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[Correction appended

Are you part of the gig economy or some other kind of self-employed freelancer?

Are you like me, someone who spent decades stashing money into employer-sponsored 401(k) plans, but now works for himself?

If so, you might want to take a look at a retirement savings plan that most people have never heard of: a Solo 401(k). If you meet the requirements and have self-employment income in the five-digit range, a Solo 401(k), also known as an Individual 401(k), lets you set aside lots more money than the far-better known SEP-IRA does.

Now, you have to leap through several hoops — including filing with the IRS for an employer number — to go the Solo route. But if you can afford to save rather than spend some or all of your self-employment income, it’s well worth going Solo.

If you’ve never heard of Solo Ks, don’t feel bad. You’ve got plenty of company—including, until recently, me. I’ve written about investing and financial topics for almost 50 years, and thought I knew how retirement plans worked. But I had never heard of Solos until my long-time accountant, Carl Schwartz, president of RRBB Asset Management LLC of Maplewood, N.J., told me about them earlier this year.

This year is the first time since the 1960s that I’ve not been part of an employer-sponsored retirement plan, and Schwartz figured it was time to teach his old-dog client a new trick.
“This is perfect for someone like you,” he told me, because I’m in a relatively high tax bracket this year, and have no immediate need of the cash that my freelance labors produce.

There are strict limits on who can qualify for a Solo plan. The business has to consist of only you, or you and your spouse. If you work for an employer with a retirement plan but also do freelance work—say you’re a corporate employee by day and an Uber driver in your off hours—things get very complicated, and you may not be eligible.

In some states, money you put into a Solo isn’t deductible for state income tax purposes. So make sure to keep careful track, possibly for decades, of how much of your own money went into your Solo. That will allow you to exclude some of your Solo withdrawals from state tax when you take money out.

Given all these obstacles, plus others that I haven’t mentioned, why would anyone bother getting an employer number from the IRS and leaping through the other hoops?
I’ll tell you why I did it: money. I’ll be able to put a lot more (federally deductible) money into my Solo than into my SEPs.

Here’s a specific example. If you have $40,000 of self-employment income after expenses, you can put only $7,435 into a SEP-IRA. But you can put much more-- $25,435 ($31,435 if you’re 50 or older)—into a Solo.

These numbers, by the way, come from my accountant, Carl Schwartz. I kept trying to calculate them myself, but kept getting them wrong. So unless you’re sure you know what you’re doing, ask an expert for help or get the right software to figure out how much you can stash in a Solo.

Both SEPs and Solo contributions max out at $53,000 a year ($59,000 for people over 50).
The bottom line: Once you leap through the hoops, there’s no downside and lots of upside to opening a Solo 401(k) if you qualify. I’ve gone Solo, you might want to do so, too.

Correction: A previous version of this article mistakenly reported that contributions to a Solo IRA aren’t deductible from New Jersey state income taxes; in fact, they are deductible from New Jersey income taxes.