Self-employed retirement plans Chandler, AZ. The independence of being your own boss in Chandler, AZ is one of the best aspects of working for yourself. However, this freedom sometimes brings with certain challenges, especially regarding planning for retirement, since you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from understanding their retirement options. In addition to enjoying a financially stable retirement, seeking advice from a financial advisor in Chandler, AZ to set up your self-employed retirement plan delivers significant tax advantages that allow your business to grow and succeed.
Few Chandler, AZ financial advisory and retirement planning firms are as attuned to the requirements of self-employed individuals better than Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (read more of our story here), and our firm are deeply experienced in assisting business owners in their retirement planning needs. We recognize that your business and retirement aspirations extend well past basic numbers, and we work tirelessly to create customized solutions aligned with your vision. Keep reading to learn more about your self-employed retirement plan options in Chandler, AZ, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a self-employed financial advisor in Chandler, AZ today.
Why Chandler, AZ Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also offer immediate benefits today. With customizable contribution options to significant tax savings, working with a financial advisor in Chandler, AZ enables you to customize your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income over time, a plan like a SEP IRA or Solo 401(k) provides the option to adjust how much you save:
- Customizable Contributions: Save extra during successful years and cut back when revenues are down, so your plan works with your current income.
- Roth Options: Choosing a Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw without tax penalties in the future—a smart decision if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA shrink your tax liability, allowing you to keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to compound.
- State-Specific Incentives: Based on your location, you could qualify for state-specific deductions as a business owner. These regional 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 contributed a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement goes beyond just how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Spreading your investments across varied asset classes like stocks and bonds serves to reduce risk while still growing your savings.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business helps you avoid tapping into your nest egg during financial hardships and facing tax penalties.
Plan for the Future of Your Chandler, AZ Business
Retirement planning can assist you plan ahead for what’s next with your Chandler, AZ business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s stay in your name and don’t transfer with the business. These plans can provide the reliable income you’ll need later on. It’s important to note that while selling a business often leads to a capital gain, retirement plan contributions are restricted by contribution limits (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, factoring in catch-up contributions, depending on plan details).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you might face when you sell your business.
- Succession Planning: If you’re passing the business on, your nest egg ensure financial security as you make this shift. You might want to work with a financial advisor experienced in both succession and retirement strategies to help with taxes associated with the transaction.
With the proper savings strategy, you gain control over your financial future, lower your tax bill, and create a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Chandler, AZ Now?
There’s no denying that time is one of the most crucial resources for building your retirement fund. Starting early not only lets you accumulate a larger nest egg but also lowers the financial burden of catching up later in life. This is why it is beneficial to start now:
The Cost of Waiting
Delaying your retirement savings may cause a substantial impact on the amount you’ll have when you reach retirement age. The main reason is compound interest—the financial principle where your investments generate earnings, and those returns, subsequently, generate even more returns. The greater time span your money has to grow, the greater the effect of this compounding process.
Example: Two individuals, Alex and Taylor are both self-employed professionals. Both of them want 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 puts away $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex invests $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments invested steadily may result in significant growth. Consider this example showing the effect of compound interest:
- Starting at age 25: If you invest $200 per month in a retirement plan with an projected return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Investing 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 less effort required each year to meet your retirement goals.
*The numbers shown in this scenario are based on estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. This information is for illustrative purposes only and are not a promise of future results. Your individual results may differ depending on elements like market conditions, fees, and individual circumstances. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in Chandler, AZ, it might seem easier to put more emphasis on reinvesting in your business rather than saving for retirement. That said, initiating a plan now allows you to:
- Benefit from tax-free future growth or penalty-free withdrawals later on.
- Enjoy contribution flexibility that align with your cash flow.
- Create a financial cushion that offers peace of mind, no matter how your business changes.
