Self-employed retirement plans Akron, OH. The flexibility of being your own boss in Akron, OH is one of the best aspects of having a self-directed career. Even so, this freedom can come with potential drawbacks, notably in terms of retirement savings, as you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from understanding their retirement options. In addition to achieving a more secure retirement, partnering with a financial advisor in Akron, OH to create your self-employed retirement plan delivers significant tax advantages that allow your business to grow and succeed.
Few Akron, OH investment consulting and retirement planning firms truly grasp the challenges faced by small business owners quite like Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (check out our story here), and Correct Capital are deeply experienced in supporting entrepreneurs with their retirement planning needs. We understand that your business and retirement aspirations go far beyond just monetary concerns, and we are dedicated to provide customized solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Akron, OH, 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 Akron, OH today.
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Why Akron, OH 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 immediate benefits today. With customizable contribution options to significant tax savings, working with a financial advisor in Akron, OH helps you customize your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to modify how much you save:
- Customizable Contributions: Save extra during successful years and reduce savings when your earnings dip, ensuring your plan works with your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw your savings tax-free down the road—an advantageous choice if you expect your tax rate will increase in the future.
Save Money on Taxes
Retirement plans for self-employed individuals deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, which gives your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you may be eligible for additional tax breaks as a business owner. These state-level incentives make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax credit of up to 50% of the first $2,000 they contribute 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 about how you invest:
- Diversified Portfolios: Spreading your investments across different stocks, bonds, and other assets is a smart way to minimize exposure to risk while helping to grow your savings.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business ensures you don’t dipping into savings during tough times and facing tax penalties.
Plan for the Future of Your Akron, OH Business
Preparing for retirement also helps you plan ahead for what’s next with your Akron, OH business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s remain yours and won’t be included in the sale. These accounts can provide the financial stability you’ll need later on. Keep in mind that while selling a business often leads to a capital gain, deposits into these plans are capped at annual limits (e.g., as much as $7,000 for IRAs or up to $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Using retirement contributions wisely helps lower the taxes you might face when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts ensure financial security during the change. You might want to seek advice from a financial advisor experienced in both succession and retirement strategies to minimize tax burdens on the sale.
With the proper savings strategy, you can take control of your financial future, cut down your tax obligations, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Akron, OH Now?
Time remains one of the most important resources when it comes to saving for retirement. Getting a head start not only helps you grow a larger nest egg but also lowers the pressure of saving aggressively in the future. Here’s why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement may cause a major impact on the amount you’ll have when you stop working. The biggest reason is compound interest—the financial principle where your investments generate earnings, and those returns, subsequently, generate even more returns. The longer your money has to grow, the larger the benefit of this growth.
Example: Alex and Taylor are both self-employed professionals. 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 saves $7,500 annually to bridge the gap.
By age 65, with an assumption of 7% annual return:
- Alex invests $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
Small, consistent savings contributed over time can lead to substantial growth. Take a look at this scenario showing the impact of compound interest:
- 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 gap of over $260,000, just from a 10-year delay.
The earlier you begin, the less effort required each year to meet your retirement goals.
*These calculations represent estimates calculated using NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. These examples are meant to provide general guidance and cannot predict actual future outcomes. Actual results may vary depending on factors such as market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Akron, OH, it might seem easier to focus more on reinvesting in your business instead of saving for retirement. Even so, starting a plan now gives you the chance to:
- Benefit from tax-free future growth or withdrawals without taxes in the future.
- Take advantage of flexible contributions that align with your cash flow.
- Build a financial cushion that provides security, no matter how your business evolves.
Getting started now, the less you’ll need 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 turn your attention to your dreams—both for your golden years and your Akron, OH business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for those working for themselves in Akron, OH, each providing its own pros and cons. A financial advisor will guide you to understand the benefits and drawbacks of each plan and identify the one best suited for your circumstances. In most cases, your self-employed retirement plan options in Akron, OH consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include distinct tax benefits. In a traditional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are taxable. In contrast, with Roth IRAs, you contribute using income already taxed, but eligible distributions during 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, IRAs, including traditional and Roth options are open to those with an earned 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 offers a way to save for retirement that enables self-employed individuals to save a percentage of their net business profits. Contributions are strictly employer contributions an employer, so, as a sole proprietor, you (the employee) would not be able to contribute more than 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 set monetary value or a percentage of wages to employee accounts. SEP IRAs is a good option for entrepreneurs facing periods of inconsistent earnings. Unlike other plans, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs work like standard IRAs, where contributions are made with pre-tax money and money withdrawn is subject to income tax.
Eligibility: Employers of any type, including self-employed individuals can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 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: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed meant for companies that have no employees or where the only employee is a spouse. These plans are similar to employer-sponsored 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This offers more savings than SEPs or IRAs; however, the increased savings potential can be balanced by more restricted investment choices. Using a solo 401(k), you can make either traditional or Roth deferrals, which share 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: 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 self-employed earnings, 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 if you attain age 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) are limited to 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
Total contributions are capped at $70,000, or $77,500 for individuals aged 50+ (in 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan represents a type of retirement plan that delivers a set amount to self-employed individuals upon retirement. In contrast to the plans discussed earlier, a defined benefit plan doesn't fluctuate based on investment returns, but lets individuals clearly understand the precise amount they'll have in retirement. This option is recommended for high-earning entrepreneurs who aim to accumulate a significant sum for retirement and can commit to making substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income upon retirement.
Eligibility: Any self-employed individual operating a solo business or employing fewer than five people may establish an individual defined benefit plan, but it's typically advised for people above age 50 who make $250,000 or more annually. Generally, good candidates for defined benefit plans are:
- Business owners or partners who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% with plans to contribute more
- Companies showing consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The contribution limit requires calculation from an actuary determined by your income, age, and retirement goals. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Akron, OH for Your Self-Employed Retirement Plan
Partnering with an advisor in Akron, OH focused on self-employed retirement strategies is an important asset for those working for themselves. They bring the skills needed to guide you through the challenges of retirement planning and develop a customized plan that matches your objectives. An expert in your area will assess where you stand financially, understand your risk tolerance, and help you in making informed decisions about saving and investing for retirement. Included in what we do for you features:
- Help you choose a plan that suits your unique requirements
- Customize 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 when necessary
- Offer continued financial education and guidance throughout your retirement planning process
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Akron, OH: Correct Capital's Process
Entrepreneurs in Akron, OH who aren’t equipped with the time or understanding to manage their retirement savings strategy on their own may end up overwhelmed when faced with their options. With Correct Capital, our Akron, OH financial advisors manage the lion's share of your savings plan setup for you, working to make meeting your retirement goals as hassle-free as possible for you. We are here to assist you in setting up your self-employed retirement plan in just four steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can determine if our services align for you and your business. This initial call helps us get a sense of your goals with no pressure or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll request information, including how many employees you have (if any), your present financial standing, and your future objectives. This allows us to put together a tailored approach that aligns with your goals.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll sit down with you and discuss 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 begin contributing. Throughout our relationship, we'll meet with you and monitor your plan to keep it tailored to your evolving circumstances.
Our Akron, OH financial advisors and retirement plan consultants serve as fiduciary advisors, who are obligated to they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Akron, OH include:
- 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 Akron, OH
To you, your business is more than "just a business", and your Akron, OH financial advisors must deliver more than simply sound financial advice. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to provide tailored self-employed retirement plans. All our clients in Akron, OH benefit from our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
