 on top of whichever you pick. A defined benefit plan is a niche option.
This guide is the map. It puts every option side by side, with the 2026 limits, who each one fits and the rule that decides it, and links to the detailed guide for each choice. If you’re deciding now, the three questions that matter are how much you can afford to save, whether you hire or plan to, and whether you want Roth money.
The five options side by side
| Plan | 2026 limit | Who it fits | Watch for |
|---|---|---|---|
| Solo 401(k) | $24,500 as the employee, plus an employer share; $72,000 total before catch-up | Owners with no employees (a spouse can join) | Form 5500-EZ filing once assets reach $250,000 |
| SEP IRA | Employer contributions only, up to $72,000 | Owners who want an employer-only plan | No employee deferral, so lower profits save less than in a Solo 401(k) |
| SIMPLE IRA | $17,000 of salary deferrals, plus a 3% match or 2% contribution | Owners with a few employees | Can't be set up if you keep another qualified plan; must be set up by October 1 |
| Traditional or Roth IRA | $7,500, plus $1,100 from age 50 ($8,600 total) | Anyone with earned income, alongside any plan | Roth IRAs have income limits; no loans |
| Defined benefit plan | Annual benefit up to $290,000; contributions set by an actuary | Owners who want to save more than the $72,000 defined contribution limit allows, sized by an actuary | Contributions set by actuarial calculations and paid on a schedule |
Solo 401(k)
- 2026 limit
- $24,500 as the employee, plus an employer share; $72,000 total before catch-up
- Who it fits
- Owners with no employees (a spouse can join)
- Watch for
- Form 5500-EZ filing once assets reach $250,000
SEP IRA
- 2026 limit
- Employer contributions only, up to $72,000
- Who it fits
- Owners who want an employer-only plan
- Watch for
- No employee deferral, so lower profits save less than in a Solo 401(k)
SIMPLE IRA
- 2026 limit
- $17,000 of salary deferrals, plus a 3% match or 2% contribution
- Who it fits
- Owners with a few employees
- Watch for
- Can't be set up if you keep another qualified plan; must be set up by October 1
Traditional or Roth IRA
- 2026 limit
- $7,500, plus $1,100 from age 50 ($8,600 total)
- Who it fits
- Anyone with earned income, alongside any plan
- Watch for
- Roth IRAs have income limits; no loans
Defined benefit plan
- 2026 limit
- Annual benefit up to $290,000; contributions set by an actuary
- Who it fits
- Owners who want to save more than the $72,000 defined contribution limit allows, sized by an actuary
- Watch for
- Contributions set by actuarial calculations and paid on a schedule
Sources: IRS Notice 2025-67 (2026 limits); IRS Publication 560 (2025); IRS one-participant 401(k) page. The $72,000 limit is the 2026 defined contribution limit; the Solo 401(k) and SEP columns show it before catch-up. Check each linked guide for how the employer share is figured.
Catch-up and IRA numbers for 2026
The first table gives the main limits. These are the add-ons that apply at 50 and above, plus the IRA income ranges that decide whether the IRA add-on helps:
| Item | 2026 amount |
|---|---|
| 401(k) deferral limit, age 49 or under | $24,500 |
| 401(k) catch-up, age 50 and over | +$8,000 (up to $32,500) |
| 401(k) catch-up, ages 60 to 63 | $11,250 instead of $8,000 |
| SIMPLE deferral limit | $17,000 |
| SIMPLE catch-up, age 50 and over / ages 60 to 63 | $4,000 / $5,250 |
| IRA limit / catch-up at 50 | $7,500 / +$1,100 |
| Traditional IRA deduction phase-out, single, covered by a workplace plan | $81,000 to $91,000 of income |
| Traditional IRA deduction phase-out, married filing jointly, spouse covered by a workplace plan | $129,000 to $149,000 of income |
| Traditional IRA deduction phase-out, married filing jointly, you not covered but your spouse is | $242,000 to $252,000 of income |
| Roth IRA phase-out, single or head of household | $153,000 to $168,000 |
| Roth IRA phase-out, married filing jointly | $242,000 to $252,000 |
401(k) deferral limit, age 49 or under
- 2026 amount
- $24,500
401(k) catch-up, age 50 and over
- 2026 amount
- +$8,000 (up to $32,500)
401(k) catch-up, ages 60 to 63
- 2026 amount
- $11,250 instead of $8,000
SIMPLE deferral limit
- 2026 amount
- $17,000
SIMPLE catch-up, age 50 and over / ages 60 to 63
- 2026 amount
- $4,000 / $5,250
IRA limit / catch-up at 50
- 2026 amount
- $7,500 / +$1,100
Traditional IRA deduction phase-out, single, covered by a workplace plan
- 2026 amount
- $81,000 to $91,000 of income
Traditional IRA deduction phase-out, married filing jointly, spouse covered by a workplace plan
- 2026 amount
- $129,000 to $149,000 of income
Traditional IRA deduction phase-out, married filing jointly, you not covered but your spouse is
- 2026 amount
- $242,000 to $252,000 of income
Roth IRA phase-out, single or head of household
- 2026 amount
- $153,000 to $168,000
Roth IRA phase-out, married filing jointly
- 2026 amount
- $242,000 to $252,000
Sources: IRS IR-2025-111 and Notice 2025-67. A Solo 401(k) counts as a workplace plan for this test when contributions are allocated to your account for the year, per the IRS covered-by-a-plan page. Check Publication 590-A or ask a tax professional before relying on the deduction.
