The Complete Guide to Retirement Savings Options for Real Estate Agents
Why Retirement Planning Is So Critical for Agents
For most people, retirement is “built in.” If you’re a W-2 employee, HR signs you up for a 401(k), and contributions slide out of your paycheck every two weeks. You might not understand the plan, but at least something is happening in the background.
Real estate agents live in a different world. You don’t get an automatic retirement plan. No matching contributions. No safety net. Every dollar of your retirement has to be designed, funded, and managed by you.
And here’s the challenge: real estate feels immediate. There are always new listings, client fires, and commissions coming down the pipeline. It’s easy to tell yourself “I’ll save when I close the next big deal.” But without a structure, years go by and wealth doesn’t accumulate.
The retirement gap is real:
The average U.S. household approaching retirement has only about $200,000 saved.
Many agents, despite strong incomes, end up asset-rich but cash-poor—owning a home but with no liquid retirement assets.
Real estate cycles mean even a few slow years can derail your long-term financial security.
That’s why understanding retirement savings options is critical. The right plan not only builds wealth but also lowers today’s taxes and creates a future income stream you can count on.
Let’s walk through the five main options available to agents—and how to think strategically about each. If you want to find out more about advanced tax planning strategies available to real estate agents, check out the Real Estate Agent Tax Strategy Guide.
Option 1: Traditional and Roth IRAs – The Foundation
When most people think of retirement accounts, IRAs are the first stop. And for good reason: they’re simple, widely available, and offer tax advantages.
How They Work
Traditional IRA: You contribute pre-tax dollars (deduction today), the money grows tax-deferred, and you pay tax when you withdraw in retirement.
Roth IRA: You contribute after-tax dollars, the money grows tax-free, and you withdraw tax-free in retirement.
2025 Contribution Limits
$7,000/year if under 50.
$8,000/year if 50 or older (catch-up).
Why They Matter for Agents
For new or mid-income agents, IRAs are an easy “entry-level” way to start saving. You don’t need an LLC, special payroll, or complicated paperwork. Open an account at a brokerage and set up auto-transfers.
Pitfalls and Misconceptions
“I’ll just save later.” The power of IRAs is compounding. Waiting five years could cost you six figures at retirement.
Roth confusion. Many agents mistakenly think Roth contributions are deductible. They aren’t—but the withdrawals are tax-free, which can be even more valuable long-term.
Income limits. Roth IRA eligibility phases out for high earners ($161k single, $240k joint in 2025). Many agents hit this wall quickly.
Advanced Note: Backdoor Roth
Even if you’re over the Roth limit, you can still make a non-deductible IRA contribution and convert it to a Roth. It requires planning, but it’s a powerful long-term tax move. This can be a powerful tax strategy but needs to be carefully managed and considered!
Option 2: SEP IRA – Simplicity with Bigger Potential
As your income grows, IRAs often feel too small (and the deduction just isn’t big enough). That’s where the SEP IRA comes in.
How It Works
SEP = Simplified Employee Pension.
Contributions are made by the employer—in this case, you as a self-employed person.
Limit: up to 25% of net self-employment income, capped at $69,000 (2025).
Why Agents Like It
Contributions are flexible year to year. Good for commission-driven income that fluctuates.
Easy to set up—most brokerages will walk you through it in 15-30 minutes.
Much higher limits than a Traditional or Roth IRA.
Downsides to Watch
No Roth option. Contributions are always pre-tax.
If you have employees, contributions must be proportional. That means if you put away 20% of your own pay, you must contribute 20% of theirs, too.
Common Misstep
Many agents stop here because the SEP feels “big enough.” But the Solo 401(k) (next option) often provides more flexibility and larger contributions at the same income level.
Option 3: Solo 401(k) – The Powerhouse
This is the go-to plan for high-earning solo agents. It combines high contribution limits, Roth flexibility, and control.
How It Works
You’re both an “employee” and “employer.”
As employee: defer up to $23,000 ($30,500 if 50+).
As employer: contribute up to 25% of net income.
Total: up to $69,000 ($76,500 if 50+).
Why It’s a Game-Changer
You can choose pre-tax (Traditional) or Roth contributions.
You can borrow against the plan (up to $50,000).
You control the investments—mutual funds, ETFs, or even self-directed options like real estate syndications.
