Been thinking about retirement planning lately and wondering what other independent consultants are doing. The irregular income makes it tough to plan traditional IRAs. Anyone have experience with SEP-IRAs or solo 401k plans? Need to get serious about this while there's still time.
Retirement planning for consultants
I set up a SEP-IRA three years ago and it's been great. Can contribute up to 25% of net self-employment income, which really adds up in good years. My Alabama Power territory has been steady enough to max it out most years. Definitely worth talking to a financial advisor about.
Solo 401k might be better if you want higher contribution limits and loan options. I'm looking into that for next year since my AEP Texas client base has grown. The paperwork is more complex but the flexibility could be worth it for larger practices.