401k PLAN IF YOU ARE SELF EMPLOYED OR RUN A SMALL BUSINESS

If you are self-employed and contribute to a SEP-IRA retirement account , please read on.

$66k  is the annual SEP-IRA contribution limit for 2023. The amount contributed can't be more than 20% of your net self employment income. For example, if your net is $100k, then your maximum SEP-IRA contribution would be $20k.

If you are in the position to contribute more than the 20% max, then you should consider a 401k. 401k Contribution limits are almost always more than SEP-IRA and not limited by 20%.

A 401k plan must be set up before December 31. If this interests you, best if you reach out to the brokerage firm where you currently have your sep-ira and find out their requirements about 401k setup.

If you need more information about these plans, let me know.