[broiler]

A self employed person with no employees should rarely set up a self employed 401k. The only reason I leave in rarely is because there are certain situations (low income and little chance of making near the income limits of the other plans). The only benefit of a 401k in this situation is the lower reporting requirements for a 401k plan. Once you get past about $75k in income, the profit sharing plan is a much better option. If you have non-family (spouse and children) employee, the 401k route might be the better option.

Also, a sole proprietor is considered to be their own employer and all of the contributions are employer contributions. Therefore, a corporate setup is not necessary for retirement considerations.