I started doing freelance work a few months ago and am wondering if I can contribute to a self-employed retirement account. If so, can I contribute to a Roth IRA at the same time?
Yes to both questions. You can stash money in a retirement-savings plan if you have income from self-employment, even if you have a full-time job, too.
The two best retirement-savings options for most self-employed workers are a solo 401(k) and a Simplified Employee Pension (SEP). You can make tax-deductible contributions to either plan, and the money grows tax-deferred until retirement (you usually have to pay a 10% penalty for withdrawals before age 59½). You may be able to contribute more to the solo 401(k), but it may be easier for you to find a SEP administrator.
Yes to both questions. You can stash money in a retirement-savings plan if you have income from self-employment, even if you have a full-time job, too.
The two best retirement-savings options for most self-employed workers are a solo 401(k) and a Simplified Employee Pension (SEP). You can make tax-deductible contributions to either plan, and the money grows tax-deferred until retirement (you usually have to pay a 10% penalty for withdrawals before age 59½). You may be able to contribute more to the solo 401(k), but it may be easier for you to find a SEP administrator.
