Self-employed retirement plans Arlington, TX. The flexibility of owning your own business in Arlington, TX is one of the best aspects of having a self-directed career. That said, this freedom often comes with a lack of security, particularly when it comes to building your retirement fund, because you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider understanding their retirement options. In addition to having a more secure retirement, working with a financial advisor in Arlington, TX to set up your self-employed retirement plan delivers significant tax advantages that help you to move your business forward.
Few Arlington, TX financial advisory and retirement planning firms understand the needs of small business owners better than Correct Capital. Our founder's father was a small business owner himself (check out our story here), and Correct Capital are deeply experienced in supporting entrepreneurs with their retirement planning needs. We know that your business and retirement aspirations go far beyond basic numbers, and we work tirelessly to offer personalized solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Arlington, TX, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Arlington, TX today.
Why Arlington, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help 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 Arlington, TX allows you to create your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) gives you the option to tailor how much you save:
- Customizable Contributions: Contribute more during successful years and cut back when revenues are down, so that your plan fits your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw tax-free later—a wise move if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, allowing you to keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to compound.
- State-Specific Incentives: In some states, you may be eligible for extra deductions as a business owner. These state-level incentives help make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can apply for a 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
Building a secure retirement isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Spreading your investments across varied stocks, bonds, and other assets is a smart way to mitigate financial risk while helping to grow your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business helps you avoid tapping into your nest egg during challenging periods and risking extra costs.
Plan for the Future of Your Arlington, TX Business
Preparing for retirement also helps you think through what’s next with your Arlington, TX 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 accounts can provide the reliable income you’ll need during retirement. It’s important to note that while the sale of a business usually creates a capital gain, retirement plan contributions are capped at annual limits (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- 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 nest egg provide financial security through the transition. You may also partner with a financial advisor with expertise in succession and retirement planning to reduce taxes on the sale.
With the proper savings strategy, you manage your financial future, reduce your tax burden, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Arlington, TX Now?
Time remains one of the most important resources when it comes to saving for retirement. Starting early not only helps you grow a bigger financial cushion but also reduces 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
Waiting to start your retirement fund could lead to a major impact on the savings you’ll have when you stop working. The primary reason is compound interest—the concept where your investments earn returns, and those returns, subsequently, earn even more returns. The greater time span your money has to grow, the larger the benefit of this growth.
Example: Two individuals, Alex and Taylor are both self-employed professionals. Both of them want 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 make up for lost time.
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 can lead to substantial 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 average annual return of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Saving the same $200 per month would result in only $235,412.97* by age 65—a shortfall of over $260,000, just from a 10-year delay.
Saving early, the less you need to save each year to reach your retirement goals.
*The figures provided in this example are estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are meant to provide general guidance and are not a promise of future results. Your individual results may differ due to elements like market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Arlington, TX, it can be tempting to put more emphasis on reinvesting in your business over saving for retirement. Even so, starting a plan now enables you to:
- Take advantage of growth that is tax-deferred or withdrawals without taxes down the road.
- Take advantage of adjustable savings that adapt to your earnings.
- Create a financial cushion that ensures stability, no matter how your business develops.
Getting started now, the less you’ll be required 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 freedom to focus on your objectives—both for your retirement years and your Arlington, TX business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for entrepreneurs in Arlington, TX, each with its own pros and cons. A financial advisor can help you understand the benefits and drawbacks of each choice and choose the one best suited for your unique situation. In most cases, your self-employed retirement plan options in Arlington, TX consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that include key tax perks. In a traditional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but retirement distributions are taxable. In contrast, Roth IRAs require contributions from post-tax earnings, but eligible distributions during retirement, including earnings, are tax-free. In both accounts, withdrawals are penalty-free if you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are available to anyone 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 offers a way to save for retirement that allows those who are self-employed to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a independent business owner, you (the employee) would not be able to contribute more than the 25% you (the employer) allocate. 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 set monetary value or a percentage of wages to employee accounts. A SEP IRA may be ideal for businesses that experience cycles of high revenue and low revenue. Unlike other plans, SEP IRAs are free of the high fees associated with starting or maintaining other plans.
SEPs work like standard IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
Eligibility: Any employer, including the self-employed 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
As a self-employed person, 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 self-employed retirement plan intended for businesses with no employees or when the sole employee is your spouse. This type of plan function similarly to standard 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the additional opportunities often come with more limited investment options. Using a solo 401(k), 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 can set up 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 earned income from self-employment, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 for those aged 50 and above, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your adjusted self-employment income, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
Your combined contributions must not surpass $70,000, or $77,500 for individuals aged 50+ (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans is a retirement option that provides a fixed, predetermined benefit to business owners upon retirement. As opposed to defined contribution plans, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine exactly how much they'll have in retirement. This option is ideal for high-earning self-employed individuals who want to save a large amount for retirement and can commit to making sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income during retirement.
Eligibility: Entrepreneurs operating a solo business or employing fewer than five people can open an individual defined benefit plan, but it's generally suggested for those over 50 who earn at least $250,000 a year. In most cases, 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% but are open to increasing contributions
- Companies with proven consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The contribution limit requires calculation from an actuary based on your income, age, and retirement goals. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Arlington, TX for Your Self-Employed Retirement Plan
Partnering with an advisor in Arlington, TX specialized in self-employed retirement plans is an invaluable resource for those working for themselves. They have the expertise to help navigate the complexities of retirement planning and develop a personalized approach that reflects your aspirations. An expert in your area will assess where you stand financially, understand your risk tolerance, and assist you in making informed decisions about saving and investing for retirement. Part of what we do for you features:
- Assist in selecting a plan that best fits your needs and goals
- Tailor the plan to fit you personally even further
- Adopt a written plan in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Ensure you comprehend the plan's terms
- Track and fine-tune your plan to keep it aligned with your goals
- Provide ongoing education and advice to help you navigate your retirement journey
- Maximize what you receive in retirement by making the most of your social security
Self-Employed Retirement Plans in Arlington, TX: Correct Capital's Process
Entrepreneurs in Arlington, TX who don’t have the time or expertise to oversee their self-employed retirement plan on their own may end up overwhelmed by their choices. Through our team at Correct Capital, our Arlington, TX financial advisors handle the lion's share of your retirement planning for you, working to make meeting your retirement goals as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in four simple steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can determine if our services align for you and your business. This brief introduction helps us learn about your needs with no pressure or extensive time commitment on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including how many employees you have (if any), your current financial situation, and your long-term savings targets. This allows us to put together a personalized strategy that aligns with your goals.
- Review Your Plan: After we put together a plan from the information you provide, we'll sit down with you and go over your plan thoroughly to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can begin contributing. Throughout our relationship, we'll check in and review your strategy to keep it tailored to your evolving circumstances.
Our Arlington, TX financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Arlington, TX 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 Arlington, TX
You don't see your business as "just a business", and your Arlington, TX financial advisors should provide more than basic financial recommendations. At Correct Capital, we make it a priority to understand our clients and their businesses to provide tailored self-employed retirement plans. All our clients in Arlington, TX benefit from our I.O.U. promise: all guidance we provide 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.
