Comprehensive Guide
Learn more in our Personal Finance Guide.
How it works
solo 401(k) vs sep ira calculator takes your inputs and produces solo 401(k) max contribution, sep ira max contribution, solo 401(k) tax savings, sep ira tax savings, solo 401(k) at retirement, sep ira at retirement. Compare contribution limits, tax savings, and retirement projections between Solo 401(k) and SEP IRA for self-employed individuals. You provide 4 inputs: Self-Employment Income (currency, in dollars) (default: 150000 dollars); Marginal Tax Rate % (percent, in percent) (default: 24 percent); Annual Return % (percent, in percent) (default: 7 percent); Years to Retirement (number) (default: 20). The calculator returns 6 outputs: Solo 401(k) Max Contribution (the primary result); SEP IRA Max Contribution (a secondary output); Solo 401(k) Tax Savings (a secondary output); SEP IRA Tax Savings (a secondary output); Solo 401(k) at Retirement (a secondary output); SEP IRA at Retirement (a secondary output). Personal finance decisions trade off today's comfort against tomorrow's security. The numbers behind that trade-off — how much to save, spend, borrow, or insure — are what this calculator makes concrete. Rather than rules of thumb, it gives you the actual arithmetic for your situation so you can compare options side by side and decide with confidence. With the default values, solo 401(k) max contribution is computed from the interaction of every input field — change any one of them and the result updates immediately, so you can stress-test different scenarios without re-entering the whole form. Adjust the inputs to match your real financial situation. The defaults are realistic starting points, but every person's circumstances differ — your actual income, expenses, rates, and timelines will produce a different answer. Use the tool iteratively: start with the defaults, then change one variable at a time to see which factor has the largest impact on your outcome.Tips
- Start with the default values to see a baseline result, then change one input at a time to understand which factor matters most for your outcome.
- Replace every default with your actual number — estimates and rules of thumb produce estimates, not answers. Pull your real figures from pay stubs, statements, or account dashboards.
- Run the calculation for both an optimistic and pessimistic scenario — the range between them is the realistic band you should plan around, not the single point estimate.
Frequently asked questions
What is the difference between Solo 401(k) and SEP IRA?
Solo 401(k) allows employee + employer contributions (up to $69,000 in 2024), while SEP IRA only allows employer contributions (up to 25% of compensation, max $69,000). Solo 401(k) also allows Roth contributions and loans.
How accurate are the calculator results?
The math is exact — the same formulas a financial professional would use by hand. The precision of the output depends entirely on how realistic your inputs are. Use your actual numbers rather than estimates when possible. The defaults are reasonable starting points, but your real income, rates, and timeline will produce a different result.
What should I enter for self-employment income?
Enter your actual self-employment income value. The default of 150000 dollars is a common starting point, but replace it with your real figure for an accurate result.