Self-employed retirement plans Arlington, TX. The freedom of owning your own business in Arlington, TX is one of the greatest advantages of having a self-directed career. However, this flexibility sometimes brings with a lack of security, notably when it comes to retirement savings, since you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off exploring their options. In addition to enjoying a financially stable retirement, working with a financial advisor in Arlington, TX to set up your self-employed retirement plan delivers significant tax advantages that allow you to move your business forward.
Few Arlington, TX investment consulting and retirement planning firms understand the needs of entrepreneurs better than Correct Capital. Our founder's father was a small business owner himself (check out our story here), and Correct Capital have a rich history of assisting business owners in their retirement planning needs. We recognize that your goals for your business and retirement go far beyond just monetary concerns, and we strive to provide customized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Arlington, TX, or call Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Arlington, TX today.
Why Arlington, TX 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 considerable tax savings, consulting a financial advisor in Arlington, TX helps you 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) provides the freedom to tailor how much you save:
- Customizable Contributions: Set aside more during successful years and reduce savings when your earnings dip, ensuring your plan aligns with your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you settle taxes at the time of contribution, so you can withdraw without tax penalties in the future—an advantageous choice if you anticipate 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 earnings.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to grow.
- State-Specific Incentives: Depending on where you live, you may be eligible for extra credits as a sole proprietor. These state-level incentives make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax 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
Creating a stable future goes beyond just how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and other assets is a smart way to minimize exposure to risk while still growing your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund prevents you from using your retirement funds during tough times and incurring penalties.
Plan for the Future of Your Arlington, TX Business
Preparing for retirement also helps you plan ahead for what’s next with your Arlington, TX business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain yours and won’t be included in the sale. These accounts can provide the reliable income you’ll need during retirement. Keep in mind that while the sale of a business usually creates a capital gain, contributions to retirement accounts 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, factoring in catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions helps lower the taxes you’ll owe when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg ensure financial security during the change. You can also seek advice from a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens during the sale.
With the best-fit retirement strategy, you manage your financial future, reduce your tax burden, and create a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Arlington, TX Now?
There’s no denying that time is one of the most valuable assets when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a bigger financial cushion but also reduces the pressure of playing catch-up as you get older. This is why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings may cause a substantial impact on the amount you’ll have when you reach retirement age. The primary reason is compound interest—the powerful process where your investments earn returns, and those returns, then, accumulate even more returns. The longer your money has to grow, the greater the impact of this growth.
Example: Taylor and Alex 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 postpones starting contributions to age 40 but puts away $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Even modest contributions made consistently may result in impressive growth. Consider this example showing the effect of compound interest:
- Starting at age 25: Putting aside $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: Contributing the same $200 per month yields only $235,412.97* by age 65—a gap of over $260,000, all because of a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to achieve your retirement goals.
*These calculations represent estimates generated with NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. These examples are for illustrative purposes only and cannot predict actual future outcomes. Outcomes may change based on variables including market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in Arlington, TX, it can be tempting to focus more on reinvesting in your business instead of saving for retirement. That said, beginning a plan now enables you to:
- Leverage tax-free future growth or withdrawals without taxes in the future.
- Benefit from adjustable savings that adapt to your income.
- Create a long-term safety measure that offers peace of mind, no matter how your business evolves.
Getting started now, 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 creating for yourself the freedom to turn your attention to your dreams—both for your retirement years and your Arlington, TX business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for self-employed individuals in Arlington, TX, each providing its own benefits and trade-offs. A financial advisor is available to help you evaluate the advantages and disadvantages of each plan and identify the one best suited for your unique situation. Typically, your self-employed retirement plan options in Arlington, TX consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that provide specific tax advantages. In a traditional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are taxable. In contrast, Roth IRA contributions using income already taxed, but retirement withdrawals that qualify, including earnings, are tax-free. In both types of accounts, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, 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 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA is a retirement plan that allows entrepreneurs to save a percentage of their net business profits. Contributions must come from an employer, so, as a independent business owner, you (the employee) are limited to contributions from the employer role above the 25% you (the employer) have designated. If you have employees, it's required to contribute the same amount for them as you do for yourself. You may choose to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for businesses that experience fluctuating revenue streams. Unlike other plans, SEP IRAs are free of expensive setup or ongoing fees.
SEPs operate like traditional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can open 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: Solo 401(k)s, also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan meant for businesses with no employees or where the only employee is a spouse. These plans are similar to 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 than 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 offer the same tax benefits as their IRA contribution counterparts.
Eligibility: Only 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 are allowed to make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, 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 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) must not surpass 25% of your net self-employment income, which is your net profit minus 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 (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan offers a structured retirement solution that provides a fixed, predetermined benefit to self-employed individuals upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but lets individuals clearly understand what they'll receive in retirement. This plan is best suited for high-earning entrepreneurs who are focused on saving a significant sum for retirement and can commit to making larger deposits. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income during retirement.
Eligibility: Self-employed professionals operating a solo business or employing fewer than five people may establish an individual defined benefit plan, but it's typically suggested for those over 50 who make $250,000 or more annually. Typically, good candidates for defined benefit plans tend to be:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% with plans to contribute more
- Businesses showing consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The contribution limit requires calculation from an actuary based on your earnings, age, and retirement objectives. Allowable contributions are adjusted each year.
The Importance of a Financial Advisor in Arlington, TX for Your Self-Employed Retirement Plan
A financial advisor in Arlington, TX experienced with retirement plans for the self-employed serves as an important asset for those working for themselves. They offer the knowledge to assist guide you through the challenges of retirement planning and design a personalized approach that aligns with your goals. A financial advisor in Arlington, TX will assess where you stand financially, determine how much risk you’re comfortable with, and assist you in choosing wisely about saving and investing for retirement. A key part of what we do for you features:
- Assist in selecting a plan that best fits your needs and goals
- Further adapt the plan to your specific situation even further
- Adopt a written plan that complies with IRS regulations
- Organize a trust plan to manage your assets
- Ensure you comprehend the plan's terms
- Review and modify your plan to keep it aligned with your goals
- Offer continued financial education and guidance 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 Arlington, TX: Correct Capital's Process
Entrepreneurs in Arlington, TX who lack the time, interest, or knowledge to oversee their own retirement planning on their own often feel overwhelmed when faced with their available plans. With Correct Capital, our Arlington, TX financial advisors take on the lion's share of your savings plan setup for you, and strive to ensure 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 just four steps:
- 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 brief introduction allows us to understand what you're looking for with no pressure or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including whether you have employees, your present financial standing, and your future objectives. This enables us to craft a custom plan designed just for you.
- Review Your Plan: When we finalize a plan using the information you provide, we'll meet with you and discuss your plan step by step 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 put everything in place so you can start saving. Throughout our relationship, we'll meet with you and monitor your plan to ensure it stays suited to your needs.
Our Arlington, TX financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Arlington, TX include:
- 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
- Retirement Planner
Call Correct Capital for Your Self-Employed Retirement Plan in Arlington, TX
You don't see your business as "just a business", and your Arlington, TX financial advisors should provide more than simply sound financial advice. With Correct Capital, we make it a priority to understand our clients and their businesses to create personalized self-employed retirement plans. To every client in Arlington, TX, we provide our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
