If you’re self employed, choosing a retirement plan is likely the last thing on your mind, but it doesn’t have to be difficult. The two most popular self employed retirement plans are the SEP IRA and the Solo 401k. Both retirement plans have a maximum contribution of $52,000 for 2014 and $53,000 for 2015. The SEP IRA is the more straightforward of the two options. It has fewer fees and it’s easier to establish and maintain. The Solo 401k has a bit more red tape, and the fees tend to be higher. However, the contribution calculation may allow you to set aside more of your income. If you’re really trying to get a jump-start or play catch up on your retirement savings, the Solo 401k is the best option. But if you know you’re more likely to save by taking the path of least resistance, stick with the SEP IRA.
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