At some point in the life of every entrepreneur, they have dreamed of starting their own business. When that newly minted entrepreneur moves away from corporate employment and into the Wild West of self-employment, he takes full responsibility for his financial destiny. Gone are the days of contributing to a matching company 401k plan.

These small business owners are now responsible for establishing and contributing to their retirement plan. According to a recent TD Ameritrade survey, 7 out of 10 self-employed people don’t save regularly (if at all) for retirement. I recently spoke with Heather Banks, a Certified Financial Advisor at First Bank Wealth Management in Asheville, NC. Heather shared with me her impressions of how retirement savings have changed over the years. “For too many years, American citizens have relied on Social Security benefits to fund their retirement. Social Security simply isn’t able to fully fund a retirement with a realistic expectation of maintaining the lifestyle they became accustomed to during their lifetimes. years of work. It is vital that small business owners take advantage of the retirement benefit options available to them and work with financial professionals (financial advisors, accountants, etc.) to determine which option is most beneficial for them.”

There are several programs that a self-employed person can use to help them achieve their retirement goals.

SEP IRA (Simplified Employee Pension Plan) is a retirement plan that allows the self-employed or individual entrepreneurs to make pre-tax donations. It is a plan similar to a traditional IRA. However, it allows you to have a much higher level of contribution. This type of program is one of the easiest to open and maintain. Most banks and investment firms can help you open and maintain this type of account. With this plan, you can contribute up to 25% of your net earnings from self-employment. The contribution limit for 2015 is $53,000. The deadline to open an account is April 15 following the fiscal year.

ROTH IRA It is a retirement plan in which the contributions you make are not deductible in the year the contributions are made, yet they grow tax-free and are not taxed when withdrawn. The maximum contribution in 2015 is $5,500 if you are under 50 years of age and $6,500 if you are over 50 years of age. These amounts begin to phase out for high income earners earning $116,000 (single/head of household) and $183,000 (married). The deadline to open an account is April 15 following the fiscal year.

SIMPLE IRA Plan (Employee Savings Incentive Matching Plan) it is a deferral of the compensation plan. It’s easy to open and maintain with banks and investment firms, but note that it has a lower contribution limit. This plan is good for businesses where the owners have other sources of income, as it allows them to reserve a higher percentage of the profits. You can put all of your net earnings from self-employment into the plan up to $12,500 in 2015 through salary reductions. If you’re over 50, you can increase your donations by $3,000. The employer can also contribute up to 3% of the worker’s contribution. This plan is best for self-employed individuals with fewer than 100 employees. The deadline to open an account is October 1.

Tea ONLY 401(k) Plan it is easy to open and requires little maintenance. It is designed for businesses without employees, and therefore the program is only available to the owner and their spouse. This plan follows the same rules and requirements as any other 401(k) plan. You can take salary deferrals of up to $18,000 in 2015 plus an additional $6,000 if you’re over age 50. If you hire employees and they meet the plan’s eligibility requirements, you must include them in the plan and their elective deferrals will be subject to nondiscrimination testing. The deadline to open the account is December 31. The program must file an annual report with the IRS if it has $250,000 or more in assets at the end of the year.

For more information on each of these plans, I recommend that you contact your local Certified Public Accountant and Certified Financial Planner. They will be able to help you choose which plan is best for you. I agree with Dave Ramsey, who said, “I believe that through knowledge and discipline, financial peace is possible for all of us.”