• Color
  • Price
  • Reliability
  • Easy to get


  • No charger
  • Left handed use only
  • Supports only Apple products
  • Low storage
Battery life

As more people find themselves working independently in freelance, consultant, or entrepreneurial roles, they enjoy certain advantages, such as autonomy, pursuing a passion, or freedom from routine. But one benefit they’re missing is a 401k plan.

Not familiar with this perk? It’s an employer-sponsored retirement vehicle that allows employees to sock away pre-tax dollars, lowering their taxable income at the same time that they are building a nest egg.

Well, if you find yourself without this option, you’re not alone. In fact, about 34 percent of the total U.S. workforce—or 53 million Americans—are independent workers, and this number is expected to surge to 50 percent by 2020. Having a plan for how you’ll fund your retirement is key—unless you want to work well into your golden years and miss those early-bird specials with your pals.

“Don’t assume you’re out of luck if you don’t have a job that provides retirement benefits,” says Cameron Huddleston, Life + Money columnist for GOBankingRates. “There are plenty of ways to save if you are self-employed.

If you are your own boss

“If you’re self-employed or have a small business, you can contribute 25 percent of compensation—up to a maximum of $54,000 for 2017 and $55,000 for 2018 — to a (Simplified Employee Pension Plan),” Huddleston explains.

Wondering where to begin? Huddleston suggests setting up an account with an investment firm, such as Fidelity, T. Rowe Price, and Vanguard. You have until the due date of your tax return in April to open and fund an SEP.

Long-term benefit: Contributions to an SEP are tax-deductible and grow tax-deferred. “So whatever amount you set aside in this account is basically sheltered from income taxes until you withdraw it in retirement,” she says.

If you want to bank a bundle

“You can potentially set aside even more with a solo 401k because you act as both employee and employer,” Huddleston says.

“As an employee (even though you’re self-employed), you can contribute up to $18,000 in 2017 and $18,500 in 2018. On top of that, you can contribute 25 percent of compensation as a business owner (sole proprietor). However, combined contributions can’t exceed $54,000 for 2017 and $55,000 for 2018.”

Long-term benefit: Like with an SEP, contributions to a solo 401k are deductible. So, you can reduce your taxable income at tax time by saving in a solo 401k. This plan allows you to contribute more at lower income levels than with an SEP because you can set aside a percentage of income and an employee contribution.

If you wish to pay taxes later

An individual retirement account (IRA) allows those under the age of 50 to defer paying income tax on as much as $5,500 annually (those older can contribute up to $6,500).

Income tax on these funds won’t be collected until you withdraw from the account, at which time you may find yourself in a lower tax bracket because you’re retired. You will be required to take a minimum distribution (RMD) at age 70½, and at that time all withdrawals will be taxed at ordinary income rates.

Long-term benefit: You might be thinking, how will I ever be able to afford to retire by contributing just $5,500 per year? Look at it like this: If you put away $5,500 each year and receive an average annual return of 6 percent, within 20 years, you’ll find yourself with $214,460 in your IRA. (Only more of a reason to start now…)

If you wish to pay taxes upfront

While Roth IRAs and their traditional counterparts have the same contribution limits, they’re taxed differently. With a traditional IRA, you’re deferring paying income tax until you withdraw from the account. With a Roth IRA, you’re putting away after-tax dollars. When you decide to withdraw the funds, including earnings from investments, it’s all tax-free — so long as you’ve held the account for five years, and you’re at least age 59½ — or a special exception applies.

Long-term benefit: Unlike traditional IRAs, Roth IRAs are RMD-free. This means your money can continue to grow (and grow!) tax-free until you’re ready to tap it. If your investments take a downturn and you’d prefer to ride it out rather than sell at a loss, you have that option because you’re not held to that required minimum distribution.