This is a guest article by Laurie Itkin – a financial advisor, divorce financial planner & certified divorce financial analyst (CDFA) based in San Diego, California. 

Did you leave behind a 401(k), 403(b), TSP, or pension when you started your own business? Unless you have already accrued over a million dollars in a retirement account or expect to receive hefty monthly pension payments in the future, it is imperative that you open and fund a self-employed retirement account.

You may be busy thinking about how you are going to increase revenue or obtain new clients in 2023, but that doesn’t mean you can afford to ignore saving for retirement. If you never save for retirement by making consistent monthly or annual contributions, you may never be able to retire!

As a solopreneur, you have several options to consider when opening and contributing to a retirement account. These are six of the most common types of plans:

1) Traditional IRA
2) Roth IRA
5) Solo 401(k)
6) Defined Benefit Plan

Which plan you select will depend on how much money you can sock away each year, what tax bracket you are in, and your tolerance for administrative burdens and paperwork.

When you are in your 50’s like myself, and you don’t know how much longer you will be able to sustain a successful business before burnout hits you, being able to put tens of thousands or even hundreds of thousands of dollars away in a retirement plan over several years is a huge perk. You may not know that self-employed people can sock away a lot more each year than W-2 employees.

A decade ago when I started my business,, I started with the most simple retirement plan — the Traditional IRA. As my revenue grew each year, I was able to afford to save more and also reduce how much income tax I paid to the federal and state governments. I transitioned into a SEP IRA, then a Solo 401k, and now a defined benefit plan which lets me shave more than $200,000 a year from my taxable income and deposit the money into an account where investment income can grow and compound free from immediate taxation.

By investing $200,000 each year and earning a conservative 4% annual rate of return, in 10 years that account will potentially have almost $2.5M in it.

That, combined with my previous retirement accounts when I worked for corporations, will enable me to enter my retirement years with little to worry about.

Not making much of a profit yet or can’t be bothered with administrative hassles? Opening a Traditional or Roth IRA is no more difficult than opening a bank account. And, if you have an old retirement account from a previous employer, you may be able to roll it into an IRA and consolidate two accounts into one.

In 2023 you’ll be able to contribute up to $6,500 to a Traditional or Roth IRA and if you are 50 and over, you can contribute up to $7,500.

If your business isn’t profitable but you have a spouse who has earned income, you still may be able to make a contribution.

If you are organized as an LLC, partnership or S-Corp, some of the retirement plans I previously discussed are available to you, albeit with different contribution limits and implementation. I recommend you consult with a financial or tax advisor on which type of retirement account is best for your situation.

While 2022 was the worst year since 2008 for the stock market, don’t turn your back on stocks and stock funds just yet. There has never been a 20-year period in which a diversified U.S. stock portfolio did not generate a positive return. If you are under 50, you likely have at least a 20-year time horizon for your money. And stocks are not the only thing you can invest in using an IRA. The universe of publicly-traded securities is at your disposal if you open an IRA, Solo 401k, or defined benefit plan at a major financial institution.

A 2019 study from the Pew Charitable Trusts found that only 13% of self-employed people who run a single-person business participate in a retirement plan ( Consider joining that minority group this year.

Laurie Itkin is a financial advisor, divorce financial planner, certified divorce financial analyst (CDFA), and author of the Amazon best seller, Every Woman Should Know Her Options: Invest Your Way to Financial Empowerment. She serves on the national board of directors for the Association of Divorce Financial Planners. Ms. Itkin has appeared as a guest expert on investing and financial aspects of divorce on television, radio and podcasts. She has been quoted in numerous publications including the New York Times, Wall Street Journal, San Diego Union Tribune, Chicago Tribune, Christian Science Monitor, U.S. News and World Reports, Parade, Redbook, and Forbes. Contact her at