What is a SEP IRA or SIMPLE IRA for self-employed people?

SEP and SIMPLE IRAs are tax-advantaged retirement accounts designed for self-employed people and small businesses. A SEP IRA lets you contribute up to 25% of net self-employment income, with a 2025 cap of $70,000 – far above the standard IRA limit – making it powerful for high-earning freelancers and 1099 contractors. A SIMPLE IRA suits small businesses with employees, allowing employee deferrals up to $16,500 in 2025 (plus a $3,500 catch-up at 50+) with required employer contributions. Both are easy to open at major brokerages with minimal paperwork. Note that SEP and SIMPLE balances count in the pro-rata rule, so they can complicate backdoor Roth strategies. If you're self-employed, also compare a solo 401(k). Explore options at wealthserene.com/tools/self-employed-hub.