There are a lot of retirement plans out there, each designed to help you set aside money, save on your taxes, and hopefully earn a good return on your investment.
The IRS has different rules for each that make them attractive to people with different financial situations. Whenever we talk about our 401(k), members ask, "How is this different from my sister’s SEP or my acupuncturist’s IRA?" We created this comparison chart to illustrate some of the differences.
| Freelancers Retirement Plan | Solo 401(k) | SEP IRA | IRA | |
|---|---|---|---|---|
| Who's Eligible | Members with 1099-MISC | Sole proprietors | Sole proprietors | Anyone - except some individuals participating in a qualified plan |
| Max. Individual Contribution |
$16,500 | $16,500 |  |
$5,000 |
| Max. Profit-Sharing Contribution |
Lesser of 25% earned income or $49,000 minus any individual contributions | Lesser of 25% earned income or $49,000 minus any individual contributions | 25% of compensation (if you're an employee of your own corporation) up to $49,000; 20% of self-employment income (if self-employed) up to $49,000. | |
| Max Catch-Up Contribution (50+) |
$5,500 | $5,500 | |
$1,000 |
| IRS Reporting |
Milliman files Form 5500, if required | You or your accountant or Third Party Administrator (TPA) files Form 5500-EZ, if required | |
|
| Roth Option |
 |
 |
|
|
| Investment Minimums |
None | Generally $1,000–$5,000 per fund | Generally $1,000–$5,000 per fund | Generally $1,000–$5,000 per fund |
| Asset Allocation/ Investments |
Easy to allocate within our vetted lineup of funds that are monitored on an on-going basis by an investment advisor. | Must choose and monitor your own assets. Must meet the minimum dollar requirement for each fund. | Must choose and monitor your own assets. Must meet the minimum dollar requirement for each fund. | Must choose and monitor your own assets. Must meet the minimum dollar requirement for each fund. |
| Administration | Freelancers Union and Milliman | You and your accountant/TPA | You and your accountant | You and the plan provider (for example, Vanguard) |
| Fees |
One time application fee ($40) $11 monthly charge Mutual fund management fees (fees are typically less than the funds available to you as an individual) 3 basis point trustee fee taken monthly |
Hourly fees of your accountant/TPA for setup and administration (typically $1,000–$3,000 per year) Mutual fund management fees |
Hourly fees of your accountant for setup and administration Mutual fund management fees |
Mutual Fund management fees May be a front- or back- end load charge depending on funds chosen Institution administration fee if any |
| Contribution Method |
Automatic yet flexible monthly debits from your checking account, and/or Lump-sum by check twice a year |
Non-automated, by check | Non-automated, by check | Non-automated, by check |
| Monitoring | Milliman makes sure you do not exceed allowable contributions |
You are responsible for compliance with IRS regulations Your accountant and/or financial planner may help |
You are responsible for compliance with IRS regulations |
You are responsible for compliance with IRS regulations |