Enjoying the show? Support our mission and help keep the content coming by buying us a coffee: https://buymeacoffee.com/deepdivepodcastBeing self-employed offers incredible freedom, but it comes with a massive catch: retirement planning is entirely on you, with no HR department in sight. A stunning 70% of freelancers have zero long-term savings for retirement. If you're in that 70%, take a breath—you are not alone, and we are going to fix it starting right now.
Independent workers face a perfect storm: wildly inconsistent income, no company 401(k) and the painful 15.3% self-employment tax. The traditional 9-to-5 retirement plan simply doesn't work for us. Fortunately, there are powerful and flexible plans built specifically for the freelance world.
We zero in on the big three secret weapons for your future:
Solo 401(k): The heavy hitter for a business of one. The magic here is the dual contribution: you contribute as the employee and your business adds a profit-sharing contribution as the employer, allowing you to turbocharge your savings (up to $70,000 for 2025). Crucially, it offers the popular Roth option (pay taxes now, withdraw tax-free later) and the option to borrow in a pinch.
SEP IRA: The Simplified option. Contributions are made only by the employer (still you) into a special IRA. While it also allows high contribution limits, it's simpler to set up, but lacks the Roth and loan options of the Solo 401(k).
Traditional / Roth IRA: The bedrock for everyone. The big choice is whether to pay taxes now (Roth, 100% tax-free withdrawals later) or later (Traditional, tax break now). Either way, the money grows without being hit by annual taxes. This is the easiest and most powerful way to get the ball rolling, with a limit of $7,000 for 2025.
We simplify the choice between the big guns:
Have non-spouse employees? Lean towards the SEP IRA.
Want tax-free growth later (Roth)? Go for the Solo 401(k).
Want the option to borrow in an emergency? Go for the Solo 401(k).
Need the absolute simplest setup? The SEP IRA is usually the winner.
Information is useless without action. Here is the five-step plan to turn confusion into a secure future:
Find Your Number: Use an online calculator to set a concrete retirement target.
Separate Your Money: Get a business checking account to save headaches.
Pick Your Weapon: Choose your best account (Solo 401k, SEP, Roth/Traditional IRA).
Automate It: Open the account and set up automatic transfers immediately, even if it's just $50 a month. Start the habit.
Talk to a Pro: A quick call with an accountant or financial advisor is worth the peace of mind.
It is easy to feel defeated by the 70% statistic, but the most powerful thing you can do for your future self is to just start. Forget yesterday—the second best time is right now.
Choosing Your Weapon: A Simple Decision TreeYour 5-Step Launchpad to Action