You're 45 years old, been an owner operator for 15 years, and you have $12,000 saved for retirement.
At this rate, you'll be driving until you're 75. If your body holds up that long.
More than one in five owner operators have nothing saved for retirement. They plan to "work until they can't" and hope Social Security covers the bills.
Here's how to actually save for retirement as an owner operator, which retirement accounts give you the best tax benefits, and how to start even if you're behind.
Financial Disclaimer: This guide provides general information about retirement planning for educational purposes. Retirement planning involves complex financial and tax decisions. Consult a financial advisor and tax professional for advice specific to your situation. This is not financial or tax advice.
Why Owner Operators Don't Save for Retirement
The honest reasons:
- "I'll work until I can't" (no plan beyond that)
- "I barely make enough to cover expenses" (no extra cash)
- "My truck is my retirement" (plan to sell it someday)
- "I'll save when I'm making more money" (never happens)
From TruckersReport, one owner operator joked:
"Thought O/O could not retire. You had to truck till you are dead!!" - Thelushlarry
But the reality is grim. An Overdrive readers poll showed that more than one in five owner operators report having nothing saved for retirement. Between lack of savings and a love of driving, many are willing to keep trucking beyond their mid-60s.
The problem with "I'll work until I can't":
- Your back gives out at 58
- You have a heart attack at 62
- You lose your medical card at 65
- A younger driver t-bones you and you can't drive again
When you can't drive, you can't earn. Without retirement savings, you're broke.
When to Start Saving
Best time: Your 20s. Second best time: Right now.
One experienced operator on TruckersReport explained:
"In order to retire...you have to start investing really early in life, as in your early 20s. Because compound interest is a very powerful thing." - Dr_Fandango44
Compound interest example:
Start at age 25:
- Save $500/month for 40 years
- 8% average return
- At age 65: $1,745,506
Start at age 45:
- Save $500/month for 20 years
- 8% average return
- At age 65: $294,510
Same monthly savings. Starting 20 years earlier = $1,451,000 more.
If you're 45 and haven't started: Don't give up. You can still save $300,000-$500,000 by age 65 if you start now and save aggressively.
Retirement Account Options for Owner Operators
As a self-employed owner operator, you have access to powerful retirement accounts that let you save more than W-2 employees.
Option 1: SEP IRA (Simplified Employee Pension)
A SEP IRA is the simplest retirement account for self-employed people.
How it works:
- Your business contributes to the SEP IRA (you can't make personal contributions)
- Contributions are tax-deductible
- Money grows tax-deferred
- You pay taxes when you withdraw in retirement
2026 contribution limits:
- Maximum: $72,000 (or 25% of compensation, whichever is less)
- If you're self-employed: Limited to 20% of net income (after deducting half of self-employment tax)
- Based on first $360,000 of compensation
Example:
- Net profit: $80,000
- Self-employment tax: $11,304
- SEP IRA contribution: $80,000 x 20% = $16,000
- Tax savings: $16,000 x 25% tax rate = $4,000
Pros:
- Easy to set up (open account at any brokerage, no IRS filing required)
- High contribution limits
- Tax-deductible contributions
- Flexible (contribute 0-25% each year based on cash flow)
Cons:
- Can't contribute as much as Solo 401k at lower income levels
- No catch-up contributions for age 50+
- Contributions must be made as employer, not employee
Best for:
- Owner operators who want simplicity
- Those with fluctuating income (can vary contributions year to year)
- High earners (over $150,000 net)
Option 2: Solo 401(k) (Individual 401k)
A Solo 401(k) is designed for self-employed people with no employees (except a spouse).
