================================================================ FREELANCE RETIREMENT CONTRIBUTION CALCULATOR SoloStack — solostack.madethis.app ================================================================ Two contribution calculators + quarterly planner + compound growth table. Use this to figure out exactly how much you can and should contribute. ================================================================ CALCULATOR 1: SEP-IRA MAXIMUM CONTRIBUTION ================================================================ FORMULA: Net Profit × 0.9235 × 0.25 = Maximum SEP-IRA Contribution STEP-BY-STEP: Step 1: Find your net profit from Schedule C (or projected net income) Step 2: Multiply by 0.9235 (adjusts for deductible half of SE tax) Step 3: Multiply by 0.25 Step 4: Result = your SEP-IRA maximum (subject to $66,000 2024 cap) WHY 0.9235? Self-employed people pay both employer and employee portions of Social Security/Medicare tax (15.3% combined). The IRS allows you to deduct half of this tax (7.65%), which reduces your net earnings for retirement calculation purposes. The factor 0.9235 = 1 - 0.0765. WORKED EXAMPLE — $80,000 NET PROFIT: Step 1: Net profit = $80,000 Step 2: $80,000 × 0.9235 = $73,880 Step 3: $73,880 × 0.25 = $18,470 Result: Maximum SEP-IRA contribution = $18,470 WORKED EXAMPLE — $200,000 NET PROFIT: Step 1: Net profit = $200,000 Step 2: $200,000 × 0.9235 = $184,700 Step 3: $184,700 × 0.25 = $46,175 Result: $46,175 (below the $66,000 cap) WORKED EXAMPLE — $280,000 NET PROFIT: Step 1: Net profit = $280,000 Step 2: $280,000 × 0.9235 = $258,580 Step 3: $258,580 × 0.25 = $64,645 Result: $64,645 (below the $66,000 cap) AT WHAT INCOME DOES THE SEP-IRA HIT THE $66,000 LIMIT? $66,000 ÷ 0.25 ÷ 0.9235 = ~$286,000 net profit MY SEP-IRA CALCULATION (fill in): My net profit: $_____________ × 0.9235: $_____________ × 0.25: $_____________ My SEP-IRA max: $_____________ ================================================================ CALCULATOR 2: SOLO 401(k) MAXIMUM CONTRIBUTION ================================================================ FORMULA: Employee Deferral + Employer Contribution = Total Solo 401(k) Max PART A — EMPLOYEE DEFERRAL: 2024 maximum: $23,000 (or net SE income if lower) Age 50+ maximum: $30,500 PART B — EMPLOYER CONTRIBUTION: Formula: Net Profit × 0.9235 × 0.25 (same as SEP-IRA formula) TOTAL MAXIMUM: Lesser of: (Employee Deferral + Employer Contribution) OR $66,000 WORKED EXAMPLE — $80,000 NET PROFIT: Employee deferral: $23,000 Employer contribution: $80,000 × 0.9235 × 0.25 = $18,470 Combined total: $41,470 Subject to $66,000 cap: $41,470 ← Under the cap, full amount allowed WHY SOLO 401(k) BEATS SEP-IRA AT LOWER INCOMES: At $80,000 net income: SEP-IRA max: $18,470 Solo 401(k) max: $41,470 Solo 401(k) advantage: $23,000 more in tax-deferred savings WORKED EXAMPLE — $40,000 NET PROFIT: Employee deferral: $23,000 (or net SE income, whichever is less) Net SE income check: $40,000 × 0.9235 = $36,940 — above $23,000 Employee deferral: $23,000 Employer contribution: $40,000 × 0.9235 × 0.25 = $9,235 Combined total: $32,235 WORKED EXAMPLE — $15,000 NET PROFIT (part-time freelancer): Employee deferral: Min($23,000, $15,000 × 0.9235) = $13,853 Employer contribution: $15,000 × 0.9235 × 0.25 = $3,463 Combined total: $17,316 MY SOLO 401(k) CALCULATION (fill in): My net profit: $_____________ Employee deferral (max $23,000): $_____________ Employer: Net profit × 0.9235: $_____________ Employer: × 0.25: $_____________ Combined total: $_____________ Subject to $66,000 cap: $_____________ ================================================================ CALCULATOR 3: QUARTERLY CONTRIBUTION PLANNER ================================================================ STRATEGY: Align retirement contributions with estimated tax due dates. This creates one "business finances" moment per quarter instead of scrambling in April. 