SEP IRA vs Solo 401(k)

2026 contribution limits — drag to explore by income

Net income $120,000

Age 50+ (catch-up eligible)

SEP IRA max 25% rule

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Solo 401(k) max employee + employer

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SEP IRA

Solo 401(k)

Your income

How this works: SEP IRA = 25% of net SE income (after ~7.65% SE tax deduction), capped at $72,000. Solo 401(k) adds an employee deferral ($24,500 / $32,500 if 50+) on top, capped at $72,000 or $80,000 if 50+.

Disclaimer: Educational purposes only. Consult a tax professional for advice specific to your situation.