Solo 401(k): the default for a freelancer with no employees
The IRS describes a one-participant 401(k) as covering a business owner with no employees, or that person and their spouse. You contribute in two roles. As the employee you can defer up to $24,500 in 2026, and as the employer you can add a share of your profit, with the two together capped at $72,000 before catch-up. Catch-up adds $8,000 from age 50 and $11,250 for ages 60 to 63, per Notice 2025-67.
That’s why it wins at most profit levels. A single freelancer under 50 with $60,000 of profit can put in $35,652 to a Solo 401(k), $24,500 as the employee and $11,152 as the employer, while a SEP IRA, which has only the employer share, tops out at $11,152. Those are the figures from our retirement contribution calculator, and the profit is hypothetical. The full numbers, with examples by income, are in the Solo 401(k) contribution limits guide, and how to open a Solo 401(k) covers the steps. Our EIN guide covers whether you need one, and the $24,500 employee limit is per person, so it is shared with any 401(k) at a day job, as the guide on a Solo 401(k) and a 401(k) at work explains.
The IRS adds two details about the one-participant plan. The owner wears two hats, and the employer side is up to 25% of compensation, with a special calculation for the self-employed that uses net earnings after half of self-employment tax and the contribution itself. And the plan carries a reporting duty: it is generally required to file Form 5500-EZ if it has $250,000 or more in assets at the end of the year, while a plan with fewer assets may be exempt.
Publication 560’s Table 1 caps the employer deduction at 25% of all participants’ compensation, and its footnote says net earnings from self-employment must take the contribution into account. That is why an owner’s own calculation differs from a flat 25% of profit.
A Solo 401(k) is also the one of these common choices that can offer loans, if your plan document allows them. Our guide to borrowing from a Solo 401(k) covers the limits and the repayment trap.
SEP IRA: employer contributions only
A SEP IRA takes only the employer contribution, up to the $72,000 defined contribution limit, and for a sole proprietor the working figure is net profit after half of self-employment tax and the contribution itself. Publication 560’s SEP reporting rules describe notices and an annual statement of contributions to eligible employees, while the Form 5500-EZ filing above belongs to the Solo 401(k). The tradeoff shows up when profit is modest, because Table 1 of Publication 560 lists only an employer contribution for a SEP and no employee deferral. The SEP IRA guide walks through it, and the Solo 401(k) vs. SEP IRA comparison shows how much each allows at six income levels. If you want both, the guide to using a SEP IRA and a 401(k) together explains the limits.
A SEP shares its ceiling with your other plans. Publication 560 says a SEP counts as a defined contribution plan for the annual additions limit, so your SEP contributions are added to contributions to any other defined contribution plan you keep, such as a Solo 401(k). The same publication says the maximum contribution for an eligible employee is $72,000 in 2026 and that compensation over $360,000 is ignored when figuring the limit. And to deduct a SEP contribution for a year you must make it by the due date of your return for that year, including extensions.
SIMPLE IRA: mostly for owners with employees
Publication 560 says you can set up a SIMPLE IRA if you had 100 or fewer employees who earned $5,000 or more, and that self-employed individuals count. It allows salary deferrals of $17,000 in 2026, with a match of up to 3% or a fixed 2% contribution. The two rules that rule it out for many freelancers: you can’t set one up if you maintain another qualified plan, and for an existing business the plan has to be set up between January 1 and October 1. For 2026 that date has passed. A Solo 401(k) usually allows more.
If you hire
Hiring changes the choice, and the IRS rules differ by plan. For a SEP, Publication 560 defines an eligible employee as someone who has reached 21, has worked for you in at least 3 of the last 5 years, and has received at least $750 in compensation in 2025, rising to $800 in 2026. You may use less restrictive requirements, but not more restrictive ones. Your contribution for each employee is limited to the lesser of 25% of that employee’s compensation or $72,000 in 2026, and a SEP counts toward the same defined contribution limit as your other plans.
For a one-participant 401(k), the IRS says that if you hire employees who meet the plan’s eligibility requirements you must include them, and their deferrals become subject to nondiscrimination testing unless the plan is a safe harbor or other exempt plan. The no-testing advantage disappears with the first eligible hire. A SIMPLE IRA stays open to employers with up to 100 employees who earned $5,000 or more, as described above, and it counts self-employed individuals with earned income among them. A payroll plan is not something to improvise, so talk to a plan provider before you hire.
IRAs: the add-on
A Traditional or Roth IRA is separate from your business plan and stacks on top of it, up to $7,500 in 2026, plus $1,100 from age 50, according to Notice 2025-67. Roth IRAs have income limits, which the Roth IRA guide for freelancers covers. IRAs can’t offer loans.
