Short answer
If you have no full-time employees other than a spouse, pick a Solo 401(k). You get Roth contributions, a catch-up (including the $11,250 super catch-up), and plan loans. The only reason to prefer a SEP-IRA is if your paperwork tolerance is below any threshold.
The numbers
Solo 401(k) 2026: employee elective $24,500 + employer profit-share up to 25% of compensation, total $72,000. Catch-up $8,000 (50+), super catch-up $11,250 (60-63). Roth optional.
SEP-IRA 2026: employer-only, 25% of compensation, total $72,000. No catch-up. No Roth (SEP Roth was added by SECURE 2.0 but provider support is still thin in 2026).
Both land at the same $72,000 ceiling for a high-income freelancer. The Solo 401(k) gets you there on less income because the $24,500 employee portion comes off the top regardless of your profit margin.
Worked example
Freelance consultant nets $80,000. SEP limit is roughly $16,000 (25% of net after self-employment tax adjustment). Solo 401(k) is roughly $24,500 + $16,000 = $40,500. The Solo wins by $24,500 at this income level.
At $300,000 net, both plans let you hit the $72,000 cap, but the Solo still wins on Roth optionality, catch-up, and loan feature.
When SEP-IRA is the right answer
- You want a plan you can open in 20 minutes and fund by tax day.
- You have high-paid employees you'd be required to contribute for in a Solo 401(k) setup.
- You value never filing a Form 5500-EZ (required once a Solo 401(k) exceeds $250,000 in assets).
When to switch
Running a SEP today and profits are growing? Open a Solo 401(k) for next year and stop contributing to the SEP in December. You can keep the SEP balance invested; it doesn't have to be rolled.
Details for both plans are in our 2026 limits table. And see the comparison page for the full side-by-side.