Self-employed retirement plans Akron, OH. The flexibility of running your own company in Akron, OH is one of the best aspects of being self-employed. That said, this independence often comes with potential drawbacks, notably regarding planning for retirement, since you don't have access to 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 more secure retirement, seeking advice from a financial advisor in Akron, OH to create your self-employed retirement plan can provide significant tax advantages that help both you and your business to thrive.
Few Akron, OH financial advisory and retirement planning firms are as attuned to the requirements of entrepreneurs better than 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 our firm are deeply experienced in assisting business owners in their retirement planning needs. We know that your professional and personal aspirations extend well past simple financial figures, and we are dedicated to create customized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Akron, OH, or reach out to Correct Capital at 877-930-401k or contact us online to consult with 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 are essential for preparing you for the future, they also provide real benefits today. With customizable contribution options to significant tax savings, consulting a financial advisor in Akron, OH enables you to create your retirement plan to suit your individual circumstances.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) gives you the freedom to tailor how much you save:
- Customizable Contributions: Save extra during successful years and reduce savings when income is lower, so your plan works with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw without tax penalties in the future—a smart decision if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Plans designed for the self-employed deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, allowing you to keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to compound.
- State-Specific Incentives: Based on your location, you could qualify for additional deductions as a sole proprietor. These local incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax 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
Building a secure retirement isn’t only about how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Distributing your investments across different stocks, bonds, and alternatives serves to reduce risk while continuing to build your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net prevents you from using your retirement funds during tough times and facing tax penalties.
Plan for the Future of Your Akron, OH Business
Retirement planning can assist you prepare for what’s next with your Akron, OH business:
- Selling Your Business: If you’re planning to sell, plans like SEP IRAs or Solo 401(k)s remain your personal assets and don’t transfer with the business. These accounts ensure 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, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you are required to pay when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings offer financial security through the transition. You may also partner with a financial advisor with expertise in succession and retirement planning to help with taxes during the sale.
With the best-fit retirement strategy, 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 Akron, OH Now?
Time remains one of the most important assets in retirement planning. Starting early not only lets you accumulate a larger nest egg but also reduces the financial burden 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 may cause a substantial impact on the total you’ll have when you stop working. The main reason is compound interest—the powerful process where your investments earn returns, and those returns, subsequently, earn even more returns. The longer your money has to grow, the greater the impact of this growth.
Example: Alex and Taylor are both self-employed individuals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but saves $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and accumulates $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time often create significant growth. Take a look at this scenario showing the effect of compounding:
- Starting at age 25: Putting aside $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, simply due to a 10-year delay.
Starting sooner, the less you need to save each year to meet your retirement goals.
*These calculations represent estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is for illustrative purposes only and are not a promise of future results. Actual results may vary due to factors such as market conditions, fees, and personal factors. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Akron, OH, it might seem easier to put more emphasis on reinvesting in your business instead of saving for retirement. Even so, starting a plan now gives you the chance to:
- Leverage growth that is tax-deferred or penalty-free withdrawals down the road.
- Enjoy adjustable savings that change with your earnings.
- Build a safety net that ensures stability, no matter how your business changes.
Getting started now, the less you’ll need to worry about making up for lost time later in life. Building your retirement savings today means gaining control over your financial future and allowing yourself the opportunity to focus on your goals—both for your future retirement and your Akron, OH business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for entrepreneurs in Akron, OH, each with its own pros and cons. A financial advisor is available to help you understand the advantages and disadvantages of each option and choose the one most suitable for your unique situation. Typically, your self-employed retirement plan options in Akron, OH include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that provide key tax perks. In a standard IRA, the money you contribute is often tax-deductible, and earnings grow without immediate taxation, but retirement distributions are taxed as income. In contrast, Roth IRA contributions from post-tax earnings, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, both traditional and Roth IRAs are available to anyone 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: SEP IRAs is a retirement plan that allows entrepreneurs to contribute a percentage of their net earnings. Contributions are strictly employer contributions 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, 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. SEP IRAs works well for companies with fluctuating revenue streams. Unlike other plans, SEP IRAs don’t have costly startup or administrative fees.
SEPs function like standard IRAs, where the contributions are tax-deferred 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 are the lesser of:
- 25% of compensation, or
- $70,000 for 2025
For self-employed individuals, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, 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. These plans function similarly to employer-sponsored 401(k) plans, and let you make contributions as both the employer and the 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. 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:
- Deferrals as an employee of up to 100% of your self-employment income, up to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your net earnings from self-employment, which is calculated as net profits less half of your self-employment tax and the elective deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 if you're over age 50 (as of 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans represents a type of retirement plan that delivers a pre-established payout to business owners upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but lets individuals clearly understand exactly how much they'll have in retirement. This option is ideal for high-earning entrepreneurs who are focused on saving a substantial amount for retirement and are willing to make larger deposits. Contributions are tax deferred, and withdrawals are taxable as income upon retirement.
Eligibility: Self-employed professionals managing a one-person company or with a small staff of under five are eligible to open an individual defined benefit plan, but it's generally advised for individuals aged 50+ who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans are:
- Business owners or partners who want to invest more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% with plans to contribute more
- Businesses that have demonstrated consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The cap on contributions must be determined by an actuary using your income, age, and retirement goals. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Akron, OH for Your Self-Employed Retirement Plan
Working with a financial advisor in Akron, OH experienced with retirement plans for the self-employed can be an invaluable resource for those working for themselves. They have the expertise to help guide you through the challenges of retirement planning and craft a tailored strategy that aligns with your goals. A financial advisor in Akron, OH will evaluate your financial situation, identify your risk preferences, and help you in making informed decisions about saving and investing for retirement. Included in what we do for you includes:
- Guide you in choosing a plan that suits your unique requirements
- Further adapt the plan to your specific situation 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
- Review and modify your plan when necessary
- Provide ongoing education and advice as you continue on the road to retirement
- Boost your retirement earnings by making the most of your social security
Self-Employed Retirement Plans in Akron, OH: Correct Capital's Process
Entrepreneurs in Akron, OH who don’t have the time or expertise to oversee their self-employed retirement plan themselves often feel overwhelmed as they look at their options. At Correct Capital, our Akron, OH financial advisors handle the majority of your retirement planning for you, to help make meeting your future savings targets as straightforward as possible for you. We are here to assist you in setting up your self-employed retirement plan in a quick, four-step process:
- 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 learn about your needs with zero commitment or extensive time commitment on your part.
- Gather Information: Should we agree to proceed, we'll gather information, including how many employees you have (if any), your current financial situation, and your future objectives. This helps us create a custom plan that aligns with your goals.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll sit down with you and discuss your plan step by step to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll put everything in place so you can start saving. Throughout our relationship, we'll have regular meetings and track your progress to ensure it stays suited to your needs.
Our Akron, OH financial advisors and retirement plan consultants are fiduciary advisors, which means they are required by law and ethical standards to prioritize your needs above all else.
Other financial advisory services we offer in Akron, OH include:
- Financial Planning for Business Owners
- Comprehensive Financial Planning
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
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 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 Akron, OH, 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, contact Correct Capital now at 877-930-401k or contact us online.