How it works:
- You contribute as both employee and employer
- Employee deferrals + employer profit-sharing = total contribution
- Tax-deductible contributions (traditional) or tax-free growth (Roth)
- Money grows tax-deferred
2026 contribution limits:
Employee deferrals:
- Under age 50: $24,500
- Age 50-59: $32,500 (includes $8,000 catch-up)
- Age 60-63: $35,750 (includes $11,250 enhanced catch-up)
- Age 64+: $32,500 (includes $8,000 catch-up)
Employer profit-sharing:
- Up to 25% of compensation (20% of net income if self-employed)
Total maximum:
- Under age 50: $72,000
- Age 50-59 and 64+: $80,000
- Age 60-63: $83,250
Example (age 52 owner operator):
- Net profit: $80,000
- Employee deferral: $32,500 (includes $8,000 catch-up)
- Employer contribution: $16,000 (20% of net)
- Total contribution: $48,500
- Tax savings: $48,500 x 25% = $12,125
Pros:
- Highest contribution limits
- Catch-up contributions for age 50+
- Can do Roth contributions (tax-free growth)
- Can borrow from account (not recommended but possible)
Cons:
- More complex to set up and maintain
- Annual IRS filing required (Form 5500-EZ) if account balance exceeds $250,000
- Can't have employees (except spouse)
Best for:
- Owner operators who want to save aggressively
- Age 50+ (catch-up contributions are valuable)
- Those who can afford to max out contributions
Option 3: Traditional or Roth IRA
Regular IRAs are available to everyone, including owner operators.
2026 contribution limits:
- Under age 50: $7,000
- Age 50+: $8,000 (includes $1,000 catch-up)
Traditional IRA:
- Tax-deductible contributions (if you don't have a retirement plan through an employer)
- Tax-deferred growth
- Pay taxes when you withdraw in retirement
Roth IRA:
- After-tax contributions (no deduction now)
- Tax-free growth
- Tax-free withdrawals in retirement
- Can withdraw contributions anytime without penalty
Income limits for Roth IRA (2026):
- Single: Phase-out starts at $150,000
- Married filing jointly: Phase-out starts at $236,000
Most owner operators are under these limits.
Pros:
- Easy to open (any brokerage)
- Flexible withdrawals (Roth lets you pull contributions anytime)
- Low administrative burden
Cons:
- Low contribution limits ($7,000-$8,000 vs $72,000 for SEP/Solo 401k)
- Income limits for Roth
Best for:
- Supplementing SEP IRA or Solo 401k
- Owner operators just starting to save (easier to commit to $500/month vs $4,000/month)
From TruckersReport:
"I have started a ROTH IRA, but I can admit I wouldn't make it very far if I were to pull money out, due to penalties." - OONewbie
Another operator corrected this misconception:
"You can pull as much principal out of a Roth IRA as you want, at any time, for any reason, without penalty." - Plant
This is true. Roth IRA contributions (not earnings) can be withdrawn anytime tax-free and penalty-free. This makes Roth IRAs flexible for owner operators who might need emergency access.
SEP IRA vs Solo 401(k): Which Should You Choose?
If you earn under $100,000 net:
Solo 401(k) is better.
Example (age 55, net profit $70,000):
- Solo 401k: $32,500 employee deferral + $14,000 employer = $46,500 total
- SEP IRA: $70,000 x 20% = $14,000 total
- Solo 401k lets you save $32,500 more
If you earn over $150,000 net:
SEP IRA and Solo 401k are similar.
Example (age 55, net profit $180,000):
- Solo 401k: $32,500 employee deferral + $36,000 employer = $68,500 total
- SEP IRA: $180,000 x 20% = $36,000 total
- Solo 401k still better, but SEP is simpler
If you want maximum flexibility:
SEP IRA.
You can contribute 0% one year, 25% the next. Solo 401k requires annual administration even if you contribute $0.
If you're age 50+:
Solo 401(k) with catch-up contributions.
Catch-up contributions let you save an extra $8,000-$11,250 per year. SEP IRAs don't offer catch-up.
How to Open a Retirement Account
SEP IRA Setup
- Choose a brokerage (Vanguard, Fidelity, Schwab, etc.)
