If you look at the surface, you might pick the SEP IRA because the limit is $51,000 vs. $17,500 for a 401(k), not including the over 50 provisions. If we scratch the surface, we learn that the SEP IRA is really limited to 20% of your income after a reduction for self-employment tax.

Crunch the numbers; it is the only sure way to determine which type of retirement account will allow you to contribute the most.

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