Saving for retirement has never been more important. The Social Security system is being placed under increasing strain as people live longer and the baby boomer generation retires.

Federal deficits should increase as the costs of Social Security and Medicare skyrocket and now the Affordable Care Act is added to the federal budget. This is leading to pressure to increase taxes, especially on the more affluent. Therefore, the incentives for the self-employed to save for retirement and cut their current tax bill have never been greater.

Individual Retirement Arrangements allow one to save up to $5,500 a year (or $6,500 if you are over age 50) if you have earned at least those amounts. ROTH IRAs do not give you a deduction or tax savings now, but offer the potentially much greater tax savings of tax-free income when you retire.

SEP-IRA plans allow a business to make a contribution of up to 25 percent of compensation (20 percent for the owner) for all employees up to a maximum of $52,000 for 2014. SEP-IRAs can be set up by the due date of the tax return, including for extensions.

Simple IRAs allow employees to make elective deferral contributions similar to 401(k)s. However, these plans are much simpler to administer for the employer. The maximum employee deferral amount has increased to $12,000 for year 2014 plus another $2,500 for those over age 50. There is a required employer dollar-for-dollar match up to 3 percent of compensation. You are not restricted to a percentage of income.

The Simple IRA needs to be set up by Oct. 1 of the tax year for which it is to take effect. Employee contributions need to be elected before they are paid, with contributions withheld from their pay and deposited into the plan.

Many sole proprietors who run a business by themselves or with their spouse, without any other employees, have set up Single K Plans. These are similar to 401(k) plans but are much easier to administer. With them you can defer up to $17,500 per year (plus another $5,500 if you are over age 50). The overall limits of $17,500 ($23,000 for over age 50) for deferred and $52,000 ($57,500 for over age 50) total contributions apply to the aggregate of all plans a taxpayer participated in during the year. Sometimes taxpayers inadvertently contribute over the limit, especially when they switch employers and the new employer doesn’t know about contributions previously made. Excess contributions need to be withdrawn by the due date of the return to avoid a penalty.

A retirement savings contribution credit also is available if your adjusted gross income is under certain limits: married filing joint ($59,000), head of household ($44,250) and single ($29,500). Above these amounts the credit is reduced and eventually eliminated.

The IRA and pension laws are more complex than this brief summary can elaborate. You will want to contact your tax professional and financial planner to learn how to best utilize the saving opportunities open to you.

Both Simple IRAs and Single K Plans must be set up before the end of the tax year. It is too late to set up for 2013. SEP-IRA plans can be set up by the due date of the return, including for extensions, so you can still set one up for 2013.