- Open a SEP IRA account (online, 10 minutes)
- Complete IRS Form 5305-SEP (adoption agreement)
- Make contributions before tax filing deadline (including extensions)
No annual IRS filing required.
Solo 401(k) Setup
- Choose a provider (Vanguard, Fidelity, Schwab, E-Trade, etc.)
- Complete Solo 401(k) adoption paperwork
- Get an EIN for the plan (separate from your business EIN)
- Make contributions throughout the year
Annual IRS filing: Form 5500-EZ required once account balance exceeds $250,000.
How Much Should You Save?
Financial advisors recommend saving 10-20% of gross income for retirement.
10% of gross:
- Gross: $180,000
- Annual retirement savings: $18,000
- Monthly: $1,500
15% of gross:
- Gross: $180,000
- Annual retirement savings: $27,000
- Monthly: $2,250
20% of gross:
- Gross: $180,000
- Annual retirement savings: $36,000
- Monthly: $3,000
Reality check: Most owner operators struggle to save 10%. Start with 5% and increase over time.
From TruckersReport discussions, operators suggest a typical saving rate should be between 10 and 20% of taxable income, though many acknowledge saving for retirement took a backseat to making ends meet.
Where to Invest Your Retirement Money
Opening a retirement account is step one. Choosing investments is step two.
Index Funds (Recommended)
Index funds track the overall stock market (S&P 500, total market, etc.).
Why index funds:
- Low fees (0.03-0.20% annually)
- Diversified (you own 500+ companies)
- Historical returns: 8-10% annually long-term
- Requires no stock-picking knowledge
From TruckersReport:
"What I have found works well for me is index funds...It has averaged about 10% per year since its inception." - Plant
Common index funds:
- Vanguard Total Stock Market Index (VTSAX)
- Fidelity 500 Index Fund (FXAIX)
- Schwab S&P 500 Index Fund (SWPPX)
How to invest: Set up automatic monthly contributions. The money gets invested automatically in your chosen index fund.
Target-Date Funds (Easier Alternative)
Target-date funds automatically adjust your investments as you get closer to retirement.
How they work:
- Pick the fund matching your retirement year (2040, 2050, 2060)
- The fund starts aggressive (80-90% stocks) and gradually becomes conservative (40-50% stocks) as you near retirement
- No rebalancing needed
Example: If you plan to retire in 2045, choose a "2045 Target-Date Fund."
Pros:
- Fully automated
- Diversified
- Adjusts risk automatically
Cons:
- Slightly higher fees than index funds (0.10-0.50%)
- Less control
What to Avoid
Individual stocks: Too risky for retirement. One bad pick can wipe out years of savings.
Crypto: Extremely volatile. Not suitable for retirement accounts.
Cash/Money market: Too conservative. Earns 4-5% while inflation is 3-4%. You're barely keeping pace with inflation, not building wealth.
How to Catch Up If You're Behind
If you're 40 with $0 saved:
Don't panic. You have 25 years until traditional retirement (65).
Aggressive savings plan:
- Save $1,500/month for 25 years
- 8% return
- At age 65: $1,138,000
Moderate savings plan:
- Save $800/month for 25 years
- 8% return
- At age 65: $607,000
If you're 50 with $0 saved:
You have 15 years. It's harder, but doable.
Aggressive savings plan:
- Save $3,000/month for 15 years
- 8% return
- At age 65: $1,034,000
Moderate savings plan:
- Save $1,500/month for 15 years
- 8% return
- At age 65: $517,000
If you're 60 with $0 saved:
You have 5-10 years max. Focus on:
- Maximizing Solo 401k catch-up contributions ($80,000/year possible)
- Cutting expenses aggressively
- Working part-time after 65 (reduce Social Security if you claim early)
Reality: If you're 60 with nothing saved, you're likely working into your 70s or living on Social Security alone ($1,500-$2,500/month).
