Self-employed Retirement Plans for 2026

The IRS adjusts retirement plan contribution limits most years, and 2026 brings increases across nearly every account type available to self-employed people. Here’s a complete look at the updated limits, what’s new, and what it means for your contributions this year.

What’s New for 2026

Several limits increased for the 2026 tax year. Here’s the short version before we go deeper into each plan.

IRA contribution limit increased to $7,500. The base IRA contribution limit has increased for the first time since 2023. The catch-up contribution for savers age 50 and older also increased under SECURE 2.0’s inflation-indexing provision, rising to $1,100 above the base limit for a total of $8,600. This is the first time the IRA catch-up amount has changed since it was set in 2006.

SEP IRA limit increased to $72,000. Up from $70,000 in 2025.

Solo 401(k) employee deferral increased to $24,500. Up from $23,500 in 2025. The combined maximum also increased to $72,000 for savers under age 50.

Solo 401(k) catch-up for ages 50–59 and 64+ increased to $8,000. Up from $7,500 in 2025.

The SECURE 2.0 enhanced catch-up for ages 60–63 remains at $11,250. No change from 2025.

Traditional IRA

A Traditional IRA (Individual Retirement Account) lets you contribute pre-tax dollars, reducing your taxable income now. You pay ordinary income tax on withdrawals in retirement. Contribution limits apply across all your IRAs combined, and deductibility phases out at higher income levels if you or your spouse are covered by a workplace retirement plan.

One thing worth noting for business owners: a Traditional IRA contribution reduces your income tax, but it does not reduce your self-employment tax.

Traditional IRA at a glance
2026 contribution limit	$7,500 (under 50) / $8,600 (50+)
Tax treatment	Pre-tax; distributions taxed in retirement
Contribution deadline	Original tax return due date (April 15, 2027)
Income limits	Deductibility phases out at higher incomes
SE tax impact	None

Roth IRA

A Roth IRA flips the tax timing. Contributions are after-tax, but your account grows tax-free and qualified withdrawals in retirement are completely tax-free. The tradeoff: income limits apply, and higher earners may not be able to contribute directly. A “backdoor Roth” strategy exists for those above the threshold — consult a tax professional to determine whether that applies to your situation.

Roth IRA at a glance
2026 contribution limit	$7,500 (under 50) / $8,600 (50+)
Tax treatment	After-tax contributions; tax-free growth and distributions
Contribution deadline	Original tax return due date (April 15, 2027)
Income limits	Phase-out begins at $153,000 (single) / $242,000 (MFJ)
SE tax impact	None

SEP IRA

The Simplified Employee Pension (SEP IRA) is purpose-built for self-employed people. Unlike IRAs, the contribution limit is based on a percentage of your income, which means higher earners can save considerably more.

How that percentage is calculated depends on your structure. For Schedule C filers, it’s based on net self-employment earnings (after deducting half of SE tax), which works out to an effective rate of roughly 20%. For S Corp owners, it’s 25% of your W-2 wages — not total business income. That distinction matters: your contribution ceiling is tied directly to the salary you pay yourself, which makes the SEP IRA and your payroll decisions closely linked.

SEP IRA at a glance
2026 contribution limit	25% of compensation, up to $72,000
Tax treatment	Pre-tax; distributions taxed in retirement
Contribution deadline	Tax return due date including extensions (Oct 15, 2027 with extension)
Income limits	None
SE tax impact	Reduces income tax, not SE tax
S Corp note	Based on W-2 wages, not total business income

Solo 401(k)

The Solo 401(k) — sometimes called a one-participant 401(k) — is the most flexible and often highest-ceiling option for solopreneurs. It lets you contribute in two capacities: as an employee (through a salary deferral) and as an employer (through a business contribution). Combined, those two layers can add up to significantly more than a SEP IRA allows, particularly for S Corp owners who pay themselves a meaningful salary.

A Roth option is available at many providers for the employee deferral portion. Two deadlines matter that don’t apply to other plans: the plan itself must be established by December 31, 2026, and employee deferrals must also be made by December 31. The employer contribution can follow with your tax return.

The age 60–63 enhanced catch-up is optional for plan sponsors — confirm with your provider that your plan supports it before relying on it.

