Self-employed retirement plans Akron, OH. The independence of running your own company in Akron, OH is one of the best aspects of having a self-directed career. Even so, this freedom can come with certain challenges, particularly in terms of planning for retirement, as you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off looking into other possibilities. In addition to having a more secure retirement, working with a financial advisor in Akron, OH to establish your self-employed retirement plan delivers significant tax advantages that help your business to grow and succeed.
Few Akron, OH financial advisory and retirement planning firms understand the needs of entrepreneurs quite like Correct Capital. Our founder's father was a small business owner himself (learn more about our story here), and our firm are deeply experienced in assisting business owners in their retirement planning needs. We recognize that your business and retirement aspirations go far beyond basic numbers, and we strive to offer tailored solutions aligned with your vision. 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.
Why Akron, OH Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also provide immediate benefits today. Offering flexibility in contributions to considerable tax savings, consulting a financial advisor in Akron, OH allows you to create your retirement plan to align with your individual circumstances.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) provides the flexibility to tailor how much you save:
- Customizable Contributions: Contribute more during successful years and scale back when revenues are down, so that your plan works with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw without tax penalties in the future—a smart decision if you expect your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, allowing you to keep more of your earnings.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to grow.
- State-Specific Incentives: Based on your location, you might access extra credits as a business owner. These regional incentives help make these plans even more valuable.
- 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 put into a retirement plan, helping to lower 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 varied stocks, bonds, and alternatives can help reduce risk while continuing to build your savings.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business ensures you don’t tapping into your nest egg during tough times and risking extra costs.
Plan for the Future of Your Akron, OH Business
Preparing for retirement also helps you prepare 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 your personal assets and don’t transfer with the business. These plans offer the steady income you’ll need later on. It’s important to note that while selling your business results in a capital gain, deposits into these plans are restricted by contribution limits (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you’ll owe when you transfer your business.
- Succession Planning: If you’re passing the business on, your retirement savings offer the funds you need as you make this shift. 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 solid base 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 valuable resources when it comes to saving for retirement. Starting early not only allows you to build a more substantial retirement fund but also reduces 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 substantial impact on the amount you’ll have when you retire. The primary reason is compound interest—the powerful process where your investments generate earnings, and those returns, in turn, generate even more returns. The greater time span your money has to grow, the more significant the benefit of this compounding process.
Example: Two individuals, Alex and Taylor are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but saves $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex invests $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time may result in substantial growth. Take a look at this scenario showing the effect of compounding:
- Starting at age 25: If you invest $200 per month in a retirement plan with an projected return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month would result in only $235,412.97* by age 65—a shortfall of over $260,000, simply due to a 10-year delay.
The earlier you begin, 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. Annual deposits were multiplied by the number of years to estimate total contributions. The scenarios provided are intended as illustrative examples and cannot predict actual future outcomes. Your individual results may differ due to variables including market conditions, fees, and your unique situation. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Akron, OH, it is often the case that you put more emphasis on reinvesting in your business over saving for retirement. Even so, beginning a plan now gives you the chance to:
- Leverage tax-free future growth or penalty-free withdrawals down the road.
- Take advantage of adjustable savings that change with your income.
- Establish a safety net that provides security, no matter how your business changes.
Starting early, the less you’ll have to worry about making up for lost time later in life. Saving for retirement now means gaining control over your financial future and allowing yourself the opportunity to concentrate on your goals—both for your future retirement and your Akron, OH business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for entrepreneurs in Akron, OH, each with its own advantages and considerations. A financial advisor can help you evaluate the pros and cons of each option and identify the one ideal for your circumstances. In most cases, your self-employed retirement plan options in Akron, OH include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that provide key tax perks. In a conventional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but withdrawals in retirement are subject to income tax. In contrast, Roth IRA contributions using income already taxed, but qualified withdrawals in retirement, including earnings, are tax-free. In both accounts, withdrawals don’t incur penalties provided you are at least 59½.
Eligibility: Unlike plans linked to your job, both 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: 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 are strictly employer contributions an employer, so, as a sole proprietor, you (the employee) are limited to contributions from the employer role more than 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. You have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. This type of plan may be ideal for companies with cycles of high revenue and low revenue. Unlike other plans, SEP IRAs lack costly startup or administrative fees.
SEPs work like traditional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
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
For self-employed individuals, the contribution you can make 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 retirement savings plan meant for businesses without employees or when the sole employee is your spouse. This type of plan operate much like employer-sponsored 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This provides more savings than SEPs or IRAs; however, the increased savings potential can be balanced by more restricted investment choices. With this type of 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: For self-employed individuals with a solo 401(k) plan, you have the ability to make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employed earnings, 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 if you attain age 60-63 in 2025.
- Contributions as an employer (as an employer) cannot exceed 25% of your net earnings from self-employment, 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 (for 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 provides a fixed, predetermined benefit to business owners upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but lets individuals clearly understand exactly how much they'll have in retirement. This plan is recommended for high-earning professionals who are focused on saving a significant sum for retirement and are willing to make larger deposits. Contributions are tax deferred, and withdrawals are taxed as income upon retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees can open an individual defined benefit plan, but it's most commonly suggested for individuals aged 50+ who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans are:
- Partners or owners who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Organizations that already put in 3-4% but are open to increasing contributions
- Organizations with proven consistent profit patterns
- Entrepreneurs 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 determined by your financial situation, age, and savings targets. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Akron, OH for Your Self-Employed Retirement Plan
Working with a financial advisor in Akron, OH specialized in self-employed retirement plans is an important asset for self-employed individuals. They bring the skills needed to guide you through the challenges of retirement planning and develop a tailored strategy that reflects your aspirations. Your advisor in Akron, OH will review your finances, determine how much risk you’re comfortable with, and guide you in selecting the best options about saving and investing for retirement. Part of what we do for you includes:
- Assist in selecting a plan that best fits your needs and goals
- Tailor the plan to your specific situation even further
- Adopt a written plan that complies with IRS regulations
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Review and modify your plan to keep it aligned with your goals
- Deliver continuous support and financial insights to help you navigate your retirement journey
- Boost your retirement earnings by optimizing your social security benefits
Self-Employed Retirement Plans in Akron, OH: Correct Capital's Process
Entrepreneurs in Akron, OH who don’t have the time or expertise to handle their self-employed retirement plan independently may end up overwhelmed as they look at their options. With Correct Capital, our Akron, OH financial advisors handle the majority of your savings plan setup for you, and strive to ensure meeting your financial objectives as straightforward 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: It only takes 20 minutes, a member of our advisor team can help understand if we're a good fit for you and your business. This brief introduction lets us learn about your needs with no obligation or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including your employee count, your present financial standing, and your future objectives. This helps us create a custom plan 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 discuss your plan thoroughly to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can initiate your savings journey. Over the course of our partnership, we'll check in and track your progress to keep it tailored to your evolving circumstances.
Our Akron, OH financial advisors and retirement plan consultants serve as fiduciary advisors, meaning they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Akron, OH 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 Akron, OH
To you, your business is more than "just a business", and your Akron, OH financial advisors need to offer more than simply sound financial advice. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to provide personalized self-employed retirement plans. All our clients in Akron, OH benefit from our I.O.U. promise: everything we recommend 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.
