Self-employed retirement plans Cary, NC. The independence of owning your own business in Cary, NC is one of the best aspects of working for yourself. However, this flexibility can come with certain challenges, especially in terms of planning for retirement, since you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off looking into other possibilities. In addition to achieving a financially stable retirement, seeking advice from a financial advisor in Cary, NC to set up your self-employed retirement plan offers significant tax advantages that allow your business to grow and succeed.
Few Cary, NC investment consulting 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 (check out our story here), and our firm have a rich history of assisting business owners in their retirement planning needs. We know that your business and retirement aspirations go far beyond just monetary concerns, and we are dedicated to offer tailored solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Cary, NC, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Cary, NC today.
Why Cary, NC 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 significant tax savings, working with a financial advisor in Cary, NC helps you create your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) provides the option to adjust how much you save:
- Customizable Contributions: Contribute more during high-income years and reduce savings when revenues are down, so that your plan aligns with your cash flow.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw your savings tax-free down the road—a smart decision if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, so you can keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to compound.
- State-Specific Incentives: Depending on where you live, you might access extra deductions as a sole proprietor. These local incentives can 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, further reducing 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 linked to the way you invest:
- Diversified Portfolios: Allocating your investments across a mix of asset classes like stocks and bonds is a smart way to minimize exposure to risk while continuing to build your savings.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net ensures you don’t tapping into your nest egg during tough times and risking extra costs.
Plan for the Future of Your Cary, NC Business
Retirement planning enables you to think through what’s next with your Cary, NC business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and are not part of the sale. These accounts offer the reliable income you’ll need later on. Keep in mind that while the sale of a business usually creates a capital gain, retirement plan contributions are restricted by contribution limits (e.g., a maximum of $7,000 for IRAs or up to $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you’ll owe when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement accounts provide a stable foundation through the transition. You can also seek advice from a financial advisor experienced in both succession and retirement strategies to help with taxes during the sale.
With the right retirement plan, you gain control over your financial future, lower your tax bill, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Cary, NC Now?
Time is one of the most important resources in retirement planning. Getting a head start not only allows you to build a larger nest egg but also reduces the pressure of playing catch-up as you get older. The following are reasons why it is beneficial to start now:
The Cost of Waiting
Waiting to start your retirement fund can have a significant impact on the total you’ll have when you retire. The primary reason is compound interest—the powerful process where your investments grow, and those returns, then, accumulate even more returns. The more time your money has to grow, the more significant the effect 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 waits until age 40 but contributes $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Small, consistent savings invested steadily often create impressive growth. Take a look at this scenario showing the effect of compound interest:
- Starting at age 25: By investing $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll end up with $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, just from a 10-year delay.
Saving early, the lower your annual savings needs each year to reach your retirement goals.
*These calculations 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 do not guarantee future performance. Outcomes may change due to elements like 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 Cary, NC, it might seem easier to prioritize reinvesting in your business rather than saving for retirement. Even so, starting a plan now enables you to:
- Take advantage of tax-free future growth or penalty-free withdrawals later on.
- Take advantage of adjustable savings that align with your earnings.
- Build a long-term safety measure that offers peace of mind, no matter how your business develops.
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 ability to turn your attention to your goals—both for your retirement years and your Cary, NC business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for those working for themselves in Cary, NC, each providing its own pros and cons. A financial advisor will guide you to learn about the advantages and disadvantages of each choice and determine the one most suitable for your unique situation. In most cases, your self-employed retirement plan options in Cary, NC include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that include key tax perks. In a conventional IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but retirement distributions are taxable. In contrast, Roth IRAs require contributions using income already taxed, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both cases, withdrawals come without penalties if you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are accessible for individuals with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA offers a way to save for retirement that permits entrepreneurs 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) cannot make additional contributions more than the 25% you (the employer) allocate. If you have employees, you must contribute the same amount for them as you do for yourself. You have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. This type of plan works well for businesses that experience cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs are free of costly startup or administrative fees.
SEPs operate like conventional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan meant for businesses without employees or when the sole employee is your spouse. Solo 401(k)s are similar to employer-sponsored 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This allows for more savings than SEPs or IRAs; however, the increased savings potential often come with more restricted investment choices. With this type of plan, 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 may establish and contribute to a solo 401(k).
Contribution Limits: For self-employed individuals with a solo 401(k) plan, you can make two types of contributions:
- Deferrals as an employee of up to 100% of your earned income from self-employment, up 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 individuals aged 60-63 in 2025.
- Employer profit-sharing contributions (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.
Total contributions are capped at $70,000, or $77,500 if you're over age 50 (in 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that delivers a set amount to entrepreneurs upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but enables participants to determine the precise amount they'll receive in retirement. This plan is best suited for wealthier self-employed individuals who want to save a substantial amount for retirement and can commit to making larger deposits. Contributions offer tax-deferred growth, and withdrawals incur taxes as income upon retirement.
Eligibility: Self-employed professionals running an owner-only business or with a small staff of under five may establish an individual defined benefit plan, but it's most commonly suggested for people above age 50 who earn at least $250,000 a year. Generally, good candidates for defined benefit plans include:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% and are willing to do more
- Businesses that have demonstrated consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution is calculated by an actuary using your earnings, age, and retirement objectives. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Cary, NC for Your Self-Employed Retirement Plan
Partnering with an advisor in Cary, NC experienced with retirement plans for the self-employed can be an important asset for self-employed individuals. They bring the skills needed to navigate the complexities of retirement planning and craft a customized plan that matches your objectives. A financial advisor in Cary, NC will evaluate your financial situation, identify your risk preferences, and help you in selecting the best options about saving and investing for retirement. Part of what we do for you includes:
- Help you choose a plan that suits your unique requirements
- Tailor the plan to your needs even further
- Create a written plan that complies with IRS regulations
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Monitor and adjust your plan as needed
- Deliver continuous support and financial insights to help you navigate your retirement journey
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Cary, NC: Correct Capital's Process
Cary, NC business owners who aren’t equipped with the time or understanding to manage their retirement savings strategy independently may end up overwhelmed by their options. With Correct Capital, our Cary, NC financial advisors handle the majority of your retirement planning for you, to help 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 four simple steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can determine if we're a good fit for you and your business. This initial call allows us to understand what you're looking for with zero commitment or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including how many employees you have (if any), your existing financial picture, and your future objectives. This helps us create a custom plan designed just for you.
- Review Your Plan: After we put together a plan using the information you provide, we'll sit down with you and review your plan step by step to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can begin contributing. As time goes on, we'll have regular meetings and review your strategy to ensure it stays suited to your needs.
Our Cary, NC financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are legally and ethically bound to do what's in your best interest.
Other financial advisory services we offer in Cary, NC 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 Cary, NC
Your business isn't "just a business" to you, and your Cary, NC financial advisors must deliver more than basic financial recommendations. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to create customized self-employed retirement plans. To every client in Cary, NC, we provide 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.
