Being your own boss offers a lot of flexibility and opportunity for financial growth. But saving for retirement when you’re self employed can be a difficult path to navigate.

That’s why Douglas Goldstein, CFP®, director of Profile Investment Services, Ltd., equates the strategies of investing and creating a self-employment retirement savings plan to playing a game of chess.

“It’s all about return on investment. You have to look at the potential risk, the opportunity, and then invest, in that order,” says Goldstein, who coauthored the book “Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster” with Susan Polgar, the first female grandmaster of chess who broke the Guinness world record for playing more than 300 games simultaneously.

“Susan would always look at each board and determine the risk before she would ever make a move and then look for an opportunity to capture a guy’s piece for free,” Goldstein says. “The parallel is the same in the world of investing. If you have your money in a money market [account] making 0 percent, it’s an opportunity just waiting for you to do something.”

Get into the game

According to the IRS, self-employed entrepreneurs have many of the same retirement options, including saving on a tax-deferred basis, as employees. But many self-employed individuals don’t take advantage of these options and forget to take an important first step. “The biggest problem entrepreneurs have is they neglect to pay themselves first,” Goldstein says.

To help you strategize, here is a look at four available options that can be a part of a healthy self-employed retirement plan: traditional IRA, Roth IRA, SIMPLE IRA plan, and SEP plan.

Traditional IRA

Anyone who has taxable income, including self-employed, sole proprietors, can open and fund a traditional IRA as long as they haven’t reached the age of 70 ½ by the end of the year.

Individuals can begin accessing their traditional IRA at age 59 ½, and at age 70 ½ they must start withdrawing a taxable amount from their account.

If you’re in a higher tax bracket, this may be the way to go, Goldstein says, because a traditional IRA offers self-employed earners an annual tax deduction, and investors will only pay taxes when they withdraw on the account.

Contribution limits for 2015 (earnings limits may apply.):

  • Under 50 years: $5,500
  • 50 and older: $6,500

Roth IRA

Unlike a traditional IRA, with a Roth IRA you won’t get a current tax deduction or reduce your gross income. However, Roth IRAs allow self-employed individuals to pay taxes on their annual contributions. This means that upon retirement, there’s no taxable income on the withdrawal.

In addition, unlike with a traditional IRA, there’s no required distribution when you turn 70 ½.To be eligible to contribute to a Roth IRA, self-employed individuals must have a modified adjusted gross income in 2015 of less than the following amounts, based on filing status:

  •  Single: $131,000 (amount will increase to $132,000 in 2016)
  •  Joint: $191,000 (amount will increase to $194,000 in 2016)
  •  Married, filing separately: $10,000 (amount will stay the same in 2016)

SIMPLE IRA plan

Savings incentive match plan for employees, or SIMPLE, IRA plans are meant for both self-employed sole proprietors and small companies with fewer than 100 employees, says Goldstein. The SIMPLE IRA allows eligible employees to contribute part of their pretax compensation to the plan. This means the tax on the money is deferred until it is distributed.

“It’s a nice thing to do for your workers if you want them to stay with you,” Goldstein says. “It also lowers the company’s taxable income.”

It’s important to consider whether you plan to withdraw money during the two-year period after you begin participation because of a special withdrawal penalty. “Normally if you withdraw, there is a 10 percent penalty on top of taxes,” he says. “With a SIMPLE IRA, it’s up to 25 percent.”

Contribution limits for 2015:

  • Under 50 years: $12,500
  • 50 and older: $15,500

SEP plan

A simplified employee pension plan, or SEP, plan is a type of traditional IRA for small business owners and self-employed individuals. A SEP plan provides business owners with a simplified method to contribute toward their employees’ retirement as well as their own retirement savings. Contributions are made to an IRA set up for each plan participant (a SEP-IRA).

What self-employed entrepreneurs may like about a SEP plan over a traditional IRA is the ability to contribute more on an annual basis, Goldstein says. “A problem a lot of business owners have is they don’t have the money in liquid format,” Goldstein says. “When you have a SEP, you can put more in when you want to.”

Individuals are allowed to contribute up to 25 percent of their net earnings from compensation or $53,000 (for 2015 and 2016), whichever is less. As with a traditional IRA, money in a SEP plan is not taxable until it is withdrawn.

Regardless of which type of structure self-employed professionals choose, Goldstein encourages all sole proprietors and small business owners to seek a financial professional to help create a self-employment retirement plan. Whether you’re playing chess or making a financial plan, says Goldstein, starting slowly and improving each of your financial plays a little bit at a time puts you in a powerful position—both on the chess board and in your personal life.