Everyone knows that saving for retirement is important. But when you’re doing it by yourself, the responsibility and decision-making can feel overwhelming.
Without a company-sponsored 401(k) to take advantage of, how are you supposed to decide what kind of plan you should open, what investments you should choose, and how much you should contribute?
Keep reading to learn more about saving for retirement when you’re not traditionally employed.
How to Save for Retirement
One of the biggest questions that most people have is: how much should I be saving for retirement?
A basic rule of thumb is to save between 10% and 15% of your salary. If you’re married or have a partner, then use the total household income figure for how much you should save.
But when you’re a small business owner or a contract worker, your income can vary from month to month. This can make it hard to set aside a set amount.
First, determine how much you need to save every month to meet your retirement goals. There are many factors to consider when coming up with this figure. I recommend meeting with a financial planner to figure out what your monthly savings rate or amount should be.
When you earn more than the baseline amount, you can set aside extra funds for retirement. That can offset slow periods when you’re not able to stash as much away. Every quarter, go through and see if you’re still on track for your annual retirement and investing goals.
If You’re a 1099 Employee…
Whether you earn money as a rideshare driver or a contract employee, you probably receive a 1099 at the end of the year instead of a W-2.
That means you’re not eligible for a 401(k) or 403(b). However, you can still open and contribute to an Individual Retirement Account (IRA). An IRA is one of the easiest types of investment accounts to open.
For 2025, the annual contribution limit is $7,000 or $8,000 a year if you’re 50 or older. There are two types of IRA accounts: Roth and traditional.
A Roth IRA lets you withdraw funds tax-free in retirement; however, you cannot receive a tax deduction for any contributions. A traditional IRA lets you deduct contributions, but you’ll have to pay taxes on withdrawals in retirement.
You can open both a Roth and a traditional IRA; just make sure you stay under the annual limit for both.
A general rule of thumb is that Roth IRAs may be better for younger professionals, while traditional IRAs may be better for those who are already established in their careers.
If You’re a Small Business Owner…
Of course, small business owners are also eligible for IRAs (both Roth and traditional) just like anyone else with earned income.
But small business owners also have the following options.
Self-employed 401(k)
This option is only available for those who don’t employ anyone else except for a spouse. If you have other employees, then you can’t open a self-employed 401(k).
In 2025, the annual contribution limit is up to $70,000 or 100% of the employee’s salary, whichever is lower. This is one of the highest limits among all retirement plans. For those 50 or older, the annual limit is between $77,500 and $81,250, depending on your age.
SEP IRA
A SEP IRA is one of the better options for individual business owners or solopreneurs. If you have fewer than 5 employees, you can open a SEP IRA. A SEP IRA has a high annual contribution limit – up to $70,000 in 2025 or 25% of your total compensation.
If you do have other employees, you have to contribute the same percentage to their SEP as you do to yours. Another downside is that only employers can contribute to SEP IRAs; employees cannot put their own money in. Also, all SEP IRAs are traditional IRAs; there is no Roth option.
SIMPLE IRA
Like SEP IRAs, the annual limit for a SIMPLE IRA is higher than it is for a regular IRA.
If you’re a small business owner with 100 employees or less, you can open a SIMPLE IRA. Unlike a SEP IRA, employees can also make contributions to this plan.
In 2025, the annual contribution limit for employees is $16,500. If you’re between 50 and 59 or 64 or older, you can also contribute an extra $3,500 per year. For those between 60 and 63, you can contribute an additional $5,250 per year.
Employers can decide to either match employee contributions, up to 3% of their salary, or contribute 2% of their salaries, whether or not they contribute themselves.
If You’re a Stay-at-home Parent…
Spousal IRA
Many stay-at-home parents assume that they’re not eligible for retirement plans in their own name. But fortunately, that’s not true.
One of the best options for stay-at-home moms is a spousal Individual Retirement Account (IRA).
If your spouse has earned income, you can open a Spousal IRA even if you technically don’t have income in your own name.
The annual contribution limit for spousal IRAs is the same, $7,000 or $8,000 a year if you’re 50 or older.
Just like other IRAs, spousal IRAs also come in Roth or traditional forms.
Families with stay-at-home parents will often choose to max out the working parent’s 401(k) or IRA, but it’s important to have an IRA in your own name. This ensures that you have control over what you’re investing in and how much you’re stashing away, instead of relying on your partner to be responsible.
You can open a spousal IRA at the same investment company that holds your partner’s IRA or with an entirely different company.
Taxable Brokerage Account
Individuals who don’t receive income are also eligible to open a taxable brokerage account. The main downside is that you won’t receive any tax breaks, either this year or later on.
There is no limit on how much you can contribute to a taxable brokerage account. Also, you won’t pay a penalty for withdrawing funds before a certain age. However, you will still have to pay capital gains taxes on any withdrawals.
If reading this article left you wanting to dig deeper and get more answers to questions like: which plan is actually best for you, how much you should really be saving, or what the heck compound interest even means in practice, then we’ve got you covered.
Join us for our Members Only September Lunch + Learn: Build Your Wealth: Financial Empowerment for Women on Sept. 24 from 12–1 p.m. Financial experts Vicki Hall and Zina Kumok will break down the basics of budgeting, saving, and investing, then open the floor for discussion and Q&A so you can get the answers that matter most to you. This is your chance to turn all that “should I, could I, how do I?” financial stress into real clarity and confidence. If you are not currently an Indy Maven member and would like to attend, join here.
Zina Kumok is a financial advisor at C.H. Douglas & Gray Wealth Management. As a personal finance writer, she has been published in Bankrate, Investopedia and Salon. She is also a financial wellness speaker and is available for engagements.
A former newspaper reporter, she has covered everything from murder trials to the Final Four. If you’re interested in financial planning services, reach out at zkumok@chdouglas.com.
* C.H. Douglas & Gray is a registered investment adviser. Information presented is for educational/informational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
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