A self-employed retirement plan is a tax-deferred retirement savings program for self-employed
individuals. In the past, the term “Keogh plan” or “H.R. 10 plan” was used to distinguish a
retirement plan established by a self-employed individual from a plan established by a
corporation or other entity. However, self-employed retirement plans are now generally referred
to by the name that is used for the particular type of plan, such as SEP IRA, SIMPLE IRA,
SIMPLE 401(k), or self-employed 401(k) [also known as a solo 401(k) or an individual 401(k)].
Self-employed plans can be established by any individual who is self-employed on a part-time
or full-time basis, as well as by sole proprietorships and partnerships (who are considered
“employees” for the purpose of participating in these plans).
Unlike IRAs, which limit tax-deductible contributions to $7,000 per year (in 2025), self-employed
plans allow you to save as much as $70,000 of your net self-employment income in 2025 (up
from $69,000 in 2024), depending on the type of self-employed plan you adopt.
Contributions to a self-employed plan may be tax deductible up to certain limits. These
contributions, along with any gains made on the plan investments, will accumulate tax deferred
until you withdraw them.
Withdrawal rules generally mirror those of other qualified retirement plans. Distributions are
taxed as ordinary income and may be subject to a 10% federal income tax penalty if taken prior
to age 591⁄2, unless an exception applies. (Special rules apply to Roth accounts and SIMPLE
IRAs.) Self-employed plans can typically be rolled over to another qualified retirement plan or to
an IRA. Annual minimum distributions are required after the age of 73 (75 for those who reach
age 73 after December 31, 2032).
You can open a self-employed plan account through banks, brokerage houses, insurance
companies, mutual fund companies, and credit unions. The deadlines for setting up a
self-employed plan and for making contributions vary by plan type.
Each tax year, you may be required to fill out Form 5500, depending on the type of plan you
choose. You may need the assistance of an accountant or tax advisor, incurring extra costs.
If you earn self-employment income, a self-employed plan could be a valuable addition to your
retirement strategy. And the potential payoff — a comfortable retirement — may far outweigh
any extra costs or paperwork.
Securities offered through IFP Securities, LLC, dba Independent Financial Partners (IFP), member FINRA/SIPC Investment advice offered through IFP Advisors, LLC, dba Independent Financial Partners (IFP), a Registered Investment Advisor. IFP and Hitchcock Maddox Financial Partners are not affiliated.
Registration does not imply that the Firm is recommended or approved by the United States government or any regulatory agency. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply any level of skill or training.
IFP may only transact business or render personalized investment advice in those states and international jurisdictions where it is registered, has notice filed, or is otherwise excluded or exempted from registration requirements. The purpose of this website is for information distribution only and should not be construed as an offer to buy or sell securities or to offer investment advice. Past results are no guarantee of future results and no
representation is made that a client will or is likely to achieve results that are similar to those described. An investor should consider his or her investment objectives, risks, charges and expenses carefully before investing.
Reg BI Disclosure Supplement | Form CRS | Investor Pricing | Privacy Policy | Business Continuity Plan
IFP and Hitchcock Maddox Financial Partners are separate entities. The IFP representative associated with this website may discuss and/or transact securities business only with residents of the following states; AL, AZ, CA, CO, FL, GA, IA, MS, NC, NY, OH, OR, TN, TX, UT, VA, VT.
Securities offered through IFP Securities, LLC, dba Independent Financial Partners (IFP), member FINRA/SIPC. Investment advice offered through IFP Advisors, LLC, dba Independent Financial Partners (IFP), a Registered Investment Adviser. IFP and Hitchcock Maddox Financial Partners are not affiliated. This is for educational and information purposes only and is not research or a
recommendation regarding any security or investment strategy. Neither IFP Advisors LLC< IFP Securities LLC, dba Independent Financial Partners (IFP), nor their affiliates offer tax or legal advice. Any potential tax advantages or benefits will depend on your circumstances. Consult your tax professional and/or legal expert about your individual tax situation and visit IRS.gov to learn more.
Courtesy of Broadridge – Advisor Solutions.