10/26/2026
The retirement plan question almost always shows up the same way.
The CPA says it's time to put some money away. Somebody mentions a SEP-IRA. Somebody else mentions a solo 401(k). The two get compared on one number, whichever lets you put more in, and an account gets opened.
That number rarely decides it.
What decides it is whether you have employees, whether you'll have them soon, and what the account runs into three years from now.
A solo 401(k) is built for an owner-only business, meaning you and a spouse who works in the business. Hire an eligible employee and the plan has to become a conventional 401(k) or come to an end.
A SEP-IRA works with or without employees. But you generally have to contribute the same percentage of pay for every eligible employee that you take for yourself. Fund a large percentage for your own account and you've committed to that percentage across the payroll.
And if you use a backdoor Roth, a SEP-IRA balance counts in the pro-rata calculation. A solo 401(k) doesn't.
None of that makes the SEP the beginner option. It's simple, contributions can change year to year, and it can generally be set up and funded up to your business filing deadline, including extensions. For the right owner it's a sound answer.
The problem is choosing either one without checking what it touches.
I wrote up how to actually decide.
https://cinderwealth.com/sep-ira-vs-solo-401k-buford-ga/
Which one are you using right now, and do you remember why you picked it?
General education, not advice about your situation.