You don't have to be large and well funded. You do have to have your own SEP-IRA, rather than a regular IRA, and almost any self-employed person could do that. I am self-employed, my business is essentially a sole proprietorship, and I get the higher limits because of the type of IRA.

So the question is really: why do some people only get to save $7k a year in an IRA and others get to save much, much more?

I never wrote about self employed, I wrote

>employees of small and less well funded businesses

For example, a startup without the funds or time to do all the HR to allow for 401ks is disadvantaged because their employees cannot contribute as much to a retirement account as someone who works for a business that offers a 401k (or for themselves).

A person has the following choices:

1) work for a business offering a 401k (usually larger, well funded, etc)

2) work for themselves

3) work for a small, upstart business (usually smaller, not as well funded, etc)

Why does working for #3 disallow you from saving as much for retirement? Why are tax advantaged retirement savings a function of your employer at all?

Same for paying for health insurance with pre-tax income.