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Not everyone has access to a 401(k) through their employer, but that doesn't mean you can't build a solid retirement nest egg! Not everyone has access to a 401(k) through their employer, but that doesn't mean you can't build a solid retirement nest egg. According to Northwestern Mutual's 2025 Planning & Progress Study, Americans believe they need $1.26 million to retire comfortably. The good news? There are five excellent retirement account options that can help you reach that goal, even without employer-sponsored retirement benefits. Why This Matters Now Recent research shows that starting at age 20 and saving just $330 per month can get you to that $1.26 million target by age 65 (assuming a 7% annual return). However, if you wait until age 40, you'll need to save $1,547 per month to reach the same goal. The message is clear: the earlier you start, the less you'll need to contribute each month. Option 1: Traditional IRA and Roth IRA – The Foundation Best for: Most individuals seeking straightforward retirement savings Traditional and Roth IRAs are the simplest retirement accounts to open and understand. For 2025, you can contribute up to $7,000 annually, or $8,000 if you're age 50 or older. Traditional IRA A Traditional IRA offers immediate tax benefits. You contribute pre-tax dollars, receive a tax deduction (if you qualify based on income limits), and your money grows tax-deferred. You'll pay taxes on withdrawals in retirement. 2025 Tax Deduction Phase-Out Ranges:
Roth IRA A Roth IRA works differently: you contribute after-tax dollars, but your money grows completely tax-free. Even better, Roth IRAs have no required minimum distributions (RMDs), giving you more flexibility in retirement. 2025 Roth IRA Income Phase-Out Ranges:
Option 2: SEP IRA – For the Self-Employed and Small Business Owners Best for: Self-employed individuals, freelancers, and gig workers earning consistent income A Simplified Employee Pension (SEP) IRA allows much higher contribution limits than traditional IRAs. In 2025, you can contribute up to 25% of your compensation or $70,000, whichever is less. New in 2025: Roth SEP IRA A major development is the introduction of the Roth SEP IRA option. This combines the high contribution limits of a SEP with the tax-free growth benefits of a Roth account. Setup: SEP IRAs are extremely simple to establish with minimal administrative requirements and low fees. Important Note: If you have employees, you must contribute the same percentage of compensation to their SEP IRAs as you contribute to your own. Option 3: Solo 401(k) – Maximum Flexibility for the Self-Employed Best for: Self-employed individuals or business owners with no full-time employees (except a spouse) A Solo 401(k) offers the highest contribution potential for self-employed individuals. In 2025, you can contribute up to $70,000 if you're under 50, or $77,500 if you're 50 or older. There's even an enhanced catch-up provision for those aged 60-63, allowing contributions up to $81,250. How It Works You contribute as both employee and employer:
Solo 401(k) vs. SEP IRA The Solo 401(k) offers several advantages over a SEP IRA:
Option 4: SIMPLE IRA – For Small Businesses Best for: Businesses with fewer than 100 employees seeking a low-cost retirement benefit Despite the name, SIMPLE (Savings Incentive Match Plan for Employees) IRAs aren't necessarily the simplest option. For 2025, employees can contribute up to $16,500, with an additional $3,500 catch-up contribution if you're 50 or older. Key Limitations Required employer matching: Employers must either:
Why It's Less Popular The SIMPLE IRA has lower contribution limits than SEP IRAs and Solo 401(k)s, making it less attractive for aggressive savers. It's primarily useful for small businesses that want to offer retirement benefits but aren't ready for the complexity of a traditional 401(k) plan.  Action Steps: Getting Started Today
If You're Just Beginning Start with a Traditional or Roth IRA. You can open an account online in minutes with most major brokerages. Don't overthink it – you can always change strategies later. You can even convert a Traditional IRA to a Roth IRA if circumstances change. If You're Younger or Have Lower Income Prioritize a Roth IRA. The tax-free growth potential and flexibility make it ideal for those in lower tax brackets who expect their income to rise over time. If You're Self-Employed Evaluate your income level:
Remember: You're Not Locked In One of the most important things to understand is that you can change your mind. You can:
The Power of Starting Early Let's put the numbers in perspective. Using Northwestern Mutual's calculations with a 7% annual return:
Common Questions Answered Can I contribute to both an IRA and a SEP IRA? Yes, but there are limitations. Your SEP IRA contribution limit is separate from your personal IRA limit, but be aware of income restrictions for Traditional IRA deductions if you're also covered by a workplace retirement plan. What if I start a business later? You can roll your existing IRA into a Solo 401(k) or SEP IRA when you establish self-employment income. This gives you access to higher contribution limits. Do I need to max out my contributions?No. Any contribution is better than none. The key is to start now and increase your contributions as your income grows. Even $100 a month at age 25 can grow to over $200,000 by age 65. What about required minimum distributions (RMDs)? Traditional IRAs, SEP IRAs, and Solo 401(k)s all require you to start taking distributions at age 73. Roth IRAs do not have RMDs during your lifetime, making them excellent for estate planning. Getting Professional Help Retirement planning can be complex, especially when you're self-employed or have multiple income sources. Consider working with a financial advisor who can help you:
The Bottom Line Not having access to a 401(k) is no longer an excuse to delay retirement savings. Between Traditional and Roth IRAs, SEP IRAs, Solo 401(k)s, and SIMPLE IRAs, there's an option that fits virtually every situation. The most important step is to start now. Time is your greatest asset when it comes to compound growth. Whether you begin with a simple Roth IRA contributing $50 a month or dive into a Solo 401(k) maximizing $70,000 annually, the key is to take action today. Your future self will thank you for the decision you make right now. Work With Award-Winning Fiduciary Advisors At Jazz Wealth, we specialize in helping individuals and families navigate their retirement planning journey with confidence. As fiduciary advisors recognized by USA Today and Newsweek for our expertise, we're legally and ethically bound to put your interests first—always. Whether you're just starting your retirement savings journey or you're self-employed and maximizing complex account options like SEP IRAs and Solo 401(k)s, our team provides personalized guidance tailored to your unique situation. We don't believe in one-size-fits-all solutions or high-pressure sales tactics. Instead, we take the time to understand your goals, answer your questions, and build a comprehensive financial plan that goes beyond just retirement. Ready to take control of your financial future? Visit us at jazzwealth.com or give us a call to schedule a no-obligation conversation. We're here to help you build the retirement you deserve. Comments are closed.
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