The sooner you start, the less you’ll need to worry about catching up later in life. Taking steps toward your retirement goals today means managing your financial future and giving yourself the opportunity to turn your attention to your goals—both for your golden years and your Chandler, AZ business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for entrepreneurs in Chandler, AZ, each offering its own pros and cons. A financial advisor is available to help you understand the advantages and disadvantages of each option and choose the one ideal for your circumstances. Typically, your self-employed retirement plan options in Chandler, AZ consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that offer specific tax advantages. In a conventional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but money taken out during retirement are subject to income tax. In contrast, Roth IRA contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals are penalty-free 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 are set at $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 self-employed individuals to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a independent business owner, you (the employee) would not be able to contribute above the 25% you (the employer) allocate. 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 flat-dollar amount or a percentage of wages to employee accounts. SEP IRAs works well for businesses that experience cycles of high revenue and low revenue. Unlike other plans, SEP IRAs lack costly startup or administrative fees.
SEPs work like standard IRAs, where contributions are made with pre-tax money and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed can set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are capped at the lower of:
- 25% of compensation, or
- $70,000 for 2025
As a self-employed person, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for companies that have no employees or when the sole employee is your spouse. Solo 401(k)s function similarly to traditional employer-managed 401(k) plans, and allow you to contribute as both an employer and an employee with pre-tax money. This offers more savings than SEPs or IRAs; however, the additional opportunities may be offset by more restricted investment choices. Using a solo 401(k), you can make either traditional or Roth deferrals, which offer the same tax benefits as their IRA contribution counterparts.
Eligibility: Only business owners and their spouses are eligible to open and contribute to a solo 401(k).
Contribution Limits: For self-employed individuals with a solo 401(k) plan, you have the ability to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your self-employed earnings, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) cannot exceed 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for individuals aged 50+ (in 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan offers a structured retirement solution that guarantees a fixed, predetermined benefit to self-employed individuals upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but lets individuals clearly understand what they'll receive in retirement. This plan is ideal for high-earning self-employed individuals who want to save a significant sum for retirement and are willing to make larger deposits. Contributions offer tax-deferred growth, and withdrawals incur taxes as income in retirement.
Eligibility: Self-employed professionals running an owner-only business or employing fewer than five people can open an individual defined benefit plan, but it's generally recommended for those over 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans are:
- Business owners or partners who want to invest more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% but are open to increasing contributions
- Businesses showing consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The contribution limit must be determined by an actuary using your earnings, age, and retirement objectives. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Chandler, AZ for Your Self-Employed Retirement Plan
Working with a financial advisor in Chandler, AZ specialized in self-employed retirement plans serves as an essential partner for entrepreneurs. They bring the skills needed to guide you through the challenges of retirement planning and develop a tailored strategy that matches your objectives. A financial advisor in Chandler, AZ will evaluate your financial situation, understand your risk tolerance, and help you in selecting the best options about saving and investing for retirement. A key part of what we do for you features:
- Guide you in choosing a plan that best fits your needs and goals
- Further adapt the plan to your needs even further
- Formalize a plan in writing as required by IRS rules
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Track and fine-tune your plan as needed
- Provide ongoing education and advice as you continue on the road to retirement
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Chandler, AZ: Correct Capital's Process
Self-employed individuals in Chandler, AZ who lack the time, interest, or knowledge to oversee their retirement savings strategy on their own may end up overwhelmed by their options. At Correct Capital, our Chandler, AZ financial advisors take on the majority of your retirement strategy for you, to help make meeting your retirement goals as straightforward as possible for you. We can help you get set up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team can determine if our services align for you and your business. This short conversation lets us understand what you're looking for with no obligation or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including whether you have employees, your present financial standing, and your long-term savings targets. This helps us create a personalized strategy designed just for you.
- Review Your Plan: When we finalize a plan based on the information you provide, we'll meet with you and go over your plan in detail to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll put everything in place so you can start saving. As time goes on, we'll have regular meetings and monitor your plan to keep it tailored to your evolving circumstances.
Our Chandler, AZ financial advisors and retirement plan consultants serve as fiduciary advisors, who are obligated to they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Chandler, AZ include:
- Investment Management
- 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 Chandler, AZ
To you, your business is more than "just a business", and your Chandler, AZ financial advisors should provide more than basic financial recommendations. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to deliver customized self-employed retirement plans. To every client in Chandler, AZ, we provide our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To begin on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
