Solo 401(k) vs SEP IRA: Which Is Right for You?

Employee deferrals: Solo 401(k) yes, SEP IRA no
Catch-up contributions: Solo 401(k) yes ($7,500-$11,250), SEP IRA none
Roth option: Solo 401(k) yes, SEP IRA no
Loans: Solo 401(k) up to $50,000, SEP IRA not allowed

Side-by-side comparison of the two most popular self-employed retirement plans

Solo 401(k) allows employee deferrals ($23,500) plus employer contributions (25%), with catch-up options and Roth. SEP IRA is simpler: employer contributions only (25% up to $70,000), no catch-up, no Roth, no loans. Solo 401(k) typically wins for incomes under $200K.