Self-employment delivers the joy of being your own boss, but are you forgetting something important — namely, a retirement plan?

Almost 70 percent of America’s 10 million self-employed fail to save regularly for retirement, and 28 percent aren’t saving anything, according to a report from TD Ameritrade brokerage.

If you run a small business, you know that the day-to-day challenges can leave little time to think about retirement. But if you want to live comfortably when you get older, you’d better get your boss — that’s you — to set up a retirement fund.

Related: Quiz: Test Your Retirement Savings Savvy

Personal finance guru David Bach urges small business owners to save something — anything — every month. As he writes in his “Finish Rich” book series, it’s a myth that you need to make lots of money in order to save. Start small, he says, even if it’s just the equivalent of a few cappuccinos a week, then gradually increase the amount you’re putting away.

But where to put it? There are a number of options to consider.

Related: 5 Things You Must Do Before You Retire

Solo 401(k)

It used to be that only large businesses could offer a 401(k), but the rules have changed. Because you can make such large contributions to it, a Solo 401(k) is a great option for self-employed people with no employees or just themselves and their spouse.

If you’re under 50, you can make a maximum employee deferral contribution in the amount of $18,000.The business can also make a 20 percent profit-sharing contribution, up to a combined maximum contribution of $53,000. If you’re 50 or older, you can put in up to $59,000..

You can also borrow from the plan, up to 50 percent or $50,000, whichever is less, according to the retirement investment company Broad Financial, but you’ll need to pay it back within 5 years. Withdrawals before age 59 ½ are subject to an additional 10 percent tax (talk with your tax advisor about exceptions).

SEP (Simplified Employee Pension) IRA

If you’re a small business owner with employees, you can use a SEP IRA to set aside retirement money for yourself and your employees, according to the Internal Revenue Service (IRS). To do so, you have to create a formal written agreement to provide benefits to all your eligible employees.

You can contribute up to 25 percent of self-employment earnings, up to $53,000 in 2015. Your employees can contribute up to 25 percent). You cannot borrow from a SEP IRA. As with a Solo 401(k), withdrawals before age 59 ½ are subject to an additional 10 percent tax.. However, the IRS will allow you to roll money from your SEP IRA into another qualified retirement plan, including ones that you can borrow from.

Related: What to Know Before Taking a Job When You're Retired


“SIMPLE” is an acronym for “Saving Incentive Match Plan for Employees.” A SIMPLE IRA is a good option if you are a small business owner who wants to help with your workers’ retirement.

To be eligible for this plan, you need to be a small business owner with fewer than 100 employees, and you’ll need to match at least 3 percent of compensation for each employee’s IRA contribution (and contribute 2 percent of an employees’ compensation even if he doesn’t contribute). You can contribute for yourself as well.

Unlike business owners using the Solo 401(k), though, you won’t be able to take a loan from this plan. Withdrawals are allowed, though as with the other plans, withdrawals before age 59 ½ are subject to an additional 10 percent tax.. There is also a hefty 25 percent tax for withdrawing money in the first two years of joining the plan.

Traditional pension plan

A pension plan, also known as a defined benefit plan, may be a good choice if you are self-employed and want to make retirement contributions that exceed that of a Solo 401(k). Such plans are subject to complex tax rules, however, so consult a tax advisor before going this route.

Roth IRA

For any small business owner, a Roth IRA delivers tax-free distributions when you start drawing down the money. There is no up-front tax deduction for contributions to a Roth IRA, however.

Your income determines whether you are eligible for a Roth. The earning limits are calculated by modified adjusted gross income minus deductions for certain expenses, known as MAGI. According to the IRS, you can contribute to a Roth IRA if your MAGI is:

  • $191,000 for married and filing jointly or if you’re a qualifying widow or widower
  • $129,000 if you’re filing as a single head of household, or married and filing separately (and you did not live with your spouse at any time during the year)
  • $10,000 for married filing separately if you lived with your spouse at any time during the year.

In a Roth IRA, your contribution limit per year is $5,500 ($6,500 if you are age 50 or older).

You can withdraw money for certain reasons (such as buying a house) within the first five years of opening a Roth IRA without penalties or taxes. For other withdrawals, you may have to pay taxes, but you won’t have a 10 percent penalty.

Mix it up

You can have a mix of plans, but remember that your overall contribution limit (for all the plans combined) is still the same. 

Whatever approach you choose, get started as soon as possible so you can look forward to peace of mind — and new adventures — as you near retirement age.

Related: What to Know Before Taking a Job When You’re Retired

Steve Evans, MA, is an award-winning journalist with more than 20 years experience in daily news, investigative, health and business journalism. Among other jobs, he has served as managing editor of the Central Virginia Newspaper Group, as a senior writer for SNL Financial and as a staff writer for The Progress Index and the Richmond Times-Dispatch.