Self-employed retirement plans Pembroke Pines, FL. The freedom of owning your own business in Pembroke Pines, FL is one of the greatest advantages of having a self-directed career. However, this freedom can come with a lack of security, notably in terms of retirement savings, since you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off looking into other possibilities. In addition to enjoying a more comfortable retirement, working with a financial advisor in Pembroke Pines, FL to create your self-employed retirement plan can provide significant tax advantages that help you to move your business forward.
Few Pembroke Pines, FL investment consulting and retirement planning firms understand the needs of self-employed individuals as well as 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 we are deeply experienced in supporting entrepreneurs with their retirement planning needs. We understand that your business and retirement aspirations go far beyond simple financial figures, and we are dedicated to offer tailored solutions aligned with your vision. Keep reading to learn more about your self-employed retirement plan options in Pembroke Pines, FL, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Pembroke Pines, FL today.
Why Pembroke Pines, FL 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. With customizable contribution options to significant tax savings, partnering with a financial advisor in Pembroke Pines, FL enables you to design your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) offers the option to adjust how much you save:
- Customizable Contributions: Contribute more during profitable years and scale back when revenues are down, ensuring your plan fits your financial situation.
- Roth Options: 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 wise move if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Plans designed for the self-employed provide powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) lower your taxable income, allowing you to keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to accumulate.
- State-Specific Incentives: Based on your location, you could qualify for state-specific deductions as a self-employed individual. These local incentives make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can apply for a credit of up to 50% of the first $2,000 contributed 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: Allocating your investments across a mix of stocks, bonds, and alternatives serves to reduce risk while still growing your savings.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net ensures you don’t dipping into savings during financial hardships and incurring penalties.
Plan for the Future of Your Pembroke Pines, FL Business
Preparing for retirement also helps you prepare for what’s next with your Pembroke Pines, FL business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These savings ensure the steady income you’ll need in the future. Keep in mind that while selling your business results in a capital gain, contributions to retirement accounts are restricted by contribution limits (e.g., a maximum of $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: Using retirement contributions wisely can reduce the taxes you’ll owe when you transfer your business.
- Succession Planning: For those winding down or handing over their business, your nest egg offer a stable foundation through the transition. You may also work with a financial advisor experienced in both succession and retirement strategies to minimize tax burdens during the sale.
With the proper savings strategy, you can take control of your financial future, cut down your tax obligations, and create a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Pembroke Pines, FL Now?
Time is one of the most valuable assets when it comes to saving for retirement. Starting early not only helps you grow a more substantial retirement fund but also lowers the stress of saving aggressively in the future. Here’s why it makes sense to begin today:
The Cost of Waiting
Waiting to start your retirement fund can have a substantial impact on the total you’ll have when you reach retirement age. The primary reason is compound interest—the financial principle where your investments generate earnings, and those returns, then, accumulate even more returns. The more time your money has to grow, the larger the impact of compounding.
Example: Two individuals, Alex and Taylor are both self-employed individuals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor delays savings until age 40 but puts away $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and accumulates $691,184.39*.
- Taylor contributes $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time may result in impressive growth. Consider this example showing the impact of consistent growth:
- 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 leaves you with only $235,412.97* by age 65—a shortfall of over $260,000, simply due to a 10-year delay.
Saving early, the less you need to save each year to achieve your retirement goals.
*The numbers shown in this scenario are estimates calculated using NerdWallet’s Compound Interest Calculator, based on 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 meant to provide general guidance and cannot predict actual future outcomes. Your individual results may differ based on factors such as market conditions, fees, and individual circumstances. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in Pembroke Pines, FL, it is often the case that you focus more on reinvesting in your business over saving for retirement. However, initiating a plan now enables you to:
- Benefit from tax-deferred growth or tax-free withdrawals in the future.
- Enjoy flexible contributions that adapt to your earnings.
- Create a financial cushion that ensures stability, no matter how your business changes.
