1. Solo 401(k) (a.k.a. Individual 401(k))

Best for: Self-employed individuals and business owners with no employees (other than a spouse)

Tax benefit: Contributions are fully deductible, reducing taxable income

2025 limit:
  • Up to $23,000 employee deferral (if under 50)
  • Plus $7,500 catch-up if 50 or older
  • Plus employer profit-sharing up to 25% of compensation
  • Total limit: Up to $69,000 (or $76,500 if age 50+)

Other details:
  • Can make both employee and employer contributions
  • Can be Roth or Traditional
  • Great for high-income earners

2. SEP IRA (Simplified Employee Pension)
Best for: Freelancers, consultants, and business owners (especially with no or few employees)

Tax benefit: Contributions are tax-deductible business expenses

2025 limit:
  • Up to 25% of compensation, up to $69,000

Other details:
  • Simple to set up
  • No annual filing requirements
  • Must contribute equal % for eligible employees
  • No Roth version

3. Traditional 401(k)

Best for: Employees or business owners with W-2 income and access to a plan

Tax benefit: Contributions reduce W-2 taxable income

2025 limit:
  • $23,000 employee deferral
  • $7,500 catch-up (age 50+)
  • Plus employer match (not taxed to employee)

Other details:
  • Tax-deferred growth
  • Employers can deduct matching contributions
  • Withdrawals taxed later at ordinary income rates

4. Traditional IRA

Best for: Anyone with earned income

Tax benefit: Contributions may be deductible depending on income

2025 limit:
  • $7,000 (under 50)
  • $8,000 (age 50+)

Other details:
  • Tax deduction if income below phase-out limits
  • Deduction phases out if covered by a workplace plan

2025 income phase-out for deduction (if covered by a plan):
Single: $77,000–$87,000
Married filing jointly: $123,000–$143,000

5. Defined Benefit Pension Plan

Best for: High-income self-employed professionals (doctors, lawyers, consultants)

Tax benefit: Contributions are fully deductible and can be $100,000+ per year

Contribution depends on:
  • Age
  • Income
  • Years until retirement

Max annual benefit at retirement (2025):
$275,000

Other details:
  • Massive tax deductions possible
  • Best for people nearing retirement
  • Requires actuarial support
  • Complex and higher admin costs

6. HSA (Health Savings Account)

Best for: Anyone with a High-Deductible Health Plan (HDHP)

2025 limit:
  • Individual: $4,300
  • Family: $8,550
  • $1,000 catch-up (age 55+)

Triple tax benefit:
  • Contributions are deductible
  • Growth is tax-free
  • Withdrawals for medical expenses are tax-free

  • Acts like a stealth retirement account
  • No income limits
  • No required distributions at 70½ or 72