Self-employed retirement plans Gilbert, AZ. The flexibility of being your own boss in Gilbert, AZ is one of the best aspects of working for yourself. That said, this flexibility sometimes brings with certain challenges, particularly regarding planning for retirement, as you don't have the option 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, working with a financial advisor in Gilbert, AZ to establish your self-employed retirement plan offers significant tax advantages that enable both you and your business to thrive.
Few Gilbert, AZ wealth management and retirement planning firms are as attuned to the requirements of entrepreneurs quite like Correct Capital. Our founder's father was a small business owner himself (check out our story here), and our firm take pride in assisting business owners in their retirement planning needs. We know that your goals for your business and retirement go far beyond simple financial figures, and we work tirelessly to create tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Gilbert, AZ, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Gilbert, AZ today.
Why Gilbert, AZ Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver tangible benefits today. Offering flexibility in contributions to significant tax savings, consulting a financial advisor in Gilbert, AZ helps you create your retirement plan to align with your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) offers the flexibility to tailor how much you save:
- Customizable Contributions: Save extra during high-income years and scale back when income is lower, ensuring your plan works with your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw without tax penalties in the future—an advantageous choice if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, allowing you to keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you may be eligible for additional deductions as a business owner. These regional incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements 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 goes beyond just how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across different stocks, bonds, and other assets can help mitigate financial risk while still growing your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund ensures you don’t tapping into your nest egg during tough times and facing tax penalties.
Plan for the Future of Your Gilbert, AZ Business
A thoughtful retirement strategy can assist you think through what’s next with your Gilbert, AZ business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These accounts can provide the steady income you’ll need later on. Remember that while selling your business results in a capital gain, retirement plan contributions are capped at annual limits (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, factoring in catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you might face when you pass on your business.
- Succession Planning: If you’re passing the business on, your retirement accounts ensure the funds you need as you make this shift. You might want to work with a financial advisor who specializes in succession planning and retirement accounts to reduce taxes on the sale.
With the proper savings strategy, you manage your financial future, reduce your tax burden, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Gilbert, AZ Now?
Time remains one of the most valuable assets when it comes to saving for retirement. Starting early not only allows you to build a more substantial retirement fund but also minimizes the financial burden of saving aggressively in the future. Here’s why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement could lead to a significant impact on the amount you’ll have when you stop working. The biggest reason is compound interest—the powerful process where your investments earn returns, and those returns, in turn, generate even more returns. The longer your money has to grow, the larger the benefit of compounding.
Example: Two individuals, Alex and Taylor are both self-employed professionals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but contributes $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex invests $180,000 and achieves a total of $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently may result in significant growth. Take a look at this scenario showing the impact of compound interest:
- Starting at age 25: If you invest $200 per month in a retirement plan with an average annual return of 7%, you’ll accumulate $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 gap of over $260,000, all because of a 10-year delay.
Starting sooner, the less you need to save each year to achieve your retirement goals.
*The numbers shown in this scenario are estimates derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. The scenarios provided are meant to provide general guidance and cannot predict actual future outcomes. Outcomes may change based on factors such as market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Gilbert, AZ, it might seem easier to put more emphasis on reinvesting in your business over saving for retirement. That said, initiating a plan now enables you to:
- Take advantage of growth that is tax-deferred or penalty-free withdrawals later on.
- Take advantage of flexible contributions that align with your income.
- Create a long-term safety measure that offers peace of mind, no matter how your business changes.
Starting early, the less you’ll be required to worry about playing catch-up later in life. Building your retirement savings today means managing your financial future and allowing yourself the opportunity to concentrate on your goals—both for your retirement years and your Gilbert, AZ business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for those working for themselves in Gilbert, AZ, each offering its own pros and cons. A financial advisor can help you understand the benefits and drawbacks of each plan and identify the one ideal for your circumstances. Generally speaking, your self-employed retirement plan options in Gilbert, AZ consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that offer distinct tax benefits. In a traditional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but retirement distributions are subject to income tax. In contrast, Roth IRA contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are not taxed. In both accounts, withdrawals don’t incur penalties if you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are available to anyone with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs offers a way to save for retirement that permits entrepreneurs to set aside a portion of their self-employment income. Contributions are strictly employer contributions 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, it's required to contribute the same amount for them as you do for yourself. It's your choice whether to contribute a flat-dollar amount or a percentage of wages to employee accounts. This type of plan works well for businesses that experience fluctuating revenue streams. Unlike other plans, SEP IRAs lack costly startup or administrative fees.
SEPs function like traditional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Employers of any type, including self-employed individuals can open 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
If you’re self-employed, the contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses with no employees or if the only employee is your spouse. Solo 401(k)s are similar to standard 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the additional opportunities can be balanced by more constrained investment avenues. 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: 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 have the ability to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your self-employment income, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 for those aged 50 and above, or $34,750 for those who turn 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) are limited to 25% of your net self-employment income, which is calculated as net profits less half of your self-employment tax and the employee contributions you made.
The total contribution cannot exceed $70,000, or $77,500 if you're over age 50 (as of 2025), $81,250 for individuals turning 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. As opposed to defined contribution plans, this plan is not influenced by market performance, but allows self-employed individuals to know the precise amount they'll get in retirement. This option is best suited for wealthier entrepreneurs who are focused on saving a substantial amount for retirement and are prepared to contribute substantial contributions. Contributions are tax deferred, and withdrawals are taxable as income in retirement.
Eligibility: Entrepreneurs operating a solo business or with a small staff of under five can open an individual defined benefit plan, but it's most commonly recommended for those over 50 who make $250,000 or more annually. Typically, good candidates for defined benefit plans tend to be:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% and are willing to do more
- Companies that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions is calculated by an actuary using your income, age, and retirement goals. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Gilbert, AZ for Your Self-Employed Retirement Plan
A financial advisor in Gilbert, AZ experienced with retirement plans for the self-employed serves as an invaluable resource for those working for themselves. They bring the skills needed to guide you through the challenges of retirement planning and design a tailored strategy that aligns with your goals. Your advisor in Gilbert, AZ will assess where you stand financially, identify your risk preferences, and assist 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
- Further adapt the plan to fit you personally even further
- Adopt a written plan as required by IRS rules
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan when necessary
- Deliver continuous support and financial insights throughout your retirement planning process
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Gilbert, AZ: Correct Capital's Process
Entrepreneurs in Gilbert, AZ who lack the time, interest, or knowledge to oversee their retirement savings strategy on their own often feel overwhelmed by their options. Through our team at Correct Capital, our Gilbert, AZ financial advisors manage the lion's share of your savings plan setup for you, to help make meeting your retirement goals as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in four simple steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team can determine if we're suited to your needs for you and your business. This brief introduction helps us get a sense of your goals with zero commitment or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including whether you have employees, your current financial situation, and your future objectives. This enables us to craft a tailored approach suited specifically for your needs.
- Review Your Plan: After we put together a plan from the information you provide, we'll schedule a meeting and review your plan step by step to ensure you understand it and show how it aligns with your goals.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can initiate your savings journey. As time goes on, we'll have regular meetings and review your strategy to ensure it stays suited to your needs.
Our Gilbert, AZ financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are legally and ethically bound to do what's in your best interest.
Other financial advisory services we offer in Gilbert, 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 Gilbert, AZ
Your business isn't "just a business" to you, and your Gilbert, AZ financial advisors must deliver more than basic financial recommendations. At Correct Capital, we focus on building a relationship with our clients and their businesses to create personalized self-employed retirement plans. We offer all our Gilbert, AZ clients our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To get started on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
