This Is the Best Way To Invest for Retirement When You’re Self-Employed, According to This Ramsey Expert
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Jennifer Taylor
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Zuri Anderson
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Being self-employed doesn’t mean you can’t save for retirement. In a recent TikTok, Ramsey personality George Kamel explained the best way to put money aside for your golden years, when you don’t have an employer-sponsored plan.
If you’ve been confused by your retirement-saving options, you’re not alone. In 2025, 33 million Americans were business owners and self-employed, according to the U.S. Census.
Figuring out retirement savings on your own, without the support of an employer can be challenging, but Kamel has you covered. Keep reading to find out what he believes is the best way to invest for retirement when you’re self-employed — along with a runner-up option.
Solo 401(k)
“If it’s just you or you and a spouse, the solo 401(k) is the best bet,” Kamel said.
A one-participant plan, a solo 401(k) account is a traditional 401(k) plan that covers a business owner with no employees or a business owner and their spouse, according to the IRS. This type of plan has the same rules as a traditional 401(k) account.
Serving as both an employee and employer can offer a major benefit, according to Kamel.
“When you’re self-employed, you can put in the contribution as the employer and a contribution as the employee,” he added.
You’re able to contribute both elective deferrals of up to 100% of earned income — up to the annual contribution limit — and employer nonelective contributions, per the IRS.
In 2026, the contribution limit is $24,500 pre-tax or Roth dollars to your solo 401(k) plan as an employee, according to Fidelity. However, those ages 50 to 59 and older than 64 can add a catch-up contribution of an additional $8,000. Depending on plan guidelines, those ages 60 to 63 can make a catch-up contribution of $11,250.
From the employer side, you’re also permitted to contribute up to 25% of compensation, after Social Security and Medicare taxes are taken out, as the employer profit-sharing contribution, according to Fidelity. However, there’s limits to the amount of total compensation that determines the amount of retirement contributions.
In 2026, the annual compensation limit is $360,000, according to the IRS. This limit is per person, not per plan, so keep this in mind if you’re employed by another company and contributing to its 401(k) plan, according to the IRS.
SEP-IRA
A Simplified Employee Pension (SEP-IRA) is Kamel’s second retirement savings choice for self-employed individuals. This is available to anyone who is self-employed, owns a business or earns freelance income, according to Vanguard.
SEP-IRA contributions aren’t deductible and you’re not required to make them every year, according to Vanguard. You’re also not permitted to defer your salary to make contributions.
You can contribute up to 25% of your annual compensation to a SEP-IRA — total compensation limits change annually — according to the IRS. In 2026, the maximum contribution is $72,000, the federal agency noted.
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