Self-Employed Retirement Plan Calculator 2025
Compare SEP IRA, Solo 401(k) and SIMPLE IRA contribution limits and tax savings for self-employed individuals. Find the best retirement plan for your income.
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After business expenses, before SE deduction
2025 limits: SEP $69K • Solo 401k $69K • SIMPLE $16.5K
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SEP IRA Max Contribution
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Solo 401(k) Max Contribution
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SIMPLE IRA Max Contribution
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Max Tax Saving (Best Plan)
Plan Comparison
| Plan | Max Contribution | Tax Saving | After-Tax Cost |
|---|
How to Use This Self-Employed Retirement Calculator
Enter your net self-employment income and marginal tax bracket. The calculator shows the maximum contribution allowed to each plan and how much you save in taxes by making those contributions. All contributions to SEP IRA, Solo 401(k) traditional, and SIMPLE IRA reduce your taxable income dollar-for-dollar.
The Formula
SE Tax Deduction = Net SE Income Γ 0.9235 Γ 0.153 Γ· 2 (approx 7.065%)
Net SE for SEP = Net SE Income β SE Tax Deduction
SEP IRA = Min(Net SE for SEP Γ 25%, $69,000)
Solo 401(k) Employee = Min(Net SE Income Γ 0.9235, $23,500) [+$7,500 age 50+]
Solo 401(k) Employer = Min((Net SE β SE Deduction β Employee Deferral) Γ 25%, $69,000 β Employee)
Solo 401(k) Total = Employee + Employer
SIMPLE IRA = Min(Net SE Income, $16,500) [+$3,500 age 50+]
Tax Saving = Contribution Γ Marginal Rate
Net SE for SEP = Net SE Income β SE Tax Deduction
SEP IRA = Min(Net SE for SEP Γ 25%, $69,000)
Solo 401(k) Employee = Min(Net SE Income Γ 0.9235, $23,500) [+$7,500 age 50+]
Solo 401(k) Employer = Min((Net SE β SE Deduction β Employee Deferral) Γ 25%, $69,000 β Employee)
Solo 401(k) Total = Employee + Employer
SIMPLE IRA = Min(Net SE Income, $16,500) [+$3,500 age 50+]
Tax Saving = Contribution Γ Marginal Rate
Example
Alex, consultant, $100,000 net SE income, age 40, 22% bracket:
SE tax deduction: ~$7,065
SEP IRA: ($100,000 β $7,065) Γ 25% = $23,234
Solo 401(k): $23,500 employee + ~$18,734 employer = ~$42,234
SIMPLE IRA: $16,500
Solo 401(k) tax saving at 22%: $42,234 Γ 22% = $9,292/year
SE tax deduction: ~$7,065
SEP IRA: ($100,000 β $7,065) Γ 25% = $23,234
Solo 401(k): $23,500 employee + ~$18,734 employer = ~$42,234
SIMPLE IRA: $16,500
Solo 401(k) tax saving at 22%: $42,234 Γ 22% = $9,292/year
Extended
Retirement Plan Contribution Comparison
Side-by-side comparison of SEP IRA, Solo 401(k) and SIMPLE IRA at different income levels
See how contribution limits and tax savings compare at different income levels for each plan.
| Net SE Income | SEP IRA | Solo 401(k) | SIMPLE IRA | Solo 401k Advantage |
|---|
Plan Feature Comparison
| Feature | SEP IRA | Solo 401(k) | SIMPLE IRA |
|---|---|---|---|
| 2025 Contribution Limit | $69,000 | $69,000 ($76,500 w/ catch-up) | $16,500 ($20,000 w/ catch-up) |
| Employee Deferral | No | Yes ($23,500) | Yes ($16,500) |
| Roth Option | No | Yes (Roth 401k) | No |
| Loans Allowed | No | Yes | No |
| Employees Allowed | Yes | No (self only) | Yes (up to 100) |
| Setup Complexity | Simple | Moderate | Moderate |
| Establish Deadline | Tax return due date | Dec 31 | Oct 1 |
| Best For | High income, simple | Moderate income, flexibility | Has/plans employees |
Frequently Asked Questions
Which retirement plan is best for self-employed individuals?
It depends on your income and goals. A SEP IRA is easiest to set up and allows contributions up to 25% of net SE income (max $69,000 for 2025). A Solo 401(k) allows higher contributions at lower income levels ($23,500 employee deferral + 25% employer) and adds a Roth option. A SIMPLE IRA ($16,500 limit) has lower contribution limits but is easier to administer if you have employees.
How is the SEP IRA contribution limit calculated for self-employed?
For self-employed individuals, the SEP IRA limit is 25% of net self-employment income after deducting the SE tax deduction. The effective rate on net SE income before the deduction works out to approximately 18.587% (not exactly 25%) because of the self-referential nature of the calculation. The maximum contribution is $69,000 for 2025.
What is the Solo 401(k) catch-up contribution for 2025?
If you are age 50 or older, you can make an additional $7,500 catch-up contribution to the employee deferral portion of your Solo 401(k) in 2025, bringing the employee contribution to $31,000. The total Solo 401(k) limit (employee + employer) remains capped at $69,000 (or $76,500 with catch-up) for 2025.
Can I contribute to a Solo 401(k) and an IRA in the same year?
Yes. Solo 401(k) contributions do not affect your ability to contribute to a traditional or Roth IRA, subject to the separate IRA limits ($7,000 for 2025, $8,000 if age 50+). However, your ability to deduct traditional IRA contributions phases out if your income exceeds certain thresholds when you participate in a workplace retirement plan.
What is the deadline to establish and contribute to these plans?
SEP IRA: Can be established and funded up to your tax return due date including extensions (typically October 15). Solo 401(k): Must be established by December 31 of the tax year to make contributions. SIMPLE IRA: Must be established by October 1 of the plan year; employee deferrals cannot be contributed after this date for the current year.