• If you are a sole proprietor, you will have to plan for your own retirement as you do not have an employer to do it for you. There are several types of accounts that you could potentially use for retirement savings. Some of the best choices for this situation are the Solo 401k and the SEP IRA.
  
  

Solo 401k

• The solo 401k is one is one of the most effective retirement plans available for the sole proprietor. Even though most people view the 401k as a retirement plan for large companies, it can also be used for individual business owners. If you only have yourself as an employee or your spouse, you can start a solo 401k. With this type of plan, you can make a large annual contribution. You can contribute as much as 25 percent of the revenue from your business and $16,500 in salary deferrals. If you are over the age of 50, you can also contribute a catch-up contribution of $5,500. This means that the maximum amount you can contribute is either $49,000 or $54,500 depending on your age. With this retirement plan, you can also borrow the funds through a 401k loan if you need to.
  
  

SEP IRA

• The SEP IRA or Simplified Employee Pension Individual Retirement Account is a type of account that many small businesses use. This type of account can also be used by a sole proprietor. With this type of account, you can contribute a maximum of $49,000 per year or 20 percent of annual income. This plan is very easy to administer and the fees are generally low. You may have a large range of investment options to choose from since it is a type of IRA.
  
  

SIMPLE IRA

• The SIMPLE IRA is another type of IRA that self-employed individuals can utilize. This type of retirement account is best for individuals who make a relatively small amount of money from their sole proprietorship but want to defer a large percentage of it for retirement. For example, if you have a regular job and you do some freelancing work on the side, this type of account could work for you. The SIMPLE IRA does not have any maximum percentage of your income that you can contribute. It does have a limit of $11,500 per year and an optional match of 3 percent of your income on top of that. This allows you to set aside more of your money than you could with other similar retirement plan options.