Self-employed retirement plans Anchorage, AK. The flexibility of owning your own business in Anchorage, AK is one of the greatest advantages of having a self-directed career. However, this flexibility sometimes brings with potential drawbacks, notably when it comes to planning for retirement, because you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from exploring their options. In addition to enjoying a more secure retirement, seeking advice from a financial advisor in Anchorage, AK to establish your self-employed retirement plan can provide significant tax advantages that enable you to move your business forward.
Few Anchorage, AK investment consulting and retirement planning firms are as attuned to the requirements of small business owners better than Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (learn more about our story here), and Correct Capital have a rich history of assisting business owners in their retirement planning needs. We understand that your goals for your business and retirement go far beyond just monetary concerns, and we strive to create customized solutions that reflect your objectives. Continue exploring to find out about your self-employed retirement plan options in Anchorage, AK, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Anchorage, AK today.
Why Anchorage, AK Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also offer tangible benefits today. Offering flexibility in contributions to significant tax savings, consulting a financial advisor in Anchorage, AK enables you to customize your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income from year to year, a plan like a SEP IRA or Solo 401(k) provides the option to tailor how much you save:
- Customizable Contributions: Contribute more during high-income years and reduce savings when your earnings dip, so that your plan works with your current income.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw tax-free later—a smart decision if you expect your tax rate is likely to rise 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, so you can 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: In some states, you might access additional credits as a business owner. These regional incentives can 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 they contribute a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Spreading your investments across different stocks, bonds, and alternatives can help minimize exposure to risk while continuing to build your savings.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business prevents you from tapping into your nest egg during financial hardships and incurring penalties.
Plan for the Future of Your Anchorage, AK Business
Preparing for retirement can assist you plan ahead for what’s next with your Anchorage, AK business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and are not part of the sale. These plans offer the steady income you’ll need during retirement. Keep in mind that while selling a business often leads to a capital gain, deposits into these plans are subject to yearly maximums (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: Making the most of retirement savings minimizes the taxes you might face when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts provide financial security as you make this shift. You may also work with a financial advisor with expertise in succession and retirement planning to reduce taxes associated with the transaction.
With the best-fit retirement strategy, you can take control of your financial future, lower your tax bill, and build a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Anchorage, AK Now?
Time is one of the most important factors when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a bigger financial cushion but also lowers the financial burden of catching up later in life. This is why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement may cause a substantial impact on the total you’ll have when you reach retirement age. The primary reason is compound interest—the financial principle where your investments earn returns, and those returns, subsequently, generate even more returns. The more time your money has to grow, the greater the effect of compounding.
Example: Taylor and Alex are both entrepreneurs. Their shared goal is to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor delays savings until age 40 but contributes $7,500 annually to bridge the gap.
By age 65, with an assumption of 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions invested steadily may result in substantial growth. Consider this example showing the power of consistent growth:
- Starting at age 25: If you invest $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month yields only $235,412.97* by age 65—a difference of over $260,000, all because of a 10-year delay.
Saving early, the less you need to save each year to achieve your retirement goals.
*These calculations are based on estimates derived from NerdWallet’s Compound Interest Calculator, based on 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 for illustrative purposes only and are not a promise of future results. Your individual results may differ depending on elements like market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Anchorage, AK, it might seem easier to prioritize reinvesting in your business rather than saving for retirement. However, starting a plan now allows you to:
- Take advantage of growth that is tax-deferred or withdrawals without taxes in the future.
- Enjoy flexible contributions that change with your cash flow.
- Build a financial cushion that ensures stability, no matter how your business evolves.
Getting started now, the less you’ll have to worry about playing catch-up later in life. Saving for retirement now means gaining control over your financial future and giving yourself the ability to turn your attention to your objectives—both for your retirement years and your Anchorage, AK business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for entrepreneurs in Anchorage, AK, each with its own benefits and trade-offs. A financial advisor can help you evaluate the advantages and disadvantages of each choice and determine the one most suitable for your circumstances. Generally speaking, your self-employed retirement plan options in Anchorage, AK include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include specific tax advantages. In a conventional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but money taken out during retirement are taxed as income. In contrast, with Roth IRAs, you contribute are made with after-tax income, but eligible distributions during retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals are penalty-free if you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, both traditional and Roth IRAs are open to those with an earned 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: A Simplified Employee Pension (SEP) 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 self-employed individual, you (the employee) cannot make additional contributions more than the 25% you (the employer) have designated. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. It's your choice whether to contribute a fixed dollar figure or a percentage of wages to employee accounts. SEP IRAs works well for businesses that experience periods of inconsistent earnings. Unlike other plans, SEP IRAs lack costly startup or administrative fees.
SEPs work like conventional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 25% of compensation, or
- $70,000 for 2025
As a self-employed person, the allowable contribution 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 savings option for the self-employed intended for businesses with no employees or if the only employee is your spouse. This type of plan operate much like traditional employer-managed 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the increased savings potential often come with more constrained investment avenues. With this type of plan, you can make either traditional or Roth deferrals, which have 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: As a self-employed individual with a solo 401(k) plan, you can make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employment income, subject to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you're over 50, or $34,750 if you attain age 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your adjusted self-employment income, which is your net profit minus half of your self-employment tax and the deferrals you made.
Your combined contributions must not surpass $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: Defined benefit plans is a retirement option that guarantees a fixed, predetermined benefit to self-employed individuals upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but allows self-employed individuals to know the precise amount they'll have in retirement. This strategy is recommended for wealthier entrepreneurs who want to save a substantial amount for retirement and are prepared to contribute larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxed as income in retirement.
Eligibility: Self-employed professionals running an owner-only business or with less than five employees 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. Generally, good candidates for defined benefit plans tend to be:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% with plans to contribute more
- Businesses showing consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution requires calculation from an actuary using your financial situation, age, and savings targets. Contribution limits change annually.
The Importance of a Financial Advisor in Anchorage, AK for Your Self-Employed Retirement Plan
Working with a financial advisor in Anchorage, AK experienced with retirement plans for the self-employed serves as an essential partner for self-employed individuals. They offer the knowledge to assist guide you through the challenges of retirement planning and design a customized plan that matches your objectives. Your advisor in Anchorage, AK 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. Included in what we do for you features:
- Help you choose a plan that aligns with your objectives and circumstances
- Further adapt the plan to fit you personally even further
- Adopt a written plan that complies with IRS regulations
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan as needed
- Provide ongoing education and advice throughout your retirement planning process
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Anchorage, AK: Correct Capital's Process
Entrepreneurs in Anchorage, AK who don’t have the time or expertise to handle their own retirement planning on their own may end up overwhelmed as they look at their available plans. At Correct Capital, our Anchorage, AK financial advisors take on the bulk of your retirement planning for you, working to make meeting your future savings targets as easy 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 initial call allows us to understand what you're looking for with zero commitment or major time investment on your part.
- Gather Information: Should we agree to proceed, we'll gather information, including your employee count, your existing financial picture, and your retirement goals. This allows us to put together a tailored approach suited specifically for your needs.
- Review Your Plan: After we put together a plan using the information you provide, we'll meet with you and discuss your plan in detail to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can initiate your savings journey. Throughout our relationship, we'll meet with you and track your progress to keep it tailored to your evolving circumstances.
Our Anchorage, AK financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Anchorage, AK 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 Anchorage, AK
Your business isn't "just a business" to you, and your Anchorage, AK financial advisors must deliver more than simply sound financial advice. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to create tailored self-employed retirement plans. To every client in Anchorage, AK, we provide 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.