Social Security for Owner Operators
As a self-employed owner operator, you pay into Social Security through self-employment tax (12.4% of net income up to $176,100 in 2026).
When you can claim:
- Age 62: Reduced benefits (70% of full amount)
- Age 67: Full retirement age for most current workers
- Age 70: Maximum benefits (124% of full amount)
Average Social Security for truckers: $1,800-$2,500/month depending on lifetime earnings.
Is Social Security enough? For most people, no. Social Security replaces about 40% of pre-retirement income. If you were earning $6,000/month, Social Security pays $2,400/month.
You need retirement savings to bridge the gap.
Real Retirement Savings Strategies
Strategy 1: Automate Everything
Don't rely on discipline. Automate your retirement contributions.
How:
- Set up automatic monthly transfer from business checking to Solo 401k or SEP IRA
- Treat it like a bill that must be paid
- If you don't see the money, you won't miss it
Example:
- $1,500/month automatic contribution
- Happens on the 1st of every month
- After 6 months, it feels normal
Strategy 2: Save Windfalls
Any unexpected income goes straight to retirement:
- Tax refunds
- Detention pay over $500
- TONU pay
- Any week you gross over your average
Example:
- Average weekly gross: $4,500
- Week you gross $6,000
- Extra $1,500 → retirement account
Over a year, this could add $5,000-$10,000 to your retirement without affecting your regular budget.
Strategy 3: Increase Savings by 1% Every Year
Start where you can. Increase gradually.
Year 1: Save 5% of net profit = $4,000/year ($333/month) Year 2: Save 6% of net profit = $4,800/year ($400/month) Year 3: Save 7% of net profit = $5,600/year ($467/month)
After 10 years, you're saving 15% without ever feeling the pinch.
Strategy 4: Use Tax Refunds
Most owner operators get tax refunds ($2,000-$8,000).
Instead of spending it: Deposit refund directly into retirement account. You won't miss money you never saw.
Strategy 5: Cut One Major Expense
Find one expense to eliminate and redirect that money to retirement.
Examples:
- Trade in $800/month truck payment for $500/month payment = $300/month to retirement
- Cancel $150/month in subscriptions = $150/month to retirement
- Reduce eating out by $200/month = $200/month to retirement
Total: $650/month = $7,800/year to retirement
How Much Will You Need to Retire?
Common retirement planning rule: You need 25x your annual expenses saved to retire.
Example:
- Annual expenses in retirement: $50,000
- Retirement savings needed: $50,000 x 25 = $1,250,000
Why 25x? The 4% rule. If you withdraw 4% of your retirement savings annually, your money should last 30+ years.
- $1,250,000 x 4% = $50,000/year
Add Social Security:
- Retirement savings: $50,000/year
- Social Security: $24,000/year
- Total retirement income: $74,000/year
More conservative approach: Use 30x expenses instead of 25x. This provides more cushion if the market performs poorly or you live longer than expected.
Common Retirement Planning Mistakes
1. Counting Your Truck as Retirement
"I'll sell my truck when I retire and live on that."
Problem:
- Trucks depreciate. Your $150,000 truck is worth $30,000-$50,000 in 10 years
- That's not enough to fund 20-30 years of retirement
- You're selling your income-producing asset (now you can't earn even if you wanted to)
Better plan:
- Save in a retirement account
- Keep the truck as long as it makes sense
- Sell it when you're done, but don't rely on it
2. Planning to Work Until You Die
Your body may not cooperate. Back problems, heart issues, or a medical disqualification can end your career at 55-60.
Have a backup plan.
3. Not Starting Because "It's Too Late"
Even if you're 50 with nothing saved, saving something is better than nothing.
$500/month for 15 years = $170,000+ at 8% returns. That's not retirement, but it's better than $0.
