Self-employed workers don't get an employer 401(k) match. But they DO get access to retirement vehicles with much higher contribution limits than W-2 employees enjoy. The Solo 401(k) alone lets you stash up to $70,000 a year. Most gig workers leave a lot of this on the table because they don't know it exists.
The four main options
1. Traditional or Roth IRA
Available to everyone — employee, self-employed, or both. The simplest retirement account.
- 2026 limit: $7,000 ($8,000 if 50+)
- Traditional: pre-tax contributions (deductible if income falls within phase-out range), tax-deferred growth, taxed at withdrawal
- Roth: post-tax contributions, tax-free growth, tax-free qualified withdrawals after 59½
- Income limits for Roth (2026): phases out between $150K-$165K single / $236K-$246K MFJ. Below the phase-out, full contribution allowed.
For most gig workers in the 12-22% tax bracket, the Roth IRA wins because you don't get a huge deduction now and avoid all future taxes. Open at Fidelity, Schwab, or Vanguard with $0 minimum.
2. SEP-IRA (Simplified Employee Pension)
Employer-only contributions — but as a sole proprietor, you ARE the employer.
- 2026 limit: lesser of 25% of net SE income (computed with the SE tax adjustment) or $70,000
- Practical contribution: about 18.6% of net SE income (after the SE tax math)
- Tax treatment: pre-tax only, no Roth version
- Setup: easy, can be opened and funded by tax filing deadline (April 15 or October 15 with extension)
The SEP is the historical default for self-employed workers because it's easy to open and administer. But it loses to the Solo 401(k) at most income levels — see below.
3. Solo 401(k) (One-Participant 401(k))
For self-employed with no employees other than a spouse. The most powerful self-employed retirement vehicle.
- Employee side: $23,500 ($31,000 if 50+) — your "elective deferral"
- Employer side: up to 25% of net SE income (computed with the SE tax adjustment)
- Combined limit: $70,000 ($77,500 if 50+) in 2026
- Roth option: most providers (Fidelity, Schwab, E*TRADE) now offer a Roth Solo 401(k) — the employee side can be Roth even at any income level (no Roth IRA income limits)
Why it beats the SEP: at the same income, you contribute more to a Solo 401(k) because of the $23,500 employee deferral on top of the employer side. Plus the Roth option.
One catch: setup is more involved. Most providers want you set up by December 31 of the year you want to contribute (some providers allow January-April for the prior year, but check before assuming).
4. SIMPLE IRA
Mainly for self-employed with employees. Lower contribution limits than Solo 401(k). Rarely the right choice for a solo gig worker.
- 2026 limit: $16,500 ($20,000 if 50+) employee + 3% employer match
Skip unless you have employees.
Decision flowchart
- Saving less than $7,000/year? Roth IRA, done.
- Saving $7,000-$30,500/year and want simple? Roth IRA + Traditional/Roth Solo 401(k) for the rest.
- Saving more than $30,500? Solo 401(k) — both employee and employer contributions.
- Have employees beyond a spouse? SEP-IRA or SIMPLE IRA (Solo 401(k) disqualified).
- Got a W-2 day job that maxes your $23,500 elective deferral? Solo 401(k) employer-side only, up to 25% of net SE income, plus Roth IRA.
The tax math: real example
Sarah is a 1099 rideshare driver with $45,000 net SE income (after the mileage deduction and expenses). She wants to save $15,000 for retirement.
- Roth IRA: $7,000 contribution. No immediate tax savings.
- Solo 401(k) employee side: $8,000 of her remaining $8,000 — let's say all Traditional pre-tax.
- Federal income tax saved: $8,000 × 12% bracket = $960
- SE tax saved: $0 — Solo 401(k) contributions don't reduce SE tax (the SE tax is on net Schedule C profit, computed before the retirement deduction)
- State income tax saved (5%): $400
- Total tax saved: ~$1,360 on the $8,000 Traditional contribution
The Roth portion grows tax-free forever. The Traditional portion grows tax-deferred and is taxed at withdrawal — potentially at a lower bracket if Sarah's retirement income is lower than her working income.
Mechanics of opening and contributing
All major brokers offer self-employed retirement accounts for free:
- Fidelity: free Solo 401(k) with Roth option, $0 minimum, mailed paperwork or online application
- Schwab: free Solo 401(k) (paperwork-based), $0 minimum
- Vanguard: SEP-IRA online; Solo 401(k) requires paperwork; $0 minimum
- E*TRADE / Merrill Edge: similar to Fidelity
Avoid managed-account providers that charge wrap fees (1%+ AUM). For a long-term retirement account, even 1% in fees eats 25%+ of your final balance over 30 years.
SECURE Act 2.0 considerations
The 2022 SECURE Act 2.0 added several gig-worker-friendly provisions starting 2024-2026:
- Catch-up contributions at 60-63 boosted to 150% of normal limit (for retirement accounts where elective deferrals apply)
- Roth treatment now optional for SEP and SIMPLE IRA contributions
- Long-term part-time workers (3 years, 500+ hours/year) must be allowed into employer plans
- Auto-enrollment required for new 401(k) plans starting 2025