Retirement plans for self-employed?

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PawPrint53
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Retirement plans for self-employed?

Postby PawPrint53 » Wed Jul 11, 2012 9:04 am

My DH may become an independent contractor once he leaves his corporate job. So he'll be getting 1099s from various companies if he decides to go this way. I'm curious what kind of retirement plan is available for people who are independent contractors. Is that considered self-employment even though the person gets paid by a company?

DoingHomework
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Re: Retirement plans for self-employed?

Postby DoingHomework » Wed Jul 11, 2012 9:13 am

PawPrint53 wrote:My DH may become an independent contractor once he leaves his corporate job. So he'll be getting 1099s from various companies if he decides to go this way. I'm curious what kind of retirement plan is available for people who are independent contractors. Is that considered self-employment even though the person gets paid by a company?


It's self employment. He'll need to pay self employment taxes.

He can probably set up a SEP IRA or possibly other types of retirement plans.

Tightwad
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Re: Retirement plans for self-employed?

Postby Tightwad » Wed Jul 11, 2012 10:20 am

SEP IRA's would be my first choice also. There is such a thing as a self directed 401K but I don't know much about them.

GregC
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Re: Retirement plans for self-employed?

Postby GregC » Thu Aug 09, 2012 11:06 pm

This was a few years ago, but J.D. mentioned on the blog that he had a 401(k) for himself, as his only employee. I commented asking about the SEP IRA and he sent me an email explaining his decision and how he ended up with the 401(k).

He discussed it with his accountant and then set one up at Fidelity. He mentioned that the branch he used had employees who were very helpful with setting that up. He seemed to think that 401(k) made the most sense for one self-employed individual with no employees.


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