4. Withdrawing Early
Pulling money from retirement accounts before age 59½ triggers:
- 10% early withdrawal penalty
- Income taxes on the withdrawal
$20,000 early withdrawal:
- 10% penalty: $2,000
- Income tax (25%): $5,000
- Total cost: $7,000 to access $20,000
- You net $13,000
Exceptions:
- Roth IRA contributions can be withdrawn anytime without penalty
- Some 401k plans allow loans (not recommended)
- Hardship withdrawals exist but should be avoided
5. Keeping Money in Cash
Parking retirement money in savings accounts earning 4% doesn't build wealth.
Example:
- $100,000 in savings at 4% = $4,000/year growth
- $100,000 in index funds at 8% = $8,000/year growth
Over 20 years:
- Savings account: $219,112
- Index funds: $466,096
- Difference: $246,984
Inflation averages 3-4%. Cash earning 4% is barely keeping pace. Invest for growth.
How FF Dispatch Helps With Retirement Planning
We can't manage your retirement account, but consistent income makes it easier to save regularly.
How we help:
- Predictable weekly or biweekly settlements (makes budgeting for retirement contributions easier)
- Strong average rates ($2.40-$2.80/mile) provide income to support savings goals
- Transparent settlements (you know exactly what you're earning for accurate retirement calculations)
Stable income = easier to commit to retirement savings. When you're grossing $4,000-$5,000/week consistently, you can afford to save $500-$1,000/week for retirement without panic.
Contact: (302) 608-0609 or gia@dispatchff.com Pricing: 6% of gross revenue No long-term contracts - month-to-month service
If unpredictable income is preventing you from committing to retirement savings, we can help stabilize your cash flow.
Bottom Line
Owner operators who don't save for retirement end up driving into their 70s—or living on Social Security alone ($1,800-$2,500/month).
Retirement account options:
- SEP IRA: Simple, high limits, flexible (up to $72,000/year)
- Solo 401(k): Highest limits, catch-up contributions, best for aggressive savers (up to $80,000/year, $83,250 for ages 60-63)
- Roth IRA: Flexible, tax-free growth, low limits ($7,000-$8,000/year)
Recommended approach:
- Open Solo 401(k) if you're serious about retirement
- Contribute as much as you can afford (target 10-20% of net income)
- Automate monthly contributions
- Invest in index funds (8-10% historical returns)
2026 contribution limits:
- Solo 401(k): $72,000 (under 50), $80,000 (age 50+), $83,250 (age 60-63)
- SEP IRA: $72,000 (25% of compensation, 20% of net for self-employed)
- Roth IRA: $7,000 (under 50), $8,000 (age 50+)
How much you need:
- Retirement goal: 25x annual expenses (4% withdrawal rate)
- Example: $50,000/year expenses = $1,250,000 saved
Start now:
- Age 25 saving $500/month → $1.7M by age 65
- Age 45 saving $1,500/month → $517,000 by age 65
- Age 55 saving $3,000/month → $1.0M by age 65
Don't be the owner operator who's 65 years old, can't pass a DOT physical, and has $0 saved. Start this month. Even $200/month is better than nothing.
Your future self will thank you.
Sources:
- SEP IRA Contribution Limits 2026 - Fidelity
- SEP IRA Contribution Limits 2026 - Kiplinger
- SEP-IRA Simplified Employee Pension Plan - Vanguard
- Solo 401k vs SEP IRA 2026 - uDirect IRA
- 2026 Solo 401k Contribution Limits - IRA Financial
- IRS 2026 401k and IRA Contribution Limits - IRA Financial
- High-Earner's Guide to Solo 401k 2026 - IRA Financial
- 2026 Solo 401k Roth Catch-Up Rule - IRA Financial
- Retirement Plan Deductions Self-Employed 2026 - Jupid
- Planning Retirement as Owner-Operator - ATBS
- Retirement Planning for Owner Operators - Overdrive
- Owner Operators Savings & Retirement - TruckersReport Forum
- O/O Retirement Funds - TruckersReport Forum
- Retirement Plans for Truckers - TruckersReport Forum