Starting early, the less you’ll need to worry about playing catch-up later in life. Saving for retirement now means taking control of your financial future and giving yourself the opportunity to concentrate on your goals—both for your retirement years and your Pembroke Pines, FL business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for self-employed individuals in Pembroke Pines, FL, each providing its own pros and cons. A financial advisor is available to help you understand the pros and cons of each option and choose the one most suitable for your unique situation. In most cases, your self-employed retirement plan options in Pembroke Pines, FL include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that offer distinct tax benefits. In a conventional IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but money taken out during retirement are subject to income tax. In contrast, with Roth IRAs, you contribute using income already taxed, but eligible distributions during retirement, including earnings, are not taxed. In both cases, 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 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: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that enables self-employed individuals to set aside a portion of their self-employment income. Contributions must come from an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) already contributed. If you have employees, you must contribute the same amount for them as you do for yourself. You have the flexibility to contribute a fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA is a good option for companies with cycles of high revenue and low revenue. Unlike other plans, SEP IRAs are free of expensive setup or ongoing fees.
SEPs work like conventional IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
Eligibility: Employers of any type, including self-employed individuals can set up 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 amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses with no employees or where the only employee is a spouse. Solo 401(k)s are similar 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 versus SEPs or IRAs; however, the extra savings options often come with more restricted investment choices. 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 are eligible to open 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-employed earnings, up to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 for those aged 50 and above, 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 self-employment income, which is defined as net profit minus half of your self-employment tax and the elective deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (in 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 delivers a set amount to business owners upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but allows self-employed individuals to know the precise amount they'll get in retirement. This option is best suited for higher-income entrepreneurs who want to save a significant sum for retirement and are willing to make substantial contributions. Contributions are tax deferred, and withdrawals incur taxes as income upon retirement.
Eligibility: Any self-employed individual managing a one-person company or employing fewer than five people are eligible to open an individual defined benefit plan, but it's typically recommended for people above age 50 who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans include:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 for individuals 50 and older)
- Organizations that already put in 3-4% with plans to contribute more
- Companies that have demonstrated consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution requires calculation from an actuary based on your income, age, and retirement goals. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Pembroke Pines, FL for Your Self-Employed Retirement Plan
Working with a financial advisor in Pembroke Pines, FL experienced with retirement plans for the self-employed is an essential partner for self-employed individuals. They offer the knowledge to assist guide you through the challenges of retirement planning and develop a customized plan that reflects your aspirations. A financial advisor in Pembroke Pines, FL will assess where you stand financially, understand your risk tolerance, and help you in selecting the best options about saving and investing for retirement. Included in what we do for you involves:
- Assist in selecting a plan that suits your unique requirements
- Further adapt the plan to fit you personally even further
- Create a written plan as required by IRS rules
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Monitor and adjust your plan to keep it aligned with your goals
- Offer continued financial education and guidance to help you navigate your retirement journey
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Pembroke Pines, FL: Correct Capital's Process
Pembroke Pines, FL business owners who lack the time, interest, or knowledge to manage their own retirement planning independently often feel overwhelmed when faced with their available plans. At Correct Capital, our Pembroke Pines, FL financial advisors handle the majority of your savings plan setup for you, and strive to ensure meeting your retirement goals as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if we're suited to your needs for you and your business. This initial call helps us learn about your needs with no obligation or extensive time commitment on your part.
- Gather Information: Should we agree to proceed, we'll request information, including how many employees you have (if any), your current financial situation, and your future objectives. This allows us to put together a custom plan designed just for you.
- Review Your Plan: When we finalize a plan based on the information you provide, we'll sit down with you and go over your plan thoroughly to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can start saving. As time goes on, we'll meet with you and review your strategy to ensure it stays suited to your needs.
Our Pembroke Pines, FL financial advisors and retirement plan consultants serve as fiduciary advisors, who are obligated to they are committed by law and ethics to act in your best interest.
Other financial advisory services we offer in Pembroke Pines, FL include:
- Investment Planning
- Retirement Financial Planning
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Call Correct Capital for Your Self-Employed Retirement Plan in Pembroke Pines, FL
Your business isn't "just a business" to you, and your Pembroke Pines, FL financial advisors should provide more than simply sound financial advice. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to create personalized self-employed retirement plans. To every client in Pembroke Pines, FL, we provide our I.O.U. promise: all of the advice you get from us 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.
