Retirement Planning for Content Creators: SEP IRA, Solo 401(k), and More

SEP IRA (Simplified Employee Pension)
- Contribution limit: Up to 25% of net self-employment earnings (after deducting half of SE tax), maximum $69,000 for 2026
- Tax treatment: Contributions are tax-deductible; growth is tax-deferred; withdrawals in retirement are taxed as ordinary income
- Setup: Simple — open at Fidelity, Schwab, or Vanguard in minutes
- Deadline: Can contribute up to your tax filing deadline (April 15 or October 15 with extension)
- Best for: Creators who want simplicity and want to contribute large amounts

Solo 401(k) (Individual 401(k))
- Contribution limit: $23,500 employee contribution (2026) + up to 25% of net SE earnings as employer contribution, total maximum $69,000
- Roth option: Some providers offer Roth Solo 401(k), allowing after-tax contributions with tax-free growth
- Loan provision: Can borrow up to 50% of balance (max $50,000) from your own account
- Setup: Slightly more complex — requires plan documents
- Employee contribution deadline: December 31; employer contribution deadline: tax filing deadline
- Best for: Creators who want Roth option or loan access, or who earn less than $275,000 (Solo 401(k) allows larger contributions at lower income levels)

Traditional IRA
- Contribution limit: $7,000 (2026), or $8,000 if age 50+
- Tax deduction: Fully deductible if you have no employer plan; income limits apply if you also have a W-2 job with a retirement plan
- Best for: Supplement to SEP IRA or Solo 401(k), or for very low-income creators

Roth IRA
- Contribution limit: $7,000 (2026), or $8,000 if age 50+
- Income limits: Cannot contribute directly if MAGI exceeds $161,000 (single) — backdoor Roth conversion is an alternative
- Tax treatment: No deduction now, but growth and withdrawals in retirement are TAX-FREE
- Best for: Younger creators who expect higher tax rates in retirement

At $60,000 net profit:
- SEP IRA max contribution: ~$11,100 (25% of adjusted earnings)
- Solo 401(k) max contribution: ~$34,600 ($23,500 employee + ~$11,100 employer)
- Winner: Solo 401(k) by $23,500

At $150,000 net profit:
- SEP IRA max contribution: ~$27,800
- Solo 401(k) max contribution: ~$51,300 ($23,500 + ~$27,800)
- Winner: Solo 401(k) by $23,500

At $300,000+ net profit:
- Both approach the $69,000 maximum
- SEP IRA may reach the cap with 25% of earnings
- Solo 401(k) reaches the cap sooner due to the employee contribution component

Key differences:
- Solo 401(k) allows Roth contributions (after-tax with tax-free growth) — SEP IRA does not
- Solo 401(k) allows participant loans — SEP IRA does not
- SEP IRA is simpler to set up and maintain
- Solo 401(k) requires annual Form 5500-EZ filing once assets exceed $250,000
- Both can be opened at Fidelity, Schwab, or Vanguard at no cost

For most content creators earning $50,000-$150,000, the Solo 401(k) is the better choice because the $23,500 employee contribution allows significantly higher tax-deferred savings at moderate income levels.

Retirement contributions reduce your federal and state income tax (but NOT self-employment tax). The tax savings are immediate.

Example: Creator with $100,000 net profit, 24% federal bracket, 5% state tax
- Solo 401(k) contribution: $42,000 ($23,500 employee + $18,500 employer)
- Federal tax savings: $42,000 × 24% = $10,080
- State tax savings: $42,000 × 5% = $2,100
- Total immediate tax savings: $12,180
- Effective cost of saving $42,000 for retirement: $29,820

The money grows tax-deferred:
$42,000 invested annually at 8% average return for 20 years = approximately $1.92 million. Without tax-advantaged accounts, the same amount would grow to approximately $1.5 million (assuming taxes on dividends and capital gains along the way).

Roth vs Traditional decision:
- Choose traditional (tax-deductible) contributions if you are in a high tax bracket NOW and expect a lower bracket in retirement
- Choose Roth contributions if you are in a low bracket now and expect higher income/taxes later
- Many CPAs recommend a mix of both for tax diversification

When to start:
Now. Even small contributions compound dramatically over time. $500/month starting at age 25 grows to over $1.4 million by age 65 at 8% average return. Starting at 35, the same contribution grows to only $600,000.

Disclaimer: This is general information, not financial or tax advice. Consult a financial advisor and CPA for retirement planning specific to your situation.