Self-employed retirement plans Anaheim, CA. The freedom of running your own company in Anaheim, CA is one of the best aspects of having a self-directed career. Even so, this freedom can come with certain challenges, particularly when it comes to planning for retirement, because you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off understanding their retirement options. In addition to achieving a more secure retirement, working with a financial advisor in Anaheim, CA to establish your self-employed retirement plan offers significant tax advantages that allow you to move your business forward.
Few Anaheim, CA wealth management and retirement planning firms understand the needs of entrepreneurs 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 we have a rich history of helping businesses with their retirement planning needs. We recognize that your goals for your business and retirement extend well past just monetary concerns, and we strive to provide tailored solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Anaheim, CA, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Anaheim, CA today.
Why Anaheim, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver tangible benefits today. Offering flexibility in contributions to significant tax savings, partnering with a financial advisor in Anaheim, CA helps you customize your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) offers the freedom to adjust how much you save:
- Customizable Contributions: Set aside more during successful years and cut back when your earnings dip, so your plan fits your current income.
- Roth Options: 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 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 SIMPLE IRA shrink your tax liability, helping you keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, providing your money more time to compound.
- State-Specific Incentives: In some states, you could qualify for extra deductions as a self-employed individual. These local incentives make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax 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 goes beyond just how much you save—it’s also about how you invest:
- Diversified Portfolios: Allocating your investments across different asset classes like stocks and bonds serves to mitigate financial risk while continuing to build your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund helps you avoid using your retirement funds during financial hardships and incurring penalties.
Plan for the Future of Your Anaheim, CA Business
Preparing for retirement enables you to prepare for what’s next with your Anaheim, CA business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s stay in your name and are not part of the sale. These plans ensure the financial stability you’ll need during retirement. Remember that while selling a business often leads to a capital gain, contributions to retirement accounts are restricted by contribution limits (e.g., up to $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you are required to pay when you sell your business.
- Succession Planning: If you’re passing the business on, your nest egg ensure the funds you need through the transition. You might want to partner with a financial advisor who specializes in succession planning and retirement accounts to help with taxes on the sale.
With the best-fit retirement strategy, you manage your financial future, reduce your tax burden, and build a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Anaheim, CA Now?
Time remains one of the most valuable factors in retirement planning. Starting early not only allows you to build a more substantial retirement fund but also lowers the financial burden of saving aggressively in the future. Here’s why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement could lead to a significant impact on the savings you’ll have when you reach retirement age. The biggest reason is compound interest—the concept where your investments grow, and those returns, then, generate even more returns. The greater time span your money has to grow, the greater the impact of compounding.
Example: Two individuals, Alex and Taylor are both entrepreneurs. Their shared goal is to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor waits until age 40 but puts away $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex invests $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions made consistently often create significant growth. Here’s a simple 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: Saving the same $200 per month yields only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
Starting sooner, the less you need to save each year to achieve your retirement goals.
*The figures provided in this example are based on estimates calculated using 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 cannot predict actual future outcomes. Outcomes may change due to factors such as market conditions, fees, and your unique situation. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Anaheim, CA, it is often the case that you put more emphasis on reinvesting in your business over saving for retirement. However, beginning a plan now gives you the chance to:
- Take advantage of growth that is tax-deferred or tax-free withdrawals in the future.
- Enjoy adjustable savings that align with your earnings.
- Establish a financial cushion that provides security, 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 gaining control over your financial future and allowing yourself the ability to turn your attention to your goals—both for your future retirement and your Anaheim, CA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for self-employed individuals in Anaheim, CA, each offering its own advantages and considerations. A financial advisor is available to help you understand the pros and cons of each choice and determine the one ideal for your unique situation. In most cases, your self-employed retirement plan options in Anaheim, CA include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that include distinct tax benefits. In a conventional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but retirement distributions are taxable. In contrast, with Roth IRAs, you contribute using income already taxed, but retirement withdrawals that qualify, including earnings, are not taxed. In both cases, withdrawals don’t incur penalties if you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, IRAs, including traditional and Roth options are accessible for individuals 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 serves as a retirement savings option that enables entrepreneurs to save a percentage of their net business profits. Contributions must come from 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) 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 businesses that experience fluctuating revenue streams. Unlike other plans, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs function like conventional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are capped at the lower of:
- 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: The Solo 401(k), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan designed for businesses without employees or when the sole employee is your spouse. These plans are similar to employer-sponsored 401(k) plans, and allow you to contribute as both the employer and the employee with pre-tax money. This provides more savings than SEPs or IRAs; however, the increased savings potential may be offset by more restricted investment choices. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which offer the same tax benefits as their IRA contribution counterparts.
Eligibility: Only business owners and their spouses can set up 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 earned income from self-employment, 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 for those who turn 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your net self-employment income, 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 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan offers a structured retirement solution that guarantees a set amount to self-employed individuals upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but enables participants to determine the precise amount they'll get in retirement. This option is recommended for high-earning entrepreneurs who are focused on saving a significant sum for retirement and are willing to make larger deposits. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income in retirement.
Eligibility: Entrepreneurs running an owner-only business or with less than five employees are eligible to open an individual defined benefit plan, but it's most commonly advised for those over 50 who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans tend to be:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% but are open to increasing contributions
- Companies that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution requires calculation from an actuary based on your financial situation, age, and savings targets. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Anaheim, CA for Your Self-Employed Retirement Plan
Working with a financial advisor in Anaheim, CA experienced with retirement plans for the self-employed can be an important asset for entrepreneurs. They have the expertise to help guide you through the challenges of retirement planning and design a customized plan that aligns with your goals. Your advisor in Anaheim, CA will evaluate your financial situation, determine how much risk you’re comfortable with, and assist you in choosing wisely about saving and investing for retirement. Part of what we do for you involves:
- Help you choose a plan that suits your unique requirements
- Customize the plan to fit you personally even further
- Adopt a written plan as required by IRS rules
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Monitor and adjust your plan as needed
- Provide ongoing education and advice to help you navigate your retirement journey
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Anaheim, CA: Correct Capital's Process
Self-employed individuals in Anaheim, CA who don’t have the time or expertise to oversee their self-employed retirement plan themselves can become overwhelmed by their options. Through our team at Correct Capital, our Anaheim, CA financial advisors handle the bulk of your retirement planning for you, working to make meeting your retirement goals as easy as possible for you. We can help you get set 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 we're a good fit for you and your business. This initial call allows us to understand what you're looking for with no obligation or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including how many employees you have (if any), your present financial standing, and your long-term savings targets. This enables us to craft a personalized strategy designed just for you.
- Review Your Plan: When we finalize a plan using the information you provide, we'll schedule a meeting and go over your plan step by step to ensure you understand it 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 initiate your savings journey. As time goes on, we'll have regular meetings and monitor your plan to keep it tailored to your evolving circumstances.
Our Anaheim, CA financial advisors and retirement plan consultants serve 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 Anaheim, CA include:
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Roth Conversion
- 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 Anaheim, CA
You don't see your business as "just a business", and your Anaheim, CA financial advisors must deliver more than simply sound financial advice. With Correct Capital, we take the time to get to know our clients and their businesses to create personalized self-employed retirement plans. To every client in Anaheim, CA, we provide our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To begin on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
