With a SEP, you can put away up to 20% of your net self-employment income. The amount you contribute is tax deductible and grows tax-deferred. SEP IRAs are actually very easy to set up.

Another option is a Traditional IRA. With a traditional IRA, the money you contribute may or may not be tax deductible, depending on whether you or your wife is covered under a retirement plan at work, and how much income you earn during the year. If you have enough money, you can add to a SEP and maybe to a Roth IRA.

And the 529 Plan is a great way to save for a child's college education. Contributions made to the 529 account are not tax deductible, but grow tax-free.

So which is better - an IRA or a 529 plan? The advice you will hear every once in a while is that you can borrow to pay for college buy you can't borrow to fund your retirement.

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