Self-employed retirement plans Anaheim, CA. The flexibility of owning your own business in Anaheim, CA offers many benefits of having a self-directed career. That said, this independence can come with potential drawbacks, particularly regarding planning for retirement, as you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider exploring their options. In addition to achieving a more comfortable retirement, partnering with a financial advisor in Anaheim, CA to set up your self-employed retirement plan delivers significant tax advantages that allow your business to grow and succeed.
Few Anaheim, CA financial advisory and retirement planning firms truly grasp the challenges faced by small business owners 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 take pride in helping businesses with their retirement planning needs. We recognize that your business and retirement aspirations go far beyond just monetary concerns, and we strive to create customized solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Anaheim, CA, or give us a call at 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 provide immediate benefits today. With customizable contribution options to significant tax savings, partnering with a financial advisor in Anaheim, CA allows you to customize your retirement plan to align with your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) provides the flexibility to tailor how much you save:
- Customizable Contributions: Set aside more during high-income years and scale back when income is lower, so your plan fits your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw tax-free later—an advantageous choice if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to grow.
- State-Specific Incentives: Depending on where you live, you could qualify for state-specific credits as a business owner. These regional incentives help make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a credit of up to 50% of the first $2,000 contributed 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 linked to the way you invest:
- Diversified Portfolios: Distributing your investments across a mix of asset classes like stocks and bonds can help mitigate financial risk while still growing your savings.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund helps you avoid using your retirement funds during financial hardships and facing tax penalties.
Plan for the Future of Your Anaheim, CA Business
Preparing for retirement can assist you plan ahead 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 don’t transfer with the business. These accounts ensure the steady income you’ll need during retirement. Remember that while selling your business results in a capital gain, retirement plan contributions are capped at annual limits (e.g., as much as $7,000 for IRAs or as much as $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’ll owe when you transfer your business.
- Succession Planning: For those winding down or handing over their business, your retirement savings provide a stable foundation during the change. You can also seek advice from a financial advisor with expertise in succession and retirement planning to help with taxes associated with the transaction.
With the best-fit retirement strategy, you manage your financial future, reduce your tax burden, and create 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 crucial assets for building your retirement fund. Starting early not only lets you accumulate a larger nest egg but also minimizes the stress of playing catch-up as you get older. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings can have a significant impact on the total you’ll have when you stop working. The primary reason is compound interest—the powerful process where your investments grow, and those returns, in turn, earn even more returns. The more time your money has to grow, the greater the effect of compounding.
Example: Alex and Taylor are both self-employed professionals. They each aim 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 make up for lost time.
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 achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time may result in significant growth. Consider this example showing the impact of compounding:
- Starting at age 25: By investing $200 per month in a retirement plan with an projected return of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month would result in only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
The earlier you begin, the less you need to save each year to reach your retirement goals.
*The figures provided in this example are based on estimates generated with 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 intended as illustrative examples and cannot predict actual future outcomes. Your individual results may differ due to factors such as market conditions, fees, and your unique situation. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Anaheim, CA, it can be tempting to focus more on reinvesting in your business rather than saving for retirement. Even so, beginning a plan now gives you the chance to:
- Benefit from tax-free future growth or withdrawals without taxes in the future.
- Benefit from flexible contributions that change with your earnings.
- Establish a financial cushion that offers peace of mind, no matter how your business develops.
The sooner you start, the less you’ll need to worry about making up for lost time later in life. Building your retirement savings today means taking control of your financial future and creating for yourself the opportunity to concentrate on your objectives—both for your future retirement and your Anaheim, CA business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for those working for themselves in Anaheim, CA, each offering its own benefits and trade-offs. A financial advisor will guide you to understand the advantages and disadvantages of each option and determine the one most suitable for your unique situation. Typically, your self-employed retirement plan options in Anaheim, CA are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that provide key tax perks. In a standard IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but money taken out during retirement are taxable. In contrast, Roth IRAs require contributions using income already taxed, but retirement withdrawals that qualify, including earnings, are tax-free. In both types of accounts, withdrawals don’t incur penalties provided 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 available to anyone with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs serves as a retirement savings option that permits those who are self-employed 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 beyond 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 works well for entrepreneurs facing fluctuating revenue streams. In contrast to some alternatives, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs work like traditional 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 set up 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
As a self-employed person, the contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan meant for businesses with no employees or when the sole employee is your spouse. Solo 401(k)s operate much like standard 401(k) plans, and enable contributions as both an employee or an employer with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the additional opportunities can be balanced by more constrained investment avenues. 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: Only 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 have the ability to 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.
- Contributions as an employer (as an employer) are limited to 25% of your net earnings from self-employment, which is your net profit minus half of your self-employment tax and the elective deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 if you're over age 50 (as of 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that provides a fixed, predetermined benefit to business owners 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 receive in retirement. This option is best suited for higher-income entrepreneurs who aim to accumulate a significant sum for retirement and are willing to make sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income during retirement.
Eligibility: Self-employed professionals operating a solo business or with a small staff of under five are eligible to open an individual defined benefit plan, but it's typically advised for individuals aged 50+ who make $250,000 or more annually. In most cases, good candidates for defined benefit plans tend to be:
- 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 showing consistent profit patterns
- Entrepreneurs over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The contribution limit must be determined by an actuary using your financial situation, age, and savings targets. Limits on contributions change annually.
The Importance of a Financial Advisor in Anaheim, CA for Your Self-Employed Retirement Plan
Working with a financial advisor in Anaheim, CA focused on self-employed retirement strategies can be an essential partner for those working for themselves. They offer the knowledge to assist guide you through the challenges of retirement planning and craft a personalized approach that aligns with your goals. A financial advisor in Anaheim, CA will assess where you stand financially, identify your risk preferences, and help you in selecting the best options about saving and investing for retirement. A key part of what we do for you involves:
- Assist in selecting a plan that suits your unique requirements
- Tailor the plan to your needs even further
- Adopt a written plan as required by IRS rules
- Organize a trust plan to manage your assets
- Help you understand the plan's terms
- Track and fine-tune your plan as needed
- Provide ongoing education and advice throughout your retirement planning process
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Anaheim, CA: Correct Capital's Process
Entrepreneurs in Anaheim, CA who don’t have the time or expertise to oversee their retirement savings strategy themselves often feel overwhelmed when faced with their available plans. Through our team at Correct Capital, our Anaheim, CA financial advisors take on the majority of your retirement strategy for you, working to make meeting your retirement goals as hassle-free as possible for you. We can help you get set up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if we're suited to your needs for you and your business. This short conversation allows us to get a sense of your goals with no obligation or significant effort 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 existing financial picture, and your retirement goals. This allows us to put together a personalized strategy suited specifically for your needs.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll meet with you and review your plan thoroughly to help you fully grasp it and show how it aligns with your goals.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can begin contributing. Over the course of our partnership, we'll have regular meetings and track your progress to keep it tailored to your evolving circumstances.
Our Anaheim, CA financial advisors and retirement plan consultants are fiduciary advisors, which means they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Anaheim, CA 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 Anaheim, CA
To you, your business is more than "just a business", and your Anaheim, CA financial advisors must deliver more than just good financial guidance. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to provide personalized self-employed retirement plans. We offer all our Anaheim, CA clients 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, call Correct Capital today at 877-930-401k or contact us online.
