Americans working for themselves, whether full time or as a side pursuit, has become a lot more mainstream in 2026. While freelancers, contractors, real estate agents, content creators, and online sellers all have different workflows, what they share is a personal responsibility to plan for retirement. Unlike W-2 earners, no employer is helping set that up for them.The list of tax-advantaged accounts available to someone with self-employment income runs long, spanning IRAs and Roth IRAs, SEPs, SIMPLEs, and solo 401(k)s, and each one carries its own limits, deadlines, and tax treatment. Sorting through them is where a lot of would-be savers stall out. And while this is especially relevant for self-employed Americans, even corporate workers—especially those with side hustles—face difficult decisions on how to best save for retirement.In a recent video on his YouTube channel, Mark J. Kohler, a CPA and attorney, walked through the exact order he believes savers should use and warned that treating the choice casually can be expensive.”I’ve got a strategy to share with you and it’s not that complicated, but it requires you to kind of go through this decision tree with me,” Kohler said.Why the wrong plan costs self-employed saversThe audience that can benefit from Kohler’s advice is sizable, as roughly 1 in 3 Americans keep a side hustle, and more than 45 million people report side-hustle, 1099, or small-business income, according to figures he cited in the video.Kohler noted that all of it counts as self-employment when it comes to retirement accounts, no matter whether the work runs through an LLC, an S corporation, or no entity at all.Someone can also keep a workplace 401(k) at a day job while opening a second plan for their side income, a distinction Kohler emphasized for people who assume they are limited to one account. In Kohler’s telling, the problem is that the sheer breadth of options tends to stall people instead of moving them forward.More on retirement and investment accounts:Fidelity, Vanguard have a warning for anyone taking RMDsDave Ramsey warns Americans on 401(k)s, IRAs (he’s not wrong)Americans get blunt message on early retirement”They hear about Roth IRAs, traditional IRAs, SEPs, SIMPLEs, solo 401(k)s, and suddenly it becomes alphabet soup,” Kohler said.That paralysis is the mistake quietly draining Americans’ retirement savings, as the cost goes beyond suboptimal returns or missed time.”The wrong retirement plan can quietly drain tens of thousands of dollars from your future through missed tax benefits, lower contribution limits, and years of lost growth,” Kohler said.Instead of simply giving his recommendation for the best retirement account, Kohler laid out his five exact steps for optimal retirement planning. The right path, in many cases, depends on how a particular individual conducts business.
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The five-step order for retirement account planningKohler’s remedy for the alphabet soup is to rank the accounts rather than weigh them all at once. The first step, and the one he presses hardest, is a straightforward IRA funded on a yearly basis.”But before we talk about anything else fancy, I want you to fund your IRA every year,” Kohler said.He favors a Roth over a traditional IRA, paying tax on the money going in so that the growth and later withdrawals come out untaxed, and he said the argument only gets stronger the younger the saver is. Married couples can each contribute, and a non-earning spouse’s IRA can be funded off the other partner’s income. The 2026 IRA limits Kohler cites come directly from the IRS, and are $7,500 for savers under 50 and $8,600 for those 50 and older, or roughly $625 a month under 50.”In my opinion, 99% of the time, the Roth wins,” Kohler said.Step two is to self-direct the IRA so it can hold assets beyond the standard menu. Step three adds a health savings account. Step four, reserved for owners with no qualifying employees, is a solo 401(k). The 2026 solo 401(k) figures Kohler cited allowed an employee deferral of up to $24,500, an $8,000 catch-up at 50 and older, and a company match of 25% of profit or W-2 wages.Step five applies only when the business has employees. A full-time worker on staff a year or longer, or a part-time worker of three years or more, rules out the solo 401(k) and points instead to a safe-harbor or group 401(k), where Kohler said the required match can run as low as about 4%, against the solo plan’s 25%. He left SEP and SIMPLE IRAs off the list altogether. Kohler added getting the order right can put six figures or more into a retirement account over time, and potentially millions down the road.Key takeaways on retirement account orderThe plan can matter as much as the saving: Getting the plan wrong is not a rounding error, Kohler warned: he said the cost at a sum is well into five figures, tracing it to missed tax breaks, a lower contribution ceiling, and growth the money never gets years to compound.Kohler’s order begins with an IRA, funded every year: Before any fancier plan, he tells self-employed savers to fund an IRA annually, preferably a Roth, and said married couples can each contribute, with a non-earning spouse’s IRA backed by the other partner’s income.Employees change where the sequence ends: A full-time worker of a year or more, or a part-time worker of three years or more, rules out the solo 401(k), Kohler said, though a safe-harbor or group 401(k) stays available in its place.Retirement strategies and contribution limits are important to confirm: Every contribution number Kohler cited, from the $7,500 and $8,600 IRA limits to the solo 401(k)’s $24,500 deferral, is a 2026 tax specific that should be confirmed to see how it applies to each individual.What stays the same: the accounts themselves: Nothing about the underlying accounts, limits, or tax rules has changed. Kohler’s sequence only tells self-employed savers which one to fund first, second, and beyond.Related: Americans receive new warning on strict 401(k), IRA rules