SEP-IRA vs Solo 401(k): Side-by-Side Comparison
Self-employed with no employees? The SEP-IRA and Solo 401(k) are your two main options for sheltering serious income from taxes — both allow up to $72,000 of contributions in 2026, but they get there very differently. The Solo 401(k) usually wins at lower income levels because of its employee-deferral component; the SEP wins on simplicity.
Retirement Plan Comparison for Self-Employed
Compare contribution limits and features at your income level
| Feature | SEP-IRA | Solo 401(k) | SIMPLE IRA | Traditional IRA |
|---|---|---|---|---|
| Max contribution (2026) | $72,000 | $72,000 | $18,500 | $7,500 |
| Catch-up (age 50+) | N/A | $8,000 | $4,000 | $1,100 |
| Employees allowed | Yes | No employees* | Up to 100 | N/A |
| Roth option | ||||
| Loan allowed | ||||
| Setup deadline | Tax filing deadline | Dec 31 of tax year | Oct 1 of tax year | Tax filing deadline |
| Admin complexity | Very low | Low-Medium | Low | Minimal |
| Best for | Simple, high-income SE | Max contributions + Roth | Small businesses w/ staff | Supplemental savings |
| Your max contribution | $34,631 | $59,131 | $21,500 | $7,500 |
| Tax savings estimate | $8,312 | $14,192 | $5,160 | $1,800 |
The Bottom Line
Rule of thumb: if you earn under ~$300,000 of self-employment income, a Solo 401(k) lets you contribute more at the same income. If you value zero paperwork and flexible funding deadlines, the SEP-IRA is hard to beat.
Related Reading
SEP-IRA vs Solo 401(k): Which Retirement Plan Is Right for Your Business?
Self-employed? Compare SEP-IRA and Solo 401(k) retirement plans. Learn contribution limits, tax benefits, and which is better for your situation.
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