Defined benefit plans: a niche
A defined benefit plan promises a retirement benefit, and the contribution is set by actuarial assumptions and calculations, up to an annual benefit of $290,000 in 2026. Publication 560 says contributions must generally be paid in quarterly installments, with a final payment 8.5 months after the plan year ends. Required payments on a schedule are hard to square with lumpy income, so a plan administrator or tax professional should size one before you consider it.
How to choose
- You have no employees and want to save more than $7,500 a year: a Solo 401(k) is usually the answer. A SEP IRA is the main alternative.
- You have employees: a SEP IRA or SIMPLE IRA, or a standard 401(k), because a Solo 401(k) is for owners with no employees other than a spouse. A professional can help with the rules for covering staff.
- You want Roth money: a Solo 401(k) can offer designated Roth deferrals if the plan allows them, and an IRA can be Roth. Our Roth vs. Traditional guide shows what each costs in tax this year.
- Your income swings: you don’t have to fund the same amount every year. The irregular income guide covers how to size contributions.
- You’re near a tax cliff: contributions that lower AGI can matter for subsidies and credits. See the ACA subsidy cliff guide and our guide to the Saver’s Credit for lower earners.
What no plan changes
None of these plans lowers self-employment tax. It’s figured on net profit before a retirement contribution, which our guide on whether a Solo 401(k) reduces self-employment tax shows with numbers. What a Traditional contribution lowers is income tax, and in our worked example it also lowered the QBI deduction, which the QBI guide explains. A contribution also doesn’t reduce the earnings recorded for your future Social Security benefit, which the Social Security guide for freelancers covers.
Deadlines
Each plan has its own deadline to open the plan, and another to make the contribution, and they aren’t the same. Publication 560, Table 1, sets them out:
| Plan | Set up by | Contribute by |
|---|---|---|
| SEP IRA | Any time up to the due date of your return, including extensions | Due date of your return, including extensions |
| SIMPLE IRA | Any time between January 1 and October 1 of the calendar year | Salary deferrals: 30 days after the end of the month. Match or nonelective: return due date, including extensions |
| Solo 401(k) (defined contribution plan) | By the tax-filing due date, including extensions | Deferrals and profit-sharing: return due date, including extensions |
| Defined benefit plan | By the tax-filing due date | Generally quarterly installments, 15 days after each quarter, with a final contribution 8.5 months after the plan year ends |
SEP IRA
- Set up by
- Any time up to the due date of your return, including extensions
- Contribute by
- Due date of your return, including extensions
SIMPLE IRA
- Set up by
- Any time between January 1 and October 1 of the calendar year
- Contribute by
- Salary deferrals: 30 days after the end of the month. Match or nonelective: return due date, including extensions
Solo 401(k) (defined contribution plan)
- Set up by
- By the tax-filing due date, including extensions
- Contribute by
- Deferrals and profit-sharing: return due date, including extensions
Defined benefit plan
- Set up by
- By the tax-filing due date
- Contribute by
- Generally quarterly installments, 15 days after each quarter, with a final contribution 8.5 months after the plan year ends
Source: IRS Publication 560 (2025), Table 1. Table 1 states the general rule. Retroactive elective deferrals have their own limits for a plan adopted after year-end, which the October 15 deadline guide covers. Publication 560 also says solo 401(k) plans are non-ERISA plans that don't fall under Department of Labor rules, which can set earlier dates for other plans.
The October 15 deadline guide covers when these dates fall and what’s still possible after the year ends.
Note
If you’re not sure which plan fits, start with the contribution limits guide and run your profit through our Solo 401(k) contribution calculator and retirement contribution calculator. They show the maximum for each plan from the same figures used in these guides.
Other guides that go with this one
- Occupation guides: real estate agents and the spouse contribution rules.
- Health coverage next to retirement: the HSA guide for the self-employed.
- Taxes on the income you’re saving from: how much to set aside.
How we got these figures
The 2026 limits for the $24,500 deferral, the $72,000 defined contribution limit, the $290,000 defined benefit limit, the $17,000 SIMPLE limit, the $7,500 IRA limit and the catch-up amounts come from IRS Notice 2025-67 and the IRS announcement IR-2025-111. The rules on who can set up a SIMPLE IRA, the January 1 to October 1 setup window, the match and nonelective contributions, and how a defined benefit plan’s contributions are set come from Publication 560 (2025), and the description of a one-participant 401(k) from the IRS page on those plans. We opened them on October 14, 2026, along with the IRS one-participant 401(k) page, the IRS plan loan page and the 2025 Schedule SE. The SEP eligibility and deadline rows come from Publication 560 (2025), whose Table 1 shows 2025 dollar figures, so we used it only for dates and rules. The catch-up amounts and IRA ranges come from IR-2025-111 and Notice 2025-67. The detailed numbers for each plan are in the linked guides, which use the same sources. For how we choose sources, see How We Research.
This is general information, not investment, tax or legal advice. Plan rules have exceptions and deadlines that depend on your situation, so confirm the details with your plan provider or a tax professional before you contribute.
