Self-employed retirement plans Chula Vista, CA. The flexibility of owning your own business in Chula Vista, CA is one of the best aspects of working for yourself. However, this freedom often comes with certain challenges, especially when it comes to planning for retirement, because you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider exploring their options. In addition to enjoying a more secure retirement, partnering with a financial advisor in Chula Vista, CA to establish your self-employed retirement plan can provide significant tax advantages that allow both you and your business to thrive.
Few Chula Vista, CA wealth management and retirement planning firms truly grasp the challenges faced by entrepreneurs better than Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (check out our story here), and Correct Capital have a rich history of helping businesses with their retirement planning needs. We understand that your goals for your business and retirement aren’t limited to just monetary concerns, and we are dedicated to provide personalized solutions aligned with your vision. Keep reading to learn more about your self-employed retirement plan options in Chula Vista, CA, or call Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Chula Vista, CA today.
Why Chula Vista, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also provide tangible benefits today. From flexible contributions to substantial tax savings, working with a financial advisor in Chula Vista, CA helps you design your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) provides the flexibility to tailor how much you save:
- Customizable Contributions: Save extra during high-income years and cut back when your earnings dip, so your plan works with your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw your savings tax-free down the road—a smart decision if you believe your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, so you can keep more of your hard-earned money.
- 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 might access extra credits as a sole proprietor. These state-level incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can take advantage of a credit of up to 50% of the first $2,000 they contribute a retirement plan, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Spreading your investments across varied stocks, bonds, and alternatives serves to reduce risk while still growing your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund helps you avoid using your retirement funds during financial hardships and incurring penalties.
Plan for the Future of Your Chula Vista, CA Business
A thoughtful retirement strategy enables you to think through what’s next with your Chula Vista, CA business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and don’t transfer with the business. These plans can provide the steady income you’ll need later on. Keep in mind that while selling a business often leads to a capital gain, deposits into these plans are capped at annual limits (e.g., a maximum of $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, based on plan compensation).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you’ll owe when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts provide financial security as you make this shift. You may also work with a financial advisor with expertise in succession and retirement planning to reduce taxes associated with the transaction.
With the right retirement plan, you manage your financial future, reduce your tax burden, and establish a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Chula Vista, CA Now?
There’s no denying that time is one of the most valuable assets for building your retirement fund. Beginning sooner rather than later not only allows you to build a more substantial retirement fund but also reduces the pressure of catching up later in life. This is why it is beneficial to start now:
The Cost of Waiting
Waiting to start your retirement fund may cause a major impact on the savings you’ll have when you retire. The main reason is compound interest—the financial principle where your investments grow, and those returns, then, accumulate even more returns. The greater time span your money has to grow, the greater the benefit of this growth.
Example: Two individuals, Alex and Taylor are both self-employed individuals. They each aim to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor delays savings until age 40 but contributes $7,500 annually to bridge the gap.
By age 65, with an assumption of 7% annual return:
- Alex invests $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time can lead to impressive growth. Here’s a simple scenario showing the impact of compound interest:
- Starting at age 25: If you invest $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month yields only $235,412.97* by age 65—a difference of over $260,000, all because of a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to achieve your retirement goals.
*The figures provided in this example represent estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. This information is intended as illustrative examples and cannot predict actual future outcomes. Your individual results may differ due to elements like market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Chula Vista, CA, it is often the case that you focus more on reinvesting in your business rather than saving for retirement. Even so, beginning a plan now allows you to:
- Take advantage of growth that is tax-deferred or penalty-free withdrawals in the future.
- Benefit from adjustable savings that align with your earnings.
- Create a financial cushion that ensures stability, no matter how your business changes.
