Introduction
As a self-employed individual, planning for retirement may seem like a daunting task. Without the traditional benefits and pensions offered by employers, it’s essential to understand the different retirement plans available to you. In this article, we will explore the various self-employed retirement plan options and help you make an informed decision about the best one for your financial future.
1. Simplified Employee Pension Plan (SEP IRA)
The Simplified Employee Pension Plan (SEP IRA) is a retirement plan specifically designed for self-employed individuals and small business owners. With a SEP IRA, you can contribute up to 25% of your net self-employment income٫ or a maximum of $58٫000 (2021 limits)٫ whichever is less. Contributions are tax-deductible and grow tax-free until you withdraw during retirement.
