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SECURE Act 2.0 for the Self-Employed

The SECURE Act 2.0 includes provisions that directly benefit self‑employed individuals, particularly those using retirement plans like SEP IRAs, SIMPLE IRAs, or solo 401(k)s. Here’s how it applies:

Key SECURE Act 2.0 Provisions for the Self‑Employed

1. Roth Options for SEP and SIMPLE IRAs

  • Self‑employed individuals using SEP or SIMPLE IRAs can now elect to make contributions on a Roth (after‑tax) basis.

  • These are known as Roth SEP IRAs or Roth SIMPLE IRAs.

  • Effective for taxable years beginning after December 31, 2022.

  • Contributions may grow tax‑free, and qualified withdrawals are tax‑free.

2. Retroactive Solo 401(k) Contributions

  • Sole proprietors can now set up a solo 401(k) in 2025 and make contributions retroactively for the 2024 tax year.

  • Includes both elective deferrals (employee contributions) and employer contributions.

  • A powerful option for maximizing tax‑advantaged savings.

3. Expanded Catch‑Up and Roth Matching Flexibility

  • Designated Roth employer contributions (matching or nonelective) are now permitted in certain plan types.

  • Provides more flexibility for structuring contributions, even if you are both employer and employee.

What It Means for the Self‑Employed

Feature

Roth SEP / SIMPLE IRA

Retroactive Solo 401(k)

Roth Employer Contributions

What It Does

After‑tax contributions with tax‑free withdrawals in retirement—no income limits.

Set up the plan in 2025 to cover 2024 contributions; maximize tax‑deductible savings.

Flexibility in how contributions are treated—expanded tax planning opportunities.

Summary

The SECURE Act 2.0 brings valuable new options for self‑employed individuals:

  • Roth contribution flexibility in SIMPLE and SEP IRAs

  • Enhanced solo 401(k) setup, including retroactive deferrals

  • Expanded Roth matching and employer contribution possibilities

These changes can significantly enhance your retirement strategy, providing greater control over tax treatment and contribution flexibility.

As a self-employed professional, it’s easy to put retirement planning on the back burner.

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