SEP IRA vs Solo 401(k) vs SIMPLE IRA Calculator

Your numbers

Net self-employment profit

Age

Highest contribution

Best plan for you

We adjust net profit for the deductible half of self-employment tax, then apply each plan's rules for 2026: a SEP-IRA and the employer side of a Solo 401(k) allow about 20% of adjusted profit; a Solo 401(k) adds an employee deferral of 24,500 (8,000 catch-up at 50+, 11,250 at ages 60 to 63); a SIMPLE IRA allows a 17,000 deferral (4,000 catch-up at 50+, 5,250 at ages 60 to 63) plus a 3% employer match. SEP and Solo 401(k) totals are capped at 72,000 plus any catch-up. Estimates only; confirm with a tax advisor.

About this calculator

SEP IRA vs Solo 401(k) vs SIMPLE IRA in 2026

Updated October 2026 · 2026 contribution limits

If you work for yourself, you have three main retirement plans to choose from, and they can allow very different amounts. This calculator works out the most you can put in each one in 2026 from your net self-employment profit and age. With the defaults, $120,000 of profit at age 45 allows $22,304 in a SEP-IRA, $46,804 in a Solo 401(k) and $20,346 in a SIMPLE IRA.

How each plan's limit works

SEP-IRA: an employer contribution of about 20% of your net self-employment earnings after the deduction for half of self-employment tax, up to $72,000 in 2026. No catch-up contributions.
Solo 401(k): the same 20% employer contribution plus an employee deferral of up to $24,500, with an $8,000 catch-up at 50 or older ($11,250 at ages 60 to 63). The total is capped at $72,000 plus catch-up.
SIMPLE IRA: an employee deferral of up to $17,000 ($4,000 catch-up at 50+, $5,250 at 60 to 63) plus a 3% employer match.

Which plan allows the most

Net profit	Age	SEP-IRA	Solo 401(k)	SIMPLE IRA
$60,000	45	$11,152	$35,652	$18,673
$120,000	45	$22,304	$46,804	$20,346
$250,000	55	$46,468	$78,968	$27,970
$400,000	61	$72,000	$83,250	$33,050

The Solo 401(k) wins at almost every income because the employee deferral sits on top of the employer share. The gap is largest at lower incomes: at $60,000 of profit, a SEP allows about $11,000 while a Solo 401(k) allows more than three times as much. At very high incomes both hit the $72,000 cap, and the Solo 401(k) keeps its edge only through catch-up contributions.

Choosing between them

Solo 401(k) suits a business with no employees other than a spouse who wants the highest limit. Many providers offer a Roth option for the deferral. Once plan assets pass $250,000, you file Form 5500-EZ each year.
SEP-IRA is the simplest: no annual filing and you can open and fund it up to your tax deadline, including extensions. It suits high earners near the $72,000 cap or anyone who wants minimal paperwork. If you hire employees, you must contribute the same percentage for eligible staff.
SIMPLE IRA is designed for small businesses with employees who want a low-cost plan with employee deferrals. For a solo business, it usually allows less than a Solo 401(k).

If you also have a 401(k) at a day job, the $24,500 employee deferral limit is shared across all your 401(k) plans, so contributions there reduce what you can defer into a Solo 401(k). The employer share is separate.

Related calculators

The self-employment tax calculator shows the tax that drives the profit adjustment. If you run an S corporation, contributions are based on your W-2 salary instead; the S-corp salary calculator helps set it. For very high earners who want to save more than $72,000, see the cash balance plan calculator.

Frequently asked questions

What is the Solo 401(k) contribution limit for 2026?

Up to $72,000 in total, made of a $24,500 employee deferral plus an employer contribution of about 20% of net self-employment earnings. Those 50 and older can add an $8,000 catch-up, or $11,250 at ages 60 to 63.

What is the SEP-IRA limit for 2026?

About 20% of net self-employment earnings after the self-employment tax deduction, up to $72,000. There are no catch-up contributions in a SEP.

Is a Solo 401(k) better than a SEP-IRA?

For most self-employed people with no employees, yes, because the employee deferral lets you contribute much more at the same income. A SEP is simpler and works well near the $72,000 cap or when you want no annual filings.

Can I have a SEP-IRA and a 401(k) at work?

Yes. A SEP is funded by your business, so it doesn't share the employee deferral limit with a workplace 401(k).

Can my spouse join my Solo 401(k)?

Yes, if your spouse earns income from the business. That can roughly double the household's contributions.

Sources: IRS Notice 2025-67 (2026 limits). Calculations reduce net profit by the deductible half of self-employment tax and apply a 20% employer rate, capped at the $360,000 compensation limit. Estimates only; confirm with a tax professional.