“Remote workers without a 401(k) can secure their financial future with tax-advantaged retirement plans like IRAs, SEP IRAs, Solo 401(k)s, and SIMPLE IRAs. These options offer flexibility, high contribution limits, and tax benefits tailored to freelancers and gig workers. Understanding each plan’s features helps remote workers maximize savings and achieve a comfortable retirement.”
Retirement Savings Options for Remote Workers
Remote workers, freelancers, and gig economy participants in the USA often lack access to employer-sponsored 401(k) plans, which cover only about 67% of private industry workers according to the Bureau of Labor Statistics. However, several tax-advantaged retirement plans are available to help these workers build a robust nest egg. Here’s a detailed look at the best options, their benefits, and considerations for remote workers without a 401(k).
Traditional IRA
A Traditional Individual Retirement Account (IRA) is a versatile option for anyone with earned income, including remote workers and freelancers. In 2025, the contribution limit is $7,000, with an additional $1,000 catch-up contribution for those aged 50 and older. Contributions are typically tax-deductible, reducing taxable income in the year of contribution, and earnings grow tax-deferred until withdrawal in retirement, when they’re taxed as ordinary income. Remote workers can open a Traditional IRA at most banks or brokerages, choosing from a wide range of investments like stocks, bonds, mutual funds, or ETFs. This flexibility makes it ideal for those who want control over their investment choices. However, early withdrawals before age 59½ incur a 10% penalty plus taxes, unless exceptions apply, such as first-time home purchases or qualified education expenses.
Roth IRA
A Roth IRA is another strong choice, particularly for remote workers in lower tax brackets or those expecting higher taxes in retirement. Unlike a Traditional IRA, contributions are made with after-tax dollars, meaning no immediate tax deduction, but qualified withdrawals after age 59½ are tax-free, including earnings. The 2025 contribution limit mirrors the Traditional IRA at $7,000 ($8,000 for those 50+). Roth IRAs have income limits—$161,000 for single filers and $240,000 for married couples filing jointly in 2025—but remote workers earning below these thresholds can benefit from tax-free growth. This plan suits younger workers or those anticipating higher retirement income, as it hedges against future tax rate increases. Like Traditional IRAs, Roth IRAs offer diverse investment options, but early withdrawals of earnings (not contributions) face penalties.
SEP IRA
For self-employed remote workers or those with side gigs, a Simplified Employee Pension (SEP) IRA offers significantly higher contribution limits—up to 25% of net self-employment earnings or $70,000 in 2025, whichever is less. Contributions are made by the employer (the worker, in this case) and are tax-deductible, with earnings growing tax-deferred. SEP IRAs are simple to set up with minimal paperwork, making them attractive for freelancers or small business owners. However, if you have employees, you must contribute the same percentage for them, which can increase costs. This plan is ideal for high-earning remote workers who want to save more than IRA limits allow but don’t plan to hire extensively.
Solo 401(k)
A Solo 401(k), also called a one-participant 401(k), is designed for self-employed individuals with no employees other than a spouse. In 2025, you can contribute up to $23,500 as an employee, plus an employer contribution of up to 25% of business income, with a total limit of $70,000 (or $77,500 for those 50+ with a $7,500 catch-up). A unique feature is the ability to choose between pre-tax (traditional) or after-tax (Roth) contributions, offering flexibility to balance current tax savings with tax-free retirement withdrawals. Solo 401(k)s also allow loans and may not require IRS Form 5500 filing if assets are below $250,000, reducing administrative burden. This plan is best for high-income remote workers willing to handle slightly more complex setup and maintenance compared to a SEP IRA.
SIMPLE IRA
The Savings Incentive Match Plan for Employees (SIMPLE) IRA is suitable for self-employed remote workers or small businesses with up to 100 employees. In 2025, employee contributions are capped at $16,500, with a $3,500 catch-up for those 50+. For businesses with 25 or fewer employees, the limit rises to $17,600, with a $3,850 catch-up. Employers must either match up to 3% of salary or contribute 2% of compensation (up to a $350,000 salary cap). SIMPLE IRAs are easier to manage than Solo 401(k)s, with no discrimination testing, but contribution limits are lower. Withdrawals within the first two years face a 25% penalty, making this plan less flexible for early access. It’s a good fit for remote workers with modest incomes or those planning to hire employees.
Health Savings Account (HSA)
While not a traditional retirement plan, an HSA can supplement retirement savings for remote workers with high-deductible health plans. In 2025, contribution limits are $4,300 for individuals and $8,550 for families, with a $1,000 catch-up for those 55+. Contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free. After age 65, non-medical withdrawals are penalty-free but taxed as income, making HSAs a dual-purpose savings tool. Remote workers with high medical costs can use HSAs to cover healthcare in retirement while saving on taxes now.
Taxable Brokerage Accounts
For those maxing out tax-advantaged accounts, taxable brokerage accounts offer unlimited contributions and no withdrawal restrictions. While they lack tax benefits, they provide flexibility to invest in stocks, ETFs, or mutual funds, ideal for remote workers aiming to diversify beyond retirement-specific accounts. These accounts can bridge gaps if IRA or other plan limits restrict savings.
Annuities
Annuities provide guaranteed income in retirement, funded by lump sums or regular payments. Fixed, variable, or indexed options are available, but high fees and limited investment control make them less appealing for most remote workers. They’re best for those prioritizing guaranteed income over growth potential, though careful contract review is essential due to complexity.
Choosing the Right Plan
Selecting the best plan depends on income, tax situation, and business structure. Low-to-moderate earners may prefer Roth IRAs for tax-free withdrawals, while high earners benefit from SEP IRAs or Solo 401(k)s for higher limits. SIMPLE IRAs suit those with employees, and HSAs complement any plan for healthcare savings. Consulting a financial advisor can tailor choices to individual goals, ensuring remote workers maximize savings while minimizing taxes.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Consult a qualified financial advisor before making retirement planning decisions. Information is sourced from reputable financial institutions, government data, and industry experts.
