The IRS raised SEP IRA and Solo 401(k) limits again for 2026. If you've been doing this a while, that extra room is worth a real look before your next estimated payment.
The IRS announced its 2026 retirement plan limits back in November, and if you've had a SEP IRA or Solo 401(k) running for a few years, the numbers are worth a second look. The overall limit for both a SEP IRA and a Solo 401(k) climbs to $72,000 for 2026, up from $70,000. The Solo 401(k) employee deferral piece goes to $24,500, up from $23,500. Traditional and Roth IRA limits rise to $7,500. And if you're 50 or older, the 401(k) catch-up is now $8,000 — or $11,250 if you're between 60 and 63, thanks to the SECURE 2.0 enhanced catch-up window.
Early on, most freelancers are just trying to remember to set money aside at all. A few years in, the question changes — it's less "should I save for retirement" and more "am I actually using the room I have." That's the gap this update opens up a little wider. If you've been contributing the same dollar amount out of habit for the last couple of years, this is a natural moment to check whether that number still matches what the limits — and your income — actually allow.
It's also a good moment to revisit which account you're using in the first place. A SEP IRA is simple and funds entirely from the business, but a Solo 401(k) lets you contribute as both "employee" and "employer," which can mean more room at the same income level, plus a Roth option some SEP IRAs don't offer. If you set your plan up years ago and haven't compared the two since, the math may have shifted.
Pull your year-to-date net self-employment income and run it against the new limits for whichever plan you have — SEP IRA, Solo 401(k), or both if you're weighing a switch. If there's meaningful room you haven't been using, decide now whether to increase what you're setting aside before your September 15 estimated payment, rather than trying to catch up all at once in December.
Which account makes sense, how much you can actually contribute, and whether a Solo 401(k) is worth setting up this late in the year depends on your entity structure, your income, and what you've already contributed in 2026 — this genuinely does depend on your specific situation rather than a one-size-fits-all answer. This is general, educational information, not a recommendation for your account. If you're weighing a real contribution decision, that's worth running past someone who can look at your actual numbers.
Retirement contributions are exactly the kind of decision that's easy to put off and then rush at the last minute. If you want a calm, guided way to look at your whole tax picture — not just this one number — The Calm & Confident Tax Prep Kit walks you through it step by step. Or start smaller with the free Mid-Year Tax Reset and see where you actually stand in one sitting.
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