Most retirement advice starts with a sentence that doesn’t apply to you: “First, make sure you’re getting your full employer match.”
As a real estate agent, you don’t have one. No HR department is auto-enrolling you in anything. Whatever gets set aside for your future has to be a decision you make yourself, out of income that isn’t the same amount two months in a row.
This is a different problem than the standard retirement one, and it needs a different plan.
Step 1 clears the mental blocker everything else runs into. After that, these aren’t a checklist to work in order. You don’t need a SEP or a Solo 401(k) in place to start building cash value or a savings habit. Steps 2 through 5 stand on their own. Start wherever fits your situation right now.
5 tips for building retirement
1. Stop measuring yourself against a 401(k) benchmark that was never built for you
Most retirement rules of thumb assume a steady paycheck and an employer plan sitting there by default: Save 15 percent of every paycheck, max out the match, increase 1 percent a year. You have neither.
Comparing your progress to that benchmark just tells you you’re behind on a system you were never enrolled in. What matters instead is what retirement planning actually looks like when income arrives in uneven chunks, not whether you’re keeping pace with a W-2 employee.
2. Know your 2 self-employed retirement accounts, and what each one costs you
A SEP IRA is the simpler of the two: Contribute up to 25 percent of net self-employment income, skip a contribution entirely in a slow year, minimal paperwork. What it won’t do is let you take a loan against it if a slow season turns into a cash crunch. The money is locked up the same way a traditional IRA is.
A Solo 401(k) lets you contribute as both “employer” and “employee,” which can mean saving more in a strong year than a SEP allows, and unlike a SEP, some plans let you borrow against the balance. The trade-off is more paperwork, and once the account exceeds $250,000, there is an annual filing requirement.
Neither is wrong. The question that matters is whether you’re more likely to need access to a loan in a lean year (Solo 401(k)) or want the lowest-maintenance option and don’t mind having income completely locked up (SEP IRA).
Contribution limits and filing thresholds like these change from year to year. Confirm the current numbers with a CPA or tax professional before you commit to either account.
3. Understand what a Roth conversion actually buys you, before you assume it’s not for you
A lot of agents hear “Roth conversion” and assume it’s for people with more consistent income than they have. It’s the opposite: A slow year, the kind that feels like a problem while you’re in it, is often the cheapest year you’ll ever have to convert traditional retirement dollars to Roth, because you’re paying the conversion tax at your lowest tax bracket in years.
The commission-based income swings that make retirement planning harder also hand you a window nobody on a steady salary gets. The trade only makes sense with your own numbers run for your specific bracket, not a rule of thumb. The low-income year is exactly when to run them, not when to assume you have nothing extra to think about.
4. Give your future self a floor income doesn’t have to threaten
Every option above still leaves your retirement account exposed to the same market that made your last few closings feel unpredictable. A cash-value whole life policy, designed correctly, works differently: Cash value grows contractually even in a bad year, and remains accessible when a slow season needs bridging.
Plus, there is no early-withdrawal penalty and no loan-approval process a bank would put you through. It’s the piece that gives you liquidity while a SEP or Solo 401(k) stays locked up until retirement age, not a replacement for either one.
5. Build the habit before you build the balance
My husband grew up watching his mom build an entire household on commission alone. She drove the countryside selling hand-painted portraits of people’s houses: some months flush, some months not, with two kids in the back seat and a stack of Zig Ziglar cassette tapes teaching her how to build trust with total strangers at the door.
What she never had was a system for turning good months into a floor under the bad ones. The income was real. The architecture to catch it wasn’t.
That’s the actual gap for many agents. Most don’t lack motivation or knowledge. They simply don’t have a system. A system can run regardless of which kind of month it is.
Start with a percentage, not a dollar amount, of every commission check: 1 percent into whichever account fits your situation, adjusted up a point or two each quarter you can afford it. A percentage survives a slow month. A fixed dollar target doesn’t.
You already know how to build something out of inconsistent income. None of the four options above are waiting on each other, so start with whichever one fits where you are today. Retirement security just means applying that same skill to your own future, not just your next closing.
Money Matters Month is here. All September, Inman is focused on the financial side of real estate — the part nobody teaches you when you get your license. How to budget through lean times, protect your profits when business is good and find new ways to grow your bottom line no matter what the market is doing.
Amanda Neely is a Certified Financial Planner and the CEO of Wealth Wisdom Financial. Connect with her on LinkedIn.