Solo 401(k) at a glance
2026 employee deferral limit	$24,500
2026 employer contribution	Up to 25% of W-2 wages (S Corp)
2026 combined maximum	$72,000 (under 50)
Catch-up (ages 50–59, 64+)	+$8,000; total $80,000
Catch-up (ages 60–63)	+$11,250; total $83,250
Plan establishment deadline	December 31, 2026
Employee contribution deadline	December 31, 2026
Employer contribution deadline	Tax return due date including extensions
Roth option	Available

2026 Plan Comparison

Not sure which plan fits your situation? Here’s how all four stack up at a glance. These limits reflect the 2026 tax year and adjust annually — verify current figures at IRS.gov before making contribution decisions.

Plan	2026 Contribution Limit	Change from 2025	Tax Treatment	Best For
Traditional IRA	$7,500 / $8,600 (50+)	+$500 base; +$100 catch-up	Pre-tax	Starting out; lower income
Roth IRA	$7,500 / $8,600 (50+)	+$500 base; +$100 catch-up	After-tax	Lower income; long time horizon
SEP IRA	Up to $72,000	+$2,000	Pre-tax	Schedule C filers; simpler administration
Solo 401(k)	Up to $72,000	+$2,000 combined max	Pre-tax or Roth	S Corp owners; higher earners

S Corp Owners: The Reasonable Compensation Connection

For S Corp owners, both the SEP IRA and Solo 401(k) employer contribution are calculated as a percentage of your W-2 wages. Higher wages increase your retirement contribution ceiling — and also increase payroll taxes. Finding the right balance depends on your income level, business expenses, and savings goals. A tax professional can help you model the tradeoffs specific to your situation.

Deadlines to Know for the 2026 Tax Year

The Solo 401(k) plan establishment deadline is the one most often missed. If you don’t have a plan open by December 31, 2026, you cannot make 2026 contributions to it — regardless of when you file your return.

Plan	Setup Deadline	Contribution Deadline
Traditional IRA	April 15, 2027	April 15, 2027
Roth IRA	April 15, 2027	April 15, 2027
SEP IRA	April 15, 2027 (Oct 15 with extension)	April 15, 2027 (Oct 15 with extension)
Solo 401(k) — plan establishment	December 31, 2026	N/A
Solo 401(k) — employee deferral	N/A	December 31, 2026
Solo 401(k) — employer contribution	N/A	March 15, 2027 (Sept 15 with extension)

Frequently Asked Questions

Can I contribute to both a SEP IRA and a Solo 401(k) in the same year?
Generally, no — not for the same business. They are both employer-sponsored plans and the combined contribution limits apply across plans. In some specific situations involving multiple income sources, different rules may apply. Consult a tax professional.

Can I contribute to an IRA and a Solo 401(k) in the same year?
Yes. IRAs and employer-sponsored plans like the Solo 401(k) are separate. You can contribute to both in the same year, subject to each plan’s income and eligibility rules.

Do Roth and Traditional IRA limits combine?
Yes. The $7,500 limit is shared across all your personal IRA accounts. You can split contributions between a Roth and Traditional IRA, but the total cannot exceed $7,500.

What is the SECURE 2.0 enhanced catch-up for ages 60–63?
Under SECURE 2.0, savers ages 60–63 can make a larger catch-up contribution to 401(k)-style plans than other age groups. For 2026, that enhanced catch-up is $11,250, compared to $8,000 for ages 50–59. Not all plan providers have implemented this feature — confirm with your provider.

Do these limits adjust every year?
Most do, based on inflation. Some limits increase in increments; others may stay flat in low-inflation years. The IRS typically announces the following year’s limits in late fall. Check IRS.gov each fall to plan ahead.

For a deeper look at how each plan works and guidance on which one fits your structure, see our full guide to self-employed retirement plans.

Collective is the all-in-one back-office platform built exclusively for solopreneurs — from bookkeeping and payroll to business formation and tax filings. Learn more about Collective.

This content is for educational purposes only and does not constitute legal, financial, or tax advice. Contribution limits reflect the 2026 tax year as announced by the IRS. Consult a qualified tax professional before making retirement plan decisions.