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Everything you need to know about retirement accounts, tax benefits, and how The Tactical IRA™ helps you save more.
Retirement accounts and tax benefits explained.
What is an IRA?
IRA stands for Individual Retirement Account — a tax-advantaged account designed to help you save for retirement.
The Basic Concept
An IRA is simply a container for your retirement savings. The “individual” in IRA means you own and control the account yourself, separate from any employer-sponsored plans.
How IRAs Work
All IRAs share common characteristics:
- Tax Advantages: Either tax-deductible contributions (Traditional) or tax-free withdrawals (Roth)
- Tax-Deferred Growth: Your investments grow without annual capital gains taxes
- Retirement Focus: Designed for long-term savings with penalties for early withdrawal before age 59½
Types of Retirement Accounts
The IRS offers several retirement account structures, each with different rules, contribution limits, and benefits (2026 limits shown):
- Traditional IRA: $7,000/year limit, tax-deductible contributions
- Roth IRA: $7,000/year limit, tax-free withdrawals
- SEP IRA: Up to $70,000/year for self-employed
- Solo 401(k): Up to $70,000/year with Roth option
- Safe Harbor 401(k): For businesses with employees
The Sidepocket Tactical IRA™
The Tactical IRA™ is Sidepocket’s intelligent retirement optimization service — not a specific account type, but a smarter approach to maximizing your retirement savings.
Structure Agnostic
Unlike traditional advisors who push one account type, The Tactical IRA™ analyzes your situation and recommends the optimal legal structure for your needs. Currently we support SEP IRAs, with Solo 401(k), Safe Harbor 401(k), and HSA support coming soon.
Tactical Asset Allocation
Sidepocket investing modes rebalance monthly and apply tactical asset allocation — adjusting your portfolio based on market conditions and your risk profile to optimize returns while managing downside risk.
Note: Sidepocket currently supports SEP IRAs, with Solo 401(k), Safe Harbor 401(k), and HSA support coming soon. If your situation is not ideally suited for a SEP IRA legal structure, we will disclose this during onboarding and help you understand your options.
Why “Tactical”?
Your financial situation isn’t static. As your income grows, your business evolves, or tax laws change, the best retirement structure for you may change too. The Tactical IRA™ adapts with you:
- Today: You might need a Roth IRA for tax-free growth on smaller contributions
- Tomorrow: A Traditional IRA could make sense as your income and tax bracket rise
- As You Scale: A SEP IRA (available now) unlocks up to $70,000/year in contributions
- Coming Soon: Solo 401(k), Safe Harbor 401(k), and HSA support for even more flexibility
What We Optimize For
- Maximum Contributions: Put as much as legally possible into tax-advantaged accounts
- Tax Efficiency: Choose structures that minimize your tax burden
- Simplicity: Avoid unnecessary complexity and paperwork
- Flexibility: Maintain options as your situation evolves
The Bottom Line
When you sign up for The Tactical IRA™, we’ll recommend the specific account structure that makes the most sense for you right now and help you evolve as your needs change. The legal structure may vary, but the goal is always the same: maximize your retirement savings and minimize your taxes.
Tax Benefits Explained
Self-employed retirement accounts offer powerful tax advantages that can save thousands of dollars every year.
Immediate Tax Deduction
Every dollar you contribute to your retirement account reduces your taxable income dollar-for-dollar. If you’re in the 32% tax bracket and contribute $50,000, you save $16,000 in taxes that year.
Example: $200,000 Income
Tax-Deferred Growth
Inside your retirement account, your investments grow without being subject to annual capital gains taxes. This tax-deferred compounding means more of your money stays invested and grows over time.
The Subscription is Deductible Too
Your Sidepocket subscription fee is a legitimate business expense and is tax-deductible, further reducing your tax burden.
2026 Contribution Limits
Self-employed retirement account contribution limits are based on your net self-employment income and the account structure.
How Limits Vary by Structure
Different account types have different rules (IRS 2026 limits):
- SEP IRA: Up to 20% of net SE income, max $70,000
- Solo 401(k): Employee deferrals ($23,500) + employer contributions (20%), max $70,000
- Traditional/Roth IRA: $7,000 limit regardless of income
The Tactical IRA™ Optimizes This
Depending on your income level and goals, different structures maximize your contributions. For example, with lower income a Solo 401(k) may allow higher contributions than a SEP IRA. We analyze your situation and recommend the optimal structure.
Who Qualifies?
If you have any self-employment income, you likely qualify for a self-employed retirement account.
You Qualify If You’re:
- A freelancer or independent contractor
- A consultant
- A sole proprietor
- An LLC owner (single-member or multi-member)
- A partner in a partnership
- An S-Corp owner (on your salary)
- Anyone who receives 1099 income
Already Have a 401(k)?
Good news: You can have both! If you have a day job with a 401(k) and also have self-employment income on the side, you can contribute to both accounts.
What About Employees?
Your employee situation affects which structure works best. SEP IRAs require equal contributions for employees. Solo 401(k)s are only for owner-only businesses. Safe Harbor 401(k)s can accommodate employees. The Tactical IRA™ helps you navigate these requirements.
Account Types Compared
Understanding how different retirement account structures compare helps The Tactical IRA™ recommend the best fit for you.
SEP IRA
Solo 401(k)
Safe Harbor 401(k)
* SEP IRAs require equal % contributions for all eligible employees
** Required when assets exceed $250,000
SEP IRA is Best When:
- You want maximum simplicity
- You don’t need Roth contributions
- You’re solo or okay contributing for employees
Solo 401(k) is Best When:
- You want Roth (after-tax) contribution option
- You may want to borrow against your retirement funds
- You have lower income but want to maximize contributions
- You have no employees (other than a spouse)
Safe Harbor 401(k) is Best When:
- You have employees and want to offer retirement benefits
- You want to avoid complex non-discrimination testing
- Your business is growing and adding team members
Let The Tactical IRA™ Decide
Don’t worry about choosing the “right” structure. When you sign up, we’ll analyze your specific situation — income, business structure, employees, goals — and recommend the optimal account type. As your situation changes, we’ll help you evolve.
Ready to Start Saving?
Let The Tactical IRA™ analyze your situation and recommend the optimal retirement account structure for you.
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