If you work for yourself, there is no employer 401(k) to roll over and no plan waiting for you. You set one up. Two of the IRS's small-business plans, the SEP and the SIMPLE IRA, are built on ordinary IRAs, and that is what allows them to hold physical metal. This piece covers how each plan is funded, the 2026 limits, how metal fits in, and the timing rule that trips people up. It does not tell you which plan to choose.
How does a SEP IRA work for a self-employed person?
A SEP IRA is funded only by the employer. When you are self-employed, you are the employer, so you decide each year whether to contribute and how much, up to the IRS limit. A SEP has no salary deferrals and no catch-up contributions.
The IRS SEP contribution limits page caps 2026 contributions at the lesser of 25 percent of compensation or $72,000. If you have eligible employees, you generally contribute the same percentage of pay for them as for yourself. That is why a SEP tends to suit people who work alone or with very few staff.
For a sole proprietor, “compensation” is not gross revenue. IRS Publication 560 defines it as net earnings from self-employment after deducting half of your self-employment tax and the contribution itself. Because the contribution is part of its own calculation, Publication 560 includes a rate table and worksheets for the self-employed. Under the Publication 560 rate table for the self-employed, a 25 percent plan rate works out to 20 percent of net earnings after the self-employment tax deduction. Contributing on gross revenue instead is a common way an account gets overfunded.
How does a SIMPLE IRA work when you are your own employer?
A SIMPLE IRA combines salary deferrals from the employee with a required contribution from the employer. A self-employed owner with no staff fills both roles: deferring part of earnings as the employee, then adding the employer contribution as the business.
According to the IRS SIMPLE IRA contribution limits page, the 2026 deferral limit is $17,000. If the plan permits catch-ups, participants 50 or older can add $4,000, and under SECURE 2.0 participants aged 60 to 63 can add $5,250 instead. The employer then either matches deferrals dollar for dollar up to 3 percent of compensation, or makes a 2 percent nonelective contribution for each eligible employee whether or not that employee defers.
The IRS SIMPLE IRA plan page sets two conditions worth checking first: the business generally has 100 or fewer employees, and it cannot maintain any other retirement plan. The same page describes when some smaller employers' plans can allow a higher deferral limit.
How do the SEP, SIMPLE and Solo 401(k) compare for 2026?
The SEP is funded by the employer alone. The SIMPLE IRA and the Solo 401(k) both combine employee deferrals with an employer contribution. Only the SEP and SIMPLE are IRAs. The Solo 401(k) is a qualified plan with its own rules for what it can hold.
| Feature | SEP IRA | SIMPLE IRA | Solo 401(k) |
|---|---|---|---|
| Who can use it | Any employer, including a sole proprietor with no employees. | Employers with 100 or fewer employees and no other retirement plan. | A business owner with no employees, or the owner and a spouse. |
| Who contributes | The employer only. No salary deferrals. | The employee through salary deferrals, plus a required employer contribution. | The owner as employee (deferrals) and as employer (nonelective contributions). |
| 2026 limit | Lesser of 25% of compensation or $72,000. | $17,000 in salary deferrals, plus the employer contribution. | $24,500 in deferrals; total contributions, excluding catch-ups, capped at $72,000. |
| 2026 catch-up | Not permitted. | $4,000 at age 50 or older; $5,250 at ages 60 to 63. | $8,000 at age 50 or older, with a higher limit at ages 60 to 63. |
| Account type | An IRA. | An IRA. | A qualified 401(k) plan, not an IRA. |
Sources: IRS SEP contribution limits, SIMPLE IRA contribution limits, SIMPLE IRA plan, 401(k) contribution limits and one-participant 401(k) plans.
This article covers the two IRA-based plans. Whether a Solo 401(k) can hold physical metal depends on its plan document and trustee, so it is a separate question.
Can a SEP or SIMPLE IRA hold physical gold and silver?
Yes, when the account is self-directed. The IRS SIMPLE IRA FAQs state that a SIMPLE IRA follows the same investment rules as a traditional IRA, and a SEP is funded into IRAs as well. The metal has to meet the tax code's bullion standard and be held by a custodian or approved depository.
Most custodians do not accept physical metal, so the account needs a custodian that does.
Under section 408(m) of the Internal Revenue Code, an IRA that buys a collectible is generally treated as having made a distribution. Section 408(m)(3) carves out certain coins and gold, silver, platinum and palladium bullion. For bullion, the statute does not state a fineness figure. It ties eligibility to the minimum fineness a contract market requires for metal delivered against a regulated futures contract, so the working standard comes from exchange delivery rules. Confirm a product's eligibility with your custodian before the purchase.
The same section requires bullion to be in the physical possession of the IRA's trustee, which in practice means an approved depository. Storage and insurance terms are set by the custodian's and depository's own agreements and vary between them. Why a home-storage arrangement does not satisfy the rule is covered in the home-storage Gold IRA myth.
What does the SIMPLE IRA two-year rule mean for a move into metal?
For two years from the date you first participate in a SIMPLE IRA plan, money can move tax-free only to another SIMPLE IRA. A withdrawal in that window before age 59½ can carry a 25 percent additional tax instead of the usual 10 percent.
Both points come from the IRS page on SIMPLE IRA withdrawal and transfer rules. In practice, if you are inside the two-year window and want metal, the route is a self-directed SIMPLE IRA at a custodian that accepts it. A move to a traditional IRA can wait until the window closes. The start date is set by your first participation in the plan, not by when you opened a particular account, so confirm it with your plan administrator before requesting a transfer.
How does funding a self-directed SEP or SIMPLE IRA work?
You open the account with a custodian that accepts precious metals, fund it with new contributions or a direct custodian-to-custodian transfer, and then direct the custodian to buy specific metal. The metal is delivered to a depository, not to you.
Dormy, Inc. is a Florida precious metals dealer. We source and sell the metal, and we help coordinate between you, your account administrator and your IRA custodian during setup and funding. In an IRA, storage is at your custodian's approved depository, not arranged by us, and we do not give tax, legal or investment advice. Questions worth asking any dealer are listed in how to choose a Gold IRA company.
Before a contribution or transfer, have a CPA or your plan administrator confirm two things: the SEP figure worked from your net earnings, and, for a SIMPLE IRA, the date your two-year window closes.
Speak with a Dormy specialist, no commitment.
If you are setting up a self-directed SEP or SIMPLE IRA and want to understand how the metal purchase fits into setup and funding, we will walk through it with you.
Speak With a Specialist →Dormy, Inc. does not provide legal, tax, or personalized investment advice. Please confirm your situation with a qualified professional before acting.