Self-employed retirement plans Raleigh, NC. The independence of owning your own business in Raleigh, NC is one of the best aspects of having a self-directed career. Even so, this independence often comes with potential drawbacks, particularly in terms of planning for retirement, because you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from looking into other possibilities. In addition to enjoying a more comfortable retirement, partnering with a financial advisor in Raleigh, NC to establish your self-employed retirement plan delivers significant tax advantages that allow you to move your business forward.
Few Raleigh, NC investment consulting and retirement planning firms truly grasp the challenges faced by small business owners better than Correct Capital. Our founder's father was a small business owner himself (check out our story here), and Correct Capital are deeply experienced in assisting business owners in their retirement planning needs. We understand that your business and retirement aspirations extend well past simple financial figures, and we work tirelessly to offer personalized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Raleigh, NC, or call Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Raleigh, NC today.
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Why Raleigh, NC Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also offer tangible benefits today. With customizable contribution options to significant tax savings, partnering with a financial advisor in Raleigh, NC allows you to design your retirement plan to suit your individual circumstances.
Flexibility That Fits Your Income
For those with fluctuating income over time, a plan like a SEP IRA or Solo 401(k) gives you the option to modify how much you save:
- Customizable Contributions: Set aside more during high-income years and reduce savings when your earnings dip, so that your plan aligns with your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, so you can withdraw your savings tax-free down the road—a smart decision if you believe your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) lower your taxable income, so you can keep more of your earnings.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to grow.
- State-Specific Incentives: Depending on where you live, you could qualify for extra tax breaks as a self-employed individual. These state-level incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can apply for a credit of up to 50% of the first $2,000 put into a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Spreading your investments across varied stocks, bonds, and other assets serves to mitigate financial risk while still growing your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund ensures you don’t tapping into your nest egg during challenging periods and risking extra costs.
Plan for the Future of Your Raleigh, NC Business
Retirement planning enables you to prepare for what’s next with your Raleigh, NC business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These plans ensure the steady income you’ll need later on. Keep in mind that while selling your business results in a capital gain, contributions to retirement accounts are restricted by contribution limits (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you’ll owe when you transfer your business.
- Succession Planning: If you’re passing the business on, your retirement accounts provide financial security during the change. You might want to seek advice from a financial advisor with expertise in succession and retirement planning to minimize tax burdens on the sale.
With the proper savings strategy, you manage your financial future, reduce your tax burden, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Raleigh, NC Now?
Time is one of the most valuable factors when it comes to saving for retirement. Getting a head start not only allows you to build a larger nest egg but also minimizes the financial burden of playing catch-up as you get older. This is why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund could lead to a significant impact on the amount you’ll have when you retire. The biggest reason is compound interest—the concept where your investments earn returns, and those returns, subsequently, earn even more returns. The greater time span your money has to grow, the greater the effect of compounding.
Example: Two individuals, Alex and Taylor are both self-employed professionals. They each aim to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor waits until age 40 but puts away $7,500 annually to bridge the gap.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and accumulates $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently can lead to substantial growth. Take a look at this scenario showing the power of compound interest:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an projected return of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month would result in only $235,412.97* by age 65—a difference of over $260,000, just from a 10-year delay.
The earlier you begin, the less effort required each year to reach your retirement goals.
*These calculations represent estimates derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. These examples are intended as illustrative examples and do not guarantee future performance. Outcomes may change depending on variables including market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in Raleigh, NC, it can be tempting to prioritize reinvesting in your business over saving for retirement. Even so, beginning a plan now gives you the chance to:
- Benefit from growth that is tax-deferred or tax-free withdrawals in the future.
- Enjoy adjustable savings that change with your cash flow.
- Establish a long-term safety measure that offers peace of mind, no matter how your business evolves.
