Retirement
Nobody is matching your contribution. So the ceiling is yours to find.
There is no HR portal, no default enrolment, and no payroll deduction doing this quietly in the background. What there is instead is a set of accounts built for exactly your situation, and a number you are allowed to put in each of them.
See What You Can ContributeFour accounts, described plainly.
These are not ranked. Which one fits depends on how much you earn, whether anyone works for you, and whether you would rather take the tax break now or later. All four are listed with the same detail so you can tell.
Roth IRA
Individual
- Annual ceiling
- $7,000.00Shared across both IRAs combined.
- Who it fits
- Earnings inside the income limit, and a preference for paying the tax now.
- Tax now
- No deduction. Contributions are made after tax.
- Tax at withdrawal
- Qualified withdrawals are not taxed.
- Income limits
- Phases out from $150,000.00, then closes entirely at $165,000.00 when single. Filing jointly, from $236,000.00 to $246,000.00.
- Setup difficulty
- Lowest. Opened online in minutes.
- Can you have employees
- Not applicable. It is your personal account.
- Roth option inside itMost people do not know this one
- It is the Roth.
Traditional IRA
Individual
- Annual ceiling
- $7,000.00Shared across both IRAs combined.
- Who it fits
- Anyone with earned income, particularly if a deduction this year is worth more than one later.
- Tax now
- Deductible, though the deduction can be limited.
- Tax at withdrawal
- Withdrawals are taxed as ordinary income.
- Income limits
- None on contributing. The deduction phases out if a workplace plan covers you.
- Setup difficulty
- Lowest. Opened online in minutes.
- Can you have employees
- Not applicable. It is your personal account.
- Roth option inside itMost people do not know this one
- No.
SEP IRA
Employer plan
- Annual ceiling
- $70,000.00Or about 20% of adjusted earnings, whichever is lower.
- Who it fits
- Higher earners who want a large ceiling with very little administration.
- Tax now
- Deductible as a business expense.
- Tax at withdrawal
- Withdrawals are taxed as ordinary income.
- Income limits
- None.
- Setup difficulty
- Low. A short plan document, no annual return until the plan is large.
- Can you have employees
- Yes, but eligible employees must generally receive the same percentage you take.
- Roth option inside itMost people do not know this one
- No.
Solo 401(k)
Employer plan
- Annual ceiling
- $70,000.00Deferral plus profit sharing, combined.
- Who it fits
- Higher earners willing to file more paperwork in exchange for the highest ceiling at moderate income.
- Tax now
- Deferrals reduce taxable income, unless you choose the Roth option.
- Tax at withdrawal
- Taxed as income, or untaxed on the Roth portion.
- Income limits
- None.
- Setup difficulty
- Highest. A plan document, an EIN, and an annual return once assets pass a threshold.
- Can you have employees
- No. It is for you and a spouse in the business. Hiring usually ends it.
- Roth option inside itMost people do not know this one
- Yes. Deferrals can be made as Roth.
That last row is worth sitting with. A Solo 401(k) is not the opposite of a Roth. It can contain one. If you are over the Roth IRA income limit, the Roth deferral inside a Solo 401(k) has no income limit at all.
What you could put in, based on the income you've logged.
Every figure below is an estimate. Nothing here is saved, and nothing is sent anywhere. Inside Hatchly this reads the income you have logged for the year. On this page you enter it yourself.
Roth IRA
$0.00
Inside the income limit
Traditional IRA
$0.00
Shared ceiling with the Roth IRA.
SEP IRA
$0.00
A share of adjusted net earnings.
Solo 401(k)
$0.00
Deferral $0.00 plus profit sharing $0.00.
An IRA ceiling can never exceed what you earned, so at no income the answer is nothing rather than the statutory maximum.
Three things this connects to.
Your ceiling moves as you log income.
These are not fixed numbers you work out once in January. Every payment you record changes what you are allowed to contribute, and the figure follows it.
Roth eligibility is checked against your actual number.
The income limit is the one that catches people, because you cross it during the year and find out the following April. Checked against income you have already logged, you find out while you can still do something about it.
Money set aside for retirement is not money available for taxes.
Both come out of the same profit. The reserve screen shows what you owe against what you have put by, so a contribution does not quietly eat the money you were holding for a quarterly payment. See what to set aside for taxes.
Where these accounts are actually held.
Hatchly does not open, hold, or manage any of these. You open the account directly with a custodian. The list below is alphabetical and is not a recommendation. One line each on what is factually different about them.
- Charles Schwab
- Offers all four account types including a Solo 401(k) with a Roth deferral option. Branch network for in-person help.
- E*TRADE
- Offers all four, including a Solo 401(k). Part of Morgan Stanley.
- Fidelity
- Offers all four. Its Solo 401(k) has historically not supported Roth deferrals, which matters if that was your reason for choosing one.
- Vanguard
- Offers all four. Known for its own index funds; the Solo 401(k) has its own plan administration.
- Specialist Solo 401(k) providers
- Firms that only administer Solo 401(k) plans, typically charging a setup and annual fee in exchange for features the large brokerages leave out, such as loans or wider investment choice.
No link on this page is a referral link. If that changes, the disclosure will appear next to the link itself and not in the small print. Availability and features change, so confirm with the custodian directly.
The questions that come up first.
Can I have more than one type of account?
Yes. An IRA and an employer plan are separate buckets, so you can pay into a SEP or a Solo 401(k) and an IRA in the same year. The two IRAs share one ceiling between them, so splitting across a Roth and a Traditional does not raise it. You also cannot run a SEP and a Solo 401(k) at the same time for the same business without the combined limit applying.
What happens if I put in too much?
Excess contributions are penalised for every year they stay in the account. Withdraw the excess and the earnings on it before your filing deadline and the penalty is generally avoided. This is the reason to check the figure during the year rather than after it.
Do I have to contribute every year?
No. None of these require an annual contribution. A SEP and a Solo 401(k) let you decide the amount each year, including nothing, which is what makes them workable on income that moves.
My income swings hard year to year. Does that break this?
No, and it is the case these accounts handle best. Your ceiling is calculated from that year's earnings, so a strong year allows a large contribution and a thin year allows a small one or none. Nothing carries forward and nothing is owed.
When is the deadline?
IRA contributions for a tax year can generally be made up to the filing deadline the following April. Employer plans differ: a SEP can usually be funded up to the filing deadline including extensions, while a Solo 401(k) generally has to exist before the end of the tax year even if it is funded later. Confirm the dates for your situation.
I have a 401(k) from a W-2 job as well. What changes?
The employee deferral limit is yours, not each plan's, so deferrals to a workplace 401(k) and a Solo 401(k) count against one shared limit. The employer profit-sharing portion is separate and still available on your self-employed income. Being covered by a workplace plan also affects whether your Traditional IRA contribution is deductible.
What if I earn too much for a Roth IRA?
The Roth deferral inside a Solo 401(k) has no income limit, which is why that row in the table above matters. There are also other routes that depend on the accounts you already hold. This is the point at which the question is worth putting to a tax professional rather than a web page.
Does Hatchly open the account or move the money?
No. Hatchly never holds or moves money, and it is not an IRA custodian, a broker-dealer, or an investment adviser. It tells you what your income says your ceiling is. You open the account yourself, with a custodian, and you make the contribution yourself.
Hatchly is not an investment adviser, broker-dealer, or IRA custodian. This page is educational. Contribution figures are estimates based on the income you've logged and are not tax or investment advice. Confirm your eligibility and limits with a tax professional before contributing.