Self-employed retirement plans Huntington Beach, CA. The freedom of being your own boss in Huntington Beach, CA is one of the best aspects of being self-employed. However, this freedom often comes with a lack of security, especially when it comes to retirement savings, since you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from exploring their options. In addition to enjoying a financially stable retirement, partnering with a financial advisor in Huntington Beach, CA to establish your self-employed retirement plan offers significant tax advantages that enable you to move your business forward.
Few Huntington Beach, CA investment consulting and retirement planning firms understand the needs of self-employed individuals as well as Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and Correct Capital have a rich history of assisting business owners in their retirement planning needs. We understand that your professional and personal aspirations go far beyond basic numbers, and we work tirelessly to provide personalized solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Huntington Beach, CA, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a self-employed financial advisor in Huntington Beach, CA today.
Why Huntington Beach, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also offer immediate benefits today. From flexible contributions to substantial tax savings, working with a financial advisor in Huntington Beach, CA enables you to design your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
When your earnings vary from year to year, a plan like a SEP IRA or Solo 401(k) gives you the option to adjust how much you save:
- Customizable Contributions: Save extra during high-income years and cut back when income is lower, so that your plan aligns with your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw tax-free later—a wise move if you expect your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, so you can keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to grow.
- State-Specific Incentives: Based on your location, you might access additional tax breaks as a business owner. These regional incentives make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax 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
Building a secure retirement isn’t only about how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and other assets serves to reduce risk while helping to grow your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund ensures you don’t dipping into savings during financial hardships and incurring penalties.
Plan for the Future of Your Huntington Beach, CA Business
Preparing for retirement also helps you plan ahead for what’s next with your Huntington Beach, CA business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain your personal assets and don’t transfer with the business. These accounts offer the reliable income you’ll need during retirement. It’s important to note that while the sale of a business usually creates a capital gain, contributions to retirement accounts are subject to yearly maximums (e.g., up to $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you are required to pay when you transfer your business.
- Succession Planning: If you’re passing the business on, your retirement accounts offer financial security during the change. You may also work with a financial advisor with expertise in succession and retirement planning to help with taxes on the sale.
With the right retirement plan, you gain control over your financial future, reduce your tax burden, and create a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Huntington Beach, CA Now?
There’s no denying that time is one of the most crucial factors when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a bigger financial cushion but also minimizes the financial burden of playing catch-up as you get older. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings may cause a substantial impact on the total you’ll have when you retire. The main reason is compound interest—the concept where your investments earn returns, and those returns, then, earn even more returns. The longer your money has to grow, the more significant the benefit of this growth.
Example: Alex and Taylor are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor waits until age 40 but contributes $7,500 annually to bridge the gap.
By age 65, with an assumption of 7% annual return:
- Alex puts in $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time may result in substantial growth. Here’s a simple scenario showing the power of compounding:
- 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: Saving the same $200 per month would result in only $235,412.97* by age 65—a gap of over $260,000, simply due to a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to meet your retirement goals.
*The figures provided in this example represent estimates derived from 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. The scenarios provided are intended as illustrative examples and cannot predict actual future outcomes. Actual results may vary due to elements like market conditions, fees, and personal factors. 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 Huntington Beach, CA, it can be tempting to put more emphasis on reinvesting in your business rather than saving for retirement. Even so, starting a plan now enables you to:
- Benefit from growth that is tax-deferred or tax-free withdrawals in the future.
- Take advantage of flexible contributions that align with your earnings.
- Create a long-term safety measure that ensures stability, no matter how your business changes.
The sooner you start, the less you’ll need to worry about catching up later in life. Building your retirement savings today means taking control of your financial future and creating for yourself the opportunity to turn your attention to your objectives—both for your golden years and your Huntington Beach, CA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for entrepreneurs in Huntington Beach, CA, each offering its own pros and cons. A financial advisor is available to help you evaluate the pros and cons of each plan and identify the one best suited for your unique situation. Typically, your self-employed retirement plan options in Huntington Beach, CA consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that include specific tax advantages. In a standard IRA, contributions are typically tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are taxed as income. In contrast, Roth IRA contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are tax-free. In both accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are accessible for individuals with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs serves as a retirement savings option that enables 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) cannot make additional contributions above 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 set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for entrepreneurs facing cycles of high revenue and low revenue. Unlike other plans, SEP IRAs lack costly startup or administrative fees.
SEPs operate like conventional IRAs, where the contributions are tax-deferred and withdrawals are taxed as income.
Eligibility: Both employers and self-employed individuals can establish 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
For self-employed individuals, the contribution you can make 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 savings option for the self-employed intended for businesses without employees or where the only employee is a spouse. Solo 401(k)s are similar to employer-sponsored 401(k) plans, and allow you to contribute as both the employer and the employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the extra savings options can be balanced by more constrained investment avenues. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which share the same tax benefits as their IRA contribution counterparts.
Eligibility: This plan is exclusively for 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 can make two types of contributions:
- Employee contributions of up to 100% of your earned income from self-employment, subject to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 for those who turn 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your net earnings from self-employment, which is your 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+ (as of 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans represents a type of retirement plan that provides a set amount to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but lets individuals clearly understand exactly how much they'll have in retirement. This option is ideal for higher-income professionals who are focused on saving a large amount for retirement and can commit to making larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxable as income in retirement.
Eligibility: Self-employed professionals operating a solo business or with a small staff of under five are eligible to open an individual defined benefit plan, but it's generally advised for people above age 50 who make $250,000 or more annually. In most cases, 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)
- Organizations that already put in 3-4% and are willing to do more
- Organizations that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions requires calculation from an actuary using your income, age, and retirement goals. Contribution limits change annually.
The Importance of a Financial Advisor in Huntington Beach, CA for Your Self-Employed Retirement Plan
A financial advisor in Huntington Beach, CA experienced with retirement plans for the self-employed can be an essential partner for entrepreneurs. They have the expertise to help navigate the complexities of retirement planning and develop a personalized approach that aligns with your goals. A financial advisor in Huntington Beach, CA will evaluate your financial situation, identify your risk preferences, and guide you in choosing wisely about saving and investing for retirement. A key part of what we do for you includes:
- Assist in selecting a plan that aligns with your objectives and circumstances
- Further adapt the plan to your needs even further
- Adopt a written plan that complies with IRS regulations
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan to keep it aligned with your goals
- Provide ongoing education and advice to help you navigate your retirement journey
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Huntington Beach, CA: Correct Capital's Process
Self-employed individuals in Huntington Beach, CA who don’t have the time or expertise to oversee their retirement savings strategy on their own may end up overwhelmed when faced with their choices. Through our team at Correct Capital, our Huntington Beach, CA financial advisors take on the lion's share of your savings plan setup for you, working to make meeting your future savings targets as easy as possible for you. We can help you get set 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 we're a good fit for you and your business. This brief introduction helps us understand what you're looking for with no pressure or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including your employee count, your present financial standing, and your long-term savings targets. This enables us to craft a tailored approach designed just for you.
- Review Your Plan: Once we've developed 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 understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can initiate your savings journey. As time goes on, we'll check in and track your progress to ensure it stays suited to your needs.
Our Huntington Beach, CA financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Huntington Beach, CA 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 Huntington Beach, CA
To you, your business is more than "just a business", and your Huntington Beach, CA financial advisors must deliver 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 Huntington Beach, CA clients our I.O.U. promise: all guidance we provide 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.
