Comparing Solo 401k vs SEP IRA for the Self-Employed
Obviously, you need to save money for your eventual retirement, and (in my opinion) a more hopeful “Act 3″ (of a 4 Act Life), otherwise known (by me) as a
You need to utilize your retirement plan to help reduce your taxes, so you can have more money to put into #1. It’s a little bit of a chicken/egg thing I suppose.
Naturally, the financial industry has provided a host of confusing products, the research of which will probably result in your procrastination. So, I’m going to boil it down for you, and compare two standard products: the SEP IRA vs Solo 401k.
The term IRA stands for “
Individual Retirement Account
,” one of the two most standard retirement accounts that any individual can have.
stands for “Simplified Employment Plan” IRA. It’s a retirement plan that is intended for businesses, and allows participation by owners and employees.
A 401k is the other most common retirement account, but is more commonly known as a plan available to employees through their job.
(also can be referred to as an individual 401k or self-employed 401k) is available to business owners and their spouses (if involved in the business).
for more finance, business, and real estate advice
What Is a Self-Directed 401k?
How to Do Your Own Taxes (and Save some Money!)