Full Comparison of Retirement Accounts (Solo 401k, SEP IRA and SIMPLE IRA) for the Self-Employed

Retirement accounts such as the solo 401k plan, SEP IRA and SIMPLE IRA are popular choices for the self-employed because they are inexpensive to establish, maintain and minimum IRS reporting applies.

While businesses structured as  sole proprietorships, partnerships and corporations can qualify to open all three types of retirement accounts (i.e., solo 401k, SEP and SIMPLE), a solo 401k plan cannot be opened by state and local governments or any political subdivisions, tax-exempt organizations or business with full-time employees.

Te following charts compare all three self-employed retirement plan types  more closely.


While all three plans can be utilized by the self-employed, the solo 401k plan is more restrictive from an eligibility perspective because it can only be established by owner-only businesses. See the following chart for more on the eligibility requirements for each type of plan.

Plan Opening and Contribution Deadline

The establishment deadline for each plan type is different and contribution types and deadlines also vary. See the following chart for more.


Unlike the SEP IRA  and SIMPLE IRA where distributions can be made at anytime, distribution triggering events apply to solo 401k plans. Also, the mandatory 20% federal tax withholding rule applies to solo 401k plans but not to SEP IRAs and SIMPLE IRAs. See the following chart for more.


About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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