Getting started now, the less you’ll have to worry about making up for lost time later in life. Taking steps toward your retirement goals today means taking control of your financial future and giving yourself the opportunity to turn your attention to your goals—both for your golden years and your Raleigh, NC business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for entrepreneurs in Raleigh, NC, each offering its own benefits and trade-offs. A financial advisor will guide you to understand the advantages and disadvantages of each choice and identify the one most suitable for your needs. Typically, your self-employed retirement plan options in Raleigh, NC include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that provide specific tax advantages. In a standard IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but money taken out during retirement are taxable. In contrast, with Roth IRAs, you contribute from post-tax earnings, but eligible distributions during retirement, including earnings, are tax-free. In both accounts, withdrawals don’t incur penalties as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are open to those with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA is a retirement plan that permits those who are self-employed to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role more than the 25% you (the employer) already contributed. If you have employees, you must contribute the same amount for them as you do for yourself. It's your choice whether to contribute a set monetary value or a percentage of wages to employee accounts. This type of plan is a good option for companies with cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs work like traditional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Employers of any type, including self-employed individuals can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 25% of compensation, or
- $70,000 for 2025
As a self-employed person, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), commonly known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan designed for businesses without employees or where the only employee is a spouse. These plans function similarly to employer-sponsored 401(k) plans, and allow you to contribute as both an employee or an employer with pre-tax money. This offers more savings versus SEPs or IRAs; however, the increased savings potential can be balanced by more limited investment options. Using a solo 401(k), you can make either traditional or Roth deferrals, which have the same tax benefits as their IRA contribution counterparts.
Eligibility: Solo 401(k)s are available solely to business owners and their spouses can set up and contribute to a solo 401(k).
Contribution Limits: If you are self-employed with a solo 401(k) plan, you are allowed to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, up to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your net self-employment income, which is your net profit minus half of your self-employment tax and the employee contributions you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that delivers a pre-established payout to self-employed individuals upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but allows self-employed individuals to know exactly how much they'll have in retirement. This option is recommended for high-earning professionals who are focused on saving a large amount for retirement and can commit to making sizeable contributions. Contributions offer tax-deferred growth, and withdrawals are taxable as income during retirement.
Eligibility: Self-employed professionals running an owner-only business or with less than five employees can open an individual defined benefit plan, but it's typically suggested for those over 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans tend to be:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Organizations that already put in 3-4% but are open to increasing contributions
- Companies showing consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution requires calculation from an actuary determined by your earnings, age, and retirement objectives. Contribution limits change annually.
The Importance of a Financial Advisor in Raleigh, NC for Your Self-Employed Retirement Plan
Partnering with an advisor in Raleigh, NC experienced with retirement plans for the self-employed serves as an essential partner for self-employed individuals. They offer the knowledge to assist navigate the complexities of retirement planning and design a customized plan that aligns with your goals. A financial advisor in Raleigh, NC will assess where you stand financially, understand your risk tolerance, and guide you in selecting the best options about saving and investing for retirement. Included in what we do for you includes:
- Guide you in choosing a plan that best fits your needs and goals
- Tailor the plan to your needs even further
- Create a written plan as required by IRS rules
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Review and modify your plan to keep it aligned with your goals
- Provide ongoing education and advice to help you navigate your retirement journey
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Raleigh, NC: Correct Capital's Process
Raleigh, NC business owners who aren’t equipped with the time or understanding to manage their retirement savings strategy independently often feel overwhelmed when faced with their available plans. At Correct Capital, our Raleigh, NC financial advisors handle the majority of your savings plan setup for you, and strive to ensure meeting your financial objectives as hassle-free as possible for you. We are here to assist you in setting up your self-employed retirement plan in four simple steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if our services align for you and your business. This short conversation allows us to get a sense of your goals with no pressure or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll request information, including your employee count, your present financial standing, and your retirement goals. This allows us to put together a personalized strategy designed just for you.
- Review Your Plan: When we finalize a plan using the information you provide, we'll meet with you and discuss your plan in detail to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can start saving. Over the course of our partnership, we'll meet with you and monitor your plan to ensure it stays suited to your needs.
Our Raleigh, NC financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Raleigh, NC include:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
- Fiduciary Financial Advisor
Call Correct Capital for Your Self-Employed Retirement Plan in Raleigh, NC
To you, your business is more than "just a business", and your Raleigh, NC financial advisors need to offer more than simply sound financial advice. With Correct Capital, we take the time to get to know our clients and their businesses to create customized self-employed retirement plans. We offer all our Raleigh, NC clients our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To get started on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
