Adam Jewell - Search & Affiliate Marketing

Being self employed has lots of unique financial challenges. Health insurance, having to foot the bill for everything you need and handle everything that comes up. When it comes to saving for retirement, however, you as a self employed individual have some awesome opportunities!

When you work for a company, you may or may not be able to participate in a 401K offered by the company. You can usually save up to about 15% of your pre-tax salary in a 401K but the percentage will vary by company and 401K plan. (Ever wonder why your 401K balance doesn’t seem to go anywhere?) For the 2007 tax year, the most you can put in your 401K is $15,500. If your company is nice, they’ll give you some kind of match that my have to vest over a period of time before it is actually yours to keep.

If you have any self employment income whether you have a regular job or not, you can also contribute to a SEP IRA. That’s right you can participate in an employer sponsored retirement plan as well as a SEP! Unlike traditional IRAs and ROTH IRAs for which the contribution limit is $4,000 for 2007 and $5,000 for 2008 for those under 49 ($5,000 and $6,000 respectively for those 50 and up) you can put up to $45,000 or 25% of your income into your SEP for the 2007 tax year.

Between a SEP and an employer sponsored 401K you could sock away about $60,000 in your retirement accounts and get a HUGE tax deduction for 2007. If you make enough to max out a SEP, well, ya don’t really hae any need for a job. So whether you are an affiliate or self employed in any other capacity, be sure to take advantage of the huge contrbutions you can make to a SEP IRA in 2007!

Though it requires more paperwork, you can also do a solo 401K. Between the employer and employee contributions you can often have much lower income that is needed for a SEP to put around $40,000 away each year tax free.