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Greetings, Jeb, and welcome. You wrote:

<<I have a question that seem very simple, but can't seem to find and answer to. Also, my account gave me some information, but I'm wondering if he understood what I was asking.

Currently I am employed as a contractor through a placement agency. However since my rates are very high (software engineer) I don't qualify for their 401k plan (they rate me in a special category - who knows). Now every year I open a IRA(Roth), but I wonder if their is a self-employed replacement for 401k. Last year my accountant had me open a IRA-SEP, but this year he said I can have either the traditional IRA or the IRA-SEP. Is this correct. Or is there a self employed 401k? (say the 403?).>>

If you are considered self-employed, then there are a number of options for a tax-deferred retirement plan for yourself. These include a SEP-IRA, SIMPLE or Keogh plan. You will find a brief description of each in our Foolish Retirement Plan Primer at They are described in more detail in IRS Publication 560 (Retirement Plans for Small Business) available for download at All allow a potentially greater contribution than an ordinary IRA.

If you use one of those, then you will be (at leased based on what you indicated you earn) ineligible for a deductible contribution to a traditional IRA, but you may still make a nondeductible contribution. If you can meet the adjusted gross limits for a Roth IRA, then based on a nondeductible contribution that would almost certainly be better for you than the traditional IRA due to your ability to ultimately get the earnings tax-free in retirement.

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