The end of year is a good time for self employed/solopreneurs to examine ways to aggressively fund their retirement while reducing their taxable income. Here's four proven retirement concepts.. You can doublecheck with qualified financial advisor (let us know if you need a referral!).
1. 401(k) / Solo 401(k) (“Owner K”)
A great option for self-employed individuals with no employees (other than a spouse).
Why it’s attractive:
Allows large contributions (employee deferral + employer match).
Can be Roth or Traditional.
Excellent for higher-earning solopreneurs.
Very flexible and scalable.
2. SEP IRA
Also a solid option, but with an important caveat:
You must contribute the same percentage for all eligible employees, not just for yourself.
Works well for businesses with no employees, or businesses comfortable funding employee contributions.
Easy to set up and high limits, but generally less flexible than a Solo 401(k).
3. Traditional or Roth IRA
Absolutely worth maxing out annually for both the taxpayer and spouse if eligible. 2025 limits are $7000 to $8000 depending on age. And $7500 and $8500 in 2026.
Pros:
Low cost, easy to establish.
Roth IRA gives tax-free growth and tax-free withdrawals.
Traditional IRA may give a deduction depending on income and plan coverage.
4. Defined Benefit Plan (One-Person Pension)
A specialized but powerful tool for high earners who want to save aggressively.
Highlights:
Allows very large contributions, especially for older business owners.
Acts as a “pension” you fund for yourself through your business.
Requires actuarial setup and annual contributions.
Best for businesses with stable, consistent income and minimal/non-existent employees.
