Article | 1:48 min read

Retirement Options for the Self-Employed

Life Events

A business owner looking at retirement options

Working for a company often comes with benefits such as health care, stock options and a retirement plan. If you have started your own business and are self-employed, that situation is a bit different. With a big company, you have access to a human resources department where you can ask questions about your retirement concerns. This can be beneficial to helping you set up an account for your golden years, but you can still sign up for a plan even if you don't work for a huge company. Here are a few retirement options you can pick if you're self-employed:


Many employees are offered this type of retirement plan, and it is available even if you're self-employed. This is designed for individuals, which can be helpful if you have employees, because you don't need to contribute or match anything for them. With a 401(k), you're allowed to contribute up to 25 percent of your net earnings from your salary, but, as of 2020, this cannot exceed $57,000.

Savings Incentive Match Plan for Employees

A SIMPLE individual retirement is a bit more complex than its name implies, but it is not as complicated as other options. Whether you run your business on your own or you have a number of employees, you can sign up for a SIMPLE IRA. If it's just you setting up a retirement account, you can contribute all of your net earnings with a cap of $13,500. Having employees makes this situation a bit more complicated, as you must match up to 3 percent of their earnings.

Simplified Employee Pension

A SEP is available if you have employees, but be aware that you have to contribute money to their accounts with this option. Your contributions can be up to 25 percent of your net earnings, topping out at a maximum of $57,000.

Social Security

You also have another option ready to help when you enter retirement: Social Security. What you receive in retirement is determined by how much you made during your career. Delaying your retirement may mean that you can collect more Social Security when you want to call it quits at the end of your career.


The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its subsidiaries and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.