2024 ESTIMATED TAX DUE DATES: Q1: April 15, 2024 (income earned Jan 1 – Mar 31) Q2: June 17, 2024 (income earned Apr 1 – May 31) Q3: September 16, 2024 (income earned Jun 1 – Aug 31) Q4: January 15, 2025 (income earned Sep 1 – Dec 31) 2025 ESTIMATED TAX DUE DATES: Q1: April 15, 2025 Q2: June 16, 2025 Q3: September 15, 2025 Q4: January 15, 2026 HOW TO CALCULATE QUARTERLY CONTRIBUTION: Annual target ÷ 4 = Quarterly contribution amount EXAMPLE — $18,000 annual target (SEP-IRA): $18,000 ÷ 4 = $4,500 per quarter EXAMPLE — $40,000 annual target (Solo 401(k)): $40,000 ÷ 4 = $10,000 per quarter VARIABLE INCOME ADJUSTMENT: Lean quarter: Contribute 50–75% of your target amount Strong quarter: Contribute 100–125% to catch up Dec 31 is the hard deadline for employee deferrals (Solo 401(k)) Tax filing deadline is the deadline for employer contributions and SEP-IRA MY QUARTERLY PLANNER: Annual contribution target: $_____________ Quarterly target (÷4): $_____________ Q1 contribution (due Apr 15): $_____________ Date contributed: ________ Q2 contribution (due Jun 15): $_____________ Date contributed: ________ Q3 contribution (due Sep 15): $_____________ Date contributed: ________ Q4 contribution (due Jan 15): $_____________ Date contributed: ________ YTD total contributed: $_____________ Remaining to contribute: $_____________ ================================================================ COMPOUND GROWTH TABLE ================================================================ How regular contributions grow over time at 6% and 8% annual returns. All figures assume contributions at start of each month. ───────────────────────────────────────────────────────────────── $300/MONTH CONTRIBUTIONS ───────────────────────────────────────────────────────────────── Years 6% Annual Return 8% Annual Return 10 $49,163 $54,914 20 $138,942 $176,286 30 $300,470 $440,447 ───────────────────────────────────────────────────────────────── $500/MONTH CONTRIBUTIONS ───────────────────────────────────────────────────────────────── Years 6% Annual Return 8% Annual Return 10 $81,939 $91,524 20 $231,571 $293,810 30 $500,783 $734,078 ───────────────────────────────────────────────────────────────── $1,000/MONTH CONTRIBUTIONS ───────────────────────────────────────────────────────────────── Years 6% Annual Return 8% Annual Return 10 $163,879 $183,047 20 $463,143 $587,620 30 $1,001,565 $1,468,154 ───────────────────────────────────────────────────────────────── $1,500/MONTH CONTRIBUTIONS ───────────────────────────────────────────────────────────────── Years 6% Annual Return 8% Annual Return 10 $245,818 $274,571 20 $694,714 $881,430 30 $1,502,348 $2,202,231 KEY TAKEAWAY: The difference between 6% and 8% over 30 years at $1,000/month is $466,589 — a near-doubling. This is why keeping investment costs low (index funds, no commissions) matters enormously over a 30-year horizon. COST OF DELAY — $500/MONTH AT 8%: Start at age 25 (40 years): $1,746,100 Start at age 35 (30 years): $734,078 Start at age 45 (20 years): $293,810 Delay from 25 to 35 costs: $1,012,022 ================================================================ NOTES ================================================================ • All contribution limits based on 2024 IRS guidelines. 2025 limits: SEP-IRA and Solo 401(k) projected at $70,000 combined max. IRS announces cost-of-living adjustments each October/November. • The 0.9235 factor is specific to self-employed retirement calculations. It accounts for the deductible portion of self-employment tax. • Compound growth figures are illustrative. Actual returns vary. Most fee-free index funds (S&P 500, total market) have historically returned 7–10% nominal over long periods, before inflation. • This calculator is for educational purposes only. Consult a CPA or financial advisor for guidance specific to your tax situation. ================================================================ From SoloStack — Free resources for freelancers and solopreneurs solostack.madethis.app/resources ================================================================