If you think working as a freelancer limits your ability to contribute to a tax-advantaged retirement plan, think again. Independent contractors have a variety of investment plan options that can help them save for retirement. Consult an accountant before opening starting plan. Review your long-term financial goals and you'll be well on your way to enjoying a more secure retirement.

A simplified employee pension plan is free and easy to set up at most banks and investment companies. Independent contractors can establish a solo k account. However, solo k plans typically cost more money to set up and maintain than SEP accounts.

Retirement Plan Options for Independent Contractors | News OK

Defined-benefit plans are the most complicated and expensive to establish and administer. They are also the least flexible and require minimum contributions, which a financial planner will calculate for you. The primary appeal of a defined-benefit plan is its guaranteed payout, which account owners begin receiving at retirement. In addition, you can make large contributions to the plan -- a useful feature if you're making enough money.

Not every independent contractor makes enough money to warrant setting up a solo k or a defined-benefit plan. If you want to contribute more than 25 percent of your income, consider establishing a simple IRA.

Whichever plan you choose, start saving early. The earlier in life you invest, the more secure your retirement could be.

Lisa Bigelow is an independent writer with prior professional experience in the finance and fitness industries. She also writes a well-regarded political commentary column published in Fairfield, New Haven and Westchester counties in the New York City metro area.

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These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm. Visit performance for information about the performance numbers displayed above. Skip to main content. More Articles Funding Limits for Qualified Retirement Plans Do TSP Contributions Affect an IRA? Paying off the Mortgage Vs.

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Investing Pretax Dollars How Much Should I Have in My IRA When I Retire? Can Anyone Start a Roth IRA? Criteria for Determining IRA Beneficiaries. Simplified Employee Pension A simplified employee pension plan is free and easy to set up at most banks and investment companies.

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Solo k Independent contractors can establish a solo k account. Defined-Benefit Plans Defined-benefit plans are the most complicated and expensive to establish and administer.

Simple IRA Not every independent contractor makes enough money to warrant setting up a solo k or a defined-benefit plan. References 3 Beacon Capital Management Advisors: Independent Contractor Retirement Plans Nolo: Retirement Plans for the Self-Employed IRS: Self-Employed Individuals Tax Center. Being a Consultant, Freelance, or Contractor: Photo Credits paperwork image by Bruce Shippee from Fotolia. About the Author Lisa Bigelow is an independent writer with prior professional experience in the finance and fitness industries.

Retirement Investing Options for Contractors and the Self-Employed - CESI

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