Saving enough for retirement is a big deal, and retirement is just as real and important for self-employed workers as it is for more conventional employees. Unfortunately, the retirement savings options for the self-employed aren't quite as obvious or automatic as they are for regular employees - whenever someone starts a new job, HR often tells them about any company-sponsored plans that are available, but there's no similar mechanism for the entrepreneur.

SEE: Plans The Small-Business Owner Can Establish

Luckily, there is a wide range of options available to those who run their own business. While some approaches are compelling in their simplicity, others allow an owner or operator to squirrel away truly considerable amounts of money for retirement. Although readers should be aware that the details and requirements of these plans can change with the tax laws, here are some of the best options available to the self-employed.

SEP IRAThe Simplified Employee Pension Individual Retirement Account (more commonly known as SEP IRA) is modeled after the IRA account and is the simplest account to establish. There are minimal Internal Revenue Service (IRS) reporting requirements and there are typically minimal restrictions on the types of investments that someone can own through a SEP IRA plan. To set up a SEP IRA, entrepreneurs need to fill out a very basic amount of paperwork with a brokerage that offers this account type.

While SEP IRAs are simple, they are not necessarily the most effective means of saving for retirement. Contributions are limited to 25% of employee wages or 20% of net earnings (before self-employment tax) of owner or operators, which works out to about 18.6% of profits. These contributions are also capped at $49,000 per year, but any contribution can be made in a lump sum at the end of the year. Employers should also note that under most circumstances they will have to contribute the same amount for employees (on a percentage basis) as for themselves, but there is no annual funding requirement.

While investors can usually roll 401(k) distributions into a SEP IRA, it is not possible to borrow against these funds and early withdrawals come with a 10% penalty in addition to regular taxes.

Individual 401(k)An individual 401(k) is more or less like what it might sound a plan for self-run businesses that closely mirrors the 401(k) plans offered by many larger companies. What is different, though, is that an individual 401(k) combines the features of a "regular" 401(k) with a profit-sharing plan. A 401(k) is relatively simple to start and there are only minimal filing requirements with the IRS until plan assets reach over $250,000 (even at which point the paperwork required is pretty simple).

To establish an individual 401(k), a business owner has to work with a financial institution, and that institution may impose fees and certain limits as to what investments are available in the plan. Some plans, for instance, may limit you to a fixed list of mutual funds (typically sponsored by that institution), but a little bit of shopping will turn up many reputable and well-known firms that offer low-cost plans with a great deal of flexibility.

The principal appeal of an individual 401(k) is that a self-employed worker can contribute more. Although the same $49,000 cap applies as with the SEP IRA, the contributions can take the form of salary deferral (up to $16,500) and "profit sharing" (up to 25% of compensation, less if the business is not incorporated) - making it much more likely that a worker can contribute the full amount.

While tax-free loans from plan assets are possible, only the self-employed and his or her spouse are eligible for such a plan.

See more here:
Hey Self-Employed, Are You Making The Most Of Your Retirement Options?