Administrative Needs
Slightly more paperwork than SEP.
Once plan assets exceed $250,000, you must file Form 5500 annually.
Why Agents Miss Out
The Solo 401(k) is underused because many accountants never bring it up. But for agents making $200k+, it can mean putting away $40,000–$70,000 per year and shaving tens of thousands off their tax bill.
Option 4: SIMPLE IRA – A Team-Friendly Option
What if you’ve started hiring? You have a full-time assistant, a transaction coordinator, or buyers’ agents on payroll. Now retirement planning has to extend beyond just you.
How It Works
SIMPLE = Savings Incentive Match Plan for Employees.
Employees can contribute up to $16,000 ($19,500 if 50+).
You must either match up to 3% or contribute 2% across the board.
Why It’s Useful
Easier to administer than a full 401(k).
Helps you stand out as a team leader—retirement benefits are rare in the industry.
Allows you to save while also providing value to staff.
Downsides
Contribution limits are lower than SEP or Solo 401(k).
Mandatory employer contributions, even in lean years.
Option 5: Taxable Brokerage and Real Estate
Finally, not all wealth-building happens in retirement accounts. Many agents combine brokerage accounts and direct real estate investing with their tax-advantaged plans.
Brokerage Accounts
Unlimited contributions.
No tax deduction.
Liquidity—withdraw anytime.
Gains taxed at capital gains rates.
Real Estate Investments
Properties can produce monthly cash flow and long-term appreciation.
Depreciation provides tax benefits.
Tangible asset you control.
But: illiquid and requires active management.
Why This Matters
For agents, real estate is familiar territory. The key is not to make it your only retirement strategy. Property markets swing. Having diversified accounts (brokerage, retirement plans, and real estate) gives stability.
Comparison Chart
FAQ for Agents
Can I have both a SEP and a Solo 401(k)?
No, you must pick one for the same business income.
What happens if I withdraw early?
Most retirement accounts have a 10% penalty if you withdraw before 59½ (plus taxes). Exceptions exist for certain expenses.
Do I need an LLC or S-Corp to use these plans?
No, but your entity type affects how contributions are calculated. S-Corps use W-2 wages; sole props/LLCs use net self-employment income.
Can I invest retirement funds in real estate?
Yes, through self-directed IRAs or Solo 401(k)s—but this comes with strict IRS rules.
Why Having the Right Accountant Is Essential
Here’s the truth: most agents don’t miss out on retirement savings because they’re lazy—they miss out because no one is proactively guiding them.
Without the right accountant:
You don’t know your contribution limits until tax season, when it’s too late.
You default to a SEP IRA when a Solo 401(k) would have saved you double in taxes.
You forget to make contributions quarterly, so you never hit your annual max.
You think of retirement as “extra” instead of as part of your tax strategy.
A proactive accountant helps you:
Forecast income so you know exactly how much to contribute each quarter.
Pick the right plan for your business structure and goals.
Build retirement into your tax planning rhythm—not as an afterthought.
Show the real savings: a $50,000 Solo 401(k) contribution might save $15,000+ in federal taxes right now.
Why Work With The Agent’s Accountant
At The Agent’s Accountant, we specialize in helping real estate agents maximize their financial life—not just their tax return.
When you partner with us, we’ll:
Map the retirement plan that fits your income, entity, and goals.
Integrate contributions into your tax strategy so you build wealth and cut taxes.
Create a financial dashboard that shows you not just how much you made—but how much you kept.
Give you the tools to grow your business and your retirement side by side.
We know you’re working hard to close deals today. Our job is to make sure those closings turn into long-term wealth tomorrow.
Final Takeaway
Retirement planning for real estate agents doesn’t happen by accident. If you’re not intentional, the years will fly by with nothing to show but commission checks already spent.
The path forward is simple:
Use IRAs to get started.
Scale into SEP or Solo 401(k) as your income grows.
Add SIMPLE IRA if you’re building a team.
Diversify with brokerage accounts and real estate.
And above all—work with an accountant who makes retirement part of your tax strategy, not an afterthought.
👉 Next Step: Book a call with The Agent’s Accountant. We’ll help you design the right retirement plan, keep more of what you earn, and finally build wealth that lasts.
