Being your own boss has plenty of perks, including having flexibility and the freedom to build your business your way. But, while self-employed individuals like yourself are focusing on their business, one major financial aspect often gets ignored: saving for retirement. And without an employer 401(k) in place, it’s up to you to find the right plan. Thankfully, there are numerous retirement savings options that are designed specifically for freelancers, consultants, and small business owners operating on their own.  

Below, we’ll explore what plans are available for self-employed individuals, their benefits, and how to choose the right fit based on your goals.  

Why Retirement Planning Matters for Self-Employed Individuals

When you’re busy managing your own business, it’s easy to put off planning for retirement and focus on your other must-do’s like covering expenses or reinvesting in your company. But skipping out on building your nest egg can put your future security at risk.

By refocusing and prioritizing retirement planning now, you’ll benefit by:

  • Contributing as both employer and employee (more savings overall!)
  • Tax advantages to lower your taxable income
  • Ability to save more than with traditional or employer-sponsored plans
  • Peace of mind with long-term financial independence

Retirement Plans Available if You’re Self-Employed

Here are the most common self-employed retirement plans that you can choose from:

Solo 401(k) (a.k.a. Individual 401(k) or Self-Employed 401(k))

  • Best for small business owners with no employees (other than a spouse)
  • Can contribute to the highest contribution limits, Roth available, can borrow a loan against the plan
  • 2025 contribution limits: Up to $23,500 (or an additional $7,500 if 50+ with catch-up contributions, and an additional $11.250 enhanced catch-up for those 60-63), or $70,000 for those under 50, $77,500 for those 50+, and $81,250 for those utilizing enhanced catch-ups.

Traditional 401(k) for Small Businesses

  • Best for easy management and if you eventually want to scale
  • Highly customizable, typically has wide range of investment options, supports growing teams
  • 2025 contribution limits: 2025 contribution limits: Up to $23,500 (or an additional $7,500 if 50+ with catch-up contributions, and an additional $11.250 enhanced catch-up for those 60-63), or $70,000 for those under 50, $77,500 for those 50+, and $81,250 for those utilizing enhanced catch-ups.

Roth IRA

  • Best for anyone who wants something simple but with a focus on tax savings.
  • This plan type is easy to open, low maintenance, typically has a variety of investment options, and savings grow tax-free (but you can expect lower contribution limits and income restrictions).
  • 2025 contribution limits: Individuals under 50 can contribute up to $7,000, and if you’re 50+, you can contribute up to $8,000 (which includes a $1,000 catch-up contribution)

Defined Benefit Plan (a.k.a. Pension Plan for the Self-Employed)

  • This is best for high-income earners who want to save more aggressively.
  • Has predictable retirement income, and very high tax-deductible contributions
  • This plan type is benefit-driven instead of being contribution-driven, and the maximum annual benefit is $280,000 in 2025.

How to Choose the Best Plan

It’s important to remember that there is no universal, “best plan,” for self-employed individuals, but rather a best fit depending on your circumstances. This means choosing a retirement plan that has the right features will maximize your profitability, growth plans, and tax strategy. Here’s what to consider before deciding on a plan:

Your income level and savings goal

Depending on your yearly earnings and goals, you can capitalize on contributions in different ways. Solo 401(k) plans usually allow you to save the most, especially if you have more to put into an account upfront. But, if you’re just starting out and want to set aside a smaller amount, this is where a traditional 401(k) or Roth IRA can be very helpful.

Your present (and future) tax strategy

One of your first moves should be to understand the tax bracket you’re in now and where you plan to be in the future so you can properly assess your liability and savings potential. Many self-employed retirement plans now offer a traditional, pre-tax option, which can help with lowering your taxable income. If you plan on being in a higher tax bracket later (or just want tax-free withdrawals once you’re retired), be sure to look for Roth options, which many solo 401(k) plans now have. This way, you’re getting the ultimate tax flexibility!

Desired contribution limits and flexibility

Some plans have higher contribution limits, and different contribution timing. For example, as stated earlier, a solo 401(k) allows for you to contribute as both an employee and employer, allowing you to decide how much you want to defer throughout the year. Additionally, IRAs have strict rules with annual caps, while defined benefit plans require consistent annual contributions.

Administrative complexity and management level

Deciding if you want to be more hands-on or hands-off with your retirement plan is important as different plans offer different options. Some options, like defined benefit plans, require more recordkeeping and reporting while others, like Ubiquity’s Solo 401(k), require less attention because the provider handles the heavy work for you.

What to Consider When Choosing a Retirement Plan Provider

Once you’ve explored your plan options and decided on what fits your needs best, the next step is to choose your best fit provider. The right provider will be your right-hand person with your retirement strategy, helping you stay compliant, maximize savings, and ensure your plan stays stress-free so you can reach your goals.

  • Affordability and transparency: Most plan providers have an assets under management (AUM) fee model, meaning costs can skyrocket before you know it. Look for flat, predictable pricing (like Ubiquity’s flat-fee approach) that keeps your plan affordable.
  • Easy setup and maintenance: Your provider should simplify paperwork (especially when it comes to yearly compliance requirements) and offer a seamless online experience.
  • Flexibility and customization: Having more investment options, customization choices, and even the ability to change up your contribution limits will be key to tailoring your plan to your needs.
  • Compliance support: Since you already have enough to focus on with your business, your provider should help you navigate IRS rules, deadlines, and any reporting requirements so you can stay compliant.

Final Thoughts

In 2025, there are more resources than ever for self-employed individuals to set themselves up for a secure retirement. The key is to assess your needs and goals, explore your options, and decide early so you can give yourself enough time to build up that nest egg.  

At Ubiquity, we specialize in Solo 401(k)s and small business plans that offer more cost efficiency and customizability for self-employed workers like you. With easy setup and ongoing support, you can feel confident and at ease knowing you can get back to focusing on growing your business and financial future (while we handle the retirement details).

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