Getting started now, the less you’ll be required to worry about making up for lost time later in life. Saving for retirement now means taking control of your financial future and creating for yourself the opportunity to concentrate on your goals—both for your golden years and your Chula Vista, CA business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for those working for themselves in Chula Vista, CA, each offering its own benefits and trade-offs. A financial advisor will guide you to understand the pros and cons of each plan and choose the one ideal for your needs. In most cases, your self-employed retirement plan options in Chula Vista, CA consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that offer key tax perks. In a standard IRA, the money you contribute is often tax-deductible, and earnings grow without immediate taxation, but money taken out during retirement are taxable. In contrast, Roth IRA contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are tax-free. In both cases, withdrawals are penalty-free if you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are open to those with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs serves as a retirement savings option that enables entrepreneurs to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a sole proprietor, you (the employee) would not be able to contribute more than the 25% you (the employer) already contributed. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. You may choose to contribute a fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA is a good option for businesses that experience cycles of high revenue and low revenue. Unlike other plans, SEP IRAs lack expensive setup or ongoing fees.
SEPs function like conventional IRAs, where contributions are made with pre-tax money and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 25% of compensation, or
- $70,000 for 2025
For self-employed individuals, the contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan intended for businesses with no employees or where the only employee is a spouse. This type of plan are similar to employer-sponsored 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the additional opportunities often come with more constrained investment avenues. 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 may establish and contribute to a solo 401(k).
Contribution Limits: If you are self-employed with a solo 401(k) plan, you can make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) must not surpass 25% of your net earnings from self-employment, which is your net profit minus half of your self-employment tax and the employee contributions you made.
Total contributions are capped at $70,000, or $77,500 if you're over age 50 (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that guarantees a set amount to entrepreneurs upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but enables participants to determine the precise amount they'll have in retirement. This plan is ideal for higher-income self-employed individuals who aim to accumulate a substantial amount for retirement and are prepared to contribute sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income in retirement.
Eligibility: Any self-employed individual managing a one-person company or with less than five employees may establish an individual defined benefit plan, but it's most commonly advised for people above age 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans include:
- Business owners or partners who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% but are open to increasing contributions
- Businesses with proven consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions must be determined by an actuary using your income, age, and retirement goals. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Chula Vista, CA for Your Self-Employed Retirement Plan
A financial advisor in Chula Vista, CA experienced with retirement plans for the self-employed can be an important asset for those working for themselves. They offer the knowledge to assist navigate the complexities of retirement planning and develop a customized plan that aligns with your goals. An expert in your area will evaluate your financial situation, understand your risk tolerance, and guide you in making informed decisions about saving and investing for retirement. Part of what we do for you features:
- Help you choose a plan that best fits your needs and goals
- Tailor the plan to your needs even further
- Formalize a plan in writing that complies with IRS regulations
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Review and modify your plan to keep it aligned with your goals
- Deliver continuous support and financial insights throughout your retirement planning process
- Maximize what you receive in retirement by making the most of your social security
Self-Employed Retirement Plans in Chula Vista, CA: Correct Capital's Process
Self-employed individuals in Chula Vista, CA who lack the time, interest, or knowledge to handle their self-employed retirement plan themselves can become overwhelmed by their options. Through our team at Correct Capital, our Chula Vista, CA financial advisors handle the bulk of your savings plan setup for you, working to make meeting your financial objectives as hassle-free as possible for you. We can help you get set up your self-employed retirement plan in just four steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team will assess if we're a good fit for you and your business. This short conversation lets us understand what you're looking for with zero commitment or extensive time commitment on your part.
- Gather Information: If we both decide to move forward, we'll gather information, including whether you have employees, your present financial standing, and your future objectives. This allows us to put together a personalized strategy that aligns with your goals.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll schedule a meeting and go over your plan thoroughly to make sure it's clear and understand how it best correlates to your needs.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can start saving. Over the course of our partnership, we'll meet with you and track your progress to keep it tailored to your evolving circumstances.
Our Chula Vista, CA financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are required by law and ethical standards to prioritize your needs above all else.
Other financial advisory services we offer in Chula Vista, CA include:
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
Call Correct Capital for Your Self-Employed Retirement Plan in Chula Vista, CA
Your business isn't "just a business" to you, and your Chula Vista, CA financial advisors should provide more than basic financial recommendations. With Correct Capital, we take the time to get to know our clients and their businesses to provide tailored self-employed retirement plans. All our clients in Chula Vista, CA benefit from our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To get started on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
