Self-Employed Retirement Plans Arnold, MO

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Self-employed retirement plans in Arnold, MO. The flexibility involved with having your own business in Arnold, MO is a wonderful advantage to working for yourself. But more leeway can come with uncertainty, especially in terms of saving for retirement, as you don't have access to any employer plans. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off exploring their options. In addition to setting you up for the retirement of your dreams, working with a financial advisor to get started and maintain your self-employed retirement plan in Arnold, MO offers favorable tax incentives that can help boost you and your business forward.

Only a handful of financial advisory and retirement planning firms will understand the needs of the self-employed and small business owners more than Correct Capital. In fact, we were inspired by a self-employed individual, our founder's father (you can learn more about our story on our website). We know that your business and retirement aspirations go beyond just profit, and we are committed to providing personalized solutions that reflect where you are and where you want to go. Continue reading to learn more about your self-employed retirement plan options in Arnold, MO, or call Correct Capital at 877-930-4015 or fill out our online form to speak to a member of our advisory team now.


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Types of Self-Employed Retirement Plans

There are several retirement savings options available for self-employed individuals, each with its own set of benefits and considerations. A Arnold, MO financial advisor can help you comprehend the pros and cons of each option and opt for the most suitable one for your specific needs. Typically, your self-employed retirement plan options in Arnold, MO are comprised of:


Traditional or Roth IRA

Plan Overview: IRAs, or Individual Retirement Arrangements, are long-term savings plans that allows you to set aside money for the future, with special tax considerations. If you deposit to a traditional IRA, deposits are deducted from your taxable income, and investment earnings grow tax-deferred, but withdrawals in retirement are taxed as regular income. In contrast, Roth IRA deposits are made with money you've already paid taxes on, but you pay no taxes on withdrawals or investment gains. In both accounts, distributions are penalty-free if you are at least 59Ā½.

Eligibility: While many retirement plans, such as 401(k)s, are set up through an employer, traditional and Roth IRAs can be set up by anyone with an earned income.

Contribution Limits: For 2023, annual contribution limits for IRAs are $6,500, or $7,500 if you're 50 or older.

Simplified Employee Pension Plan (SEP IRA)

Plan Overview: A Simplified Employee Pension (SEP) IRA is a retirement plan that allows self-employed individuals to contribute a portion of of the money they make from their self-employment. Since you are self-employed, you (the employee) have a contribution limit of no more than the 25% already contributed by you (the employer). If you have employees, you would have to contribute the same amount for them as you do for yourself. You can either contribute a flat-dollar amount or a percentage of annual income to employee accounts. SEP IRAs may be an excellent self-employed retirement plan if your business goes through fluctuating income periods. SEP IRAs don't have the high upfront costs or administrative expenses other retirement plans do.

SEPs work like traditional IRAs, where deposits are made with money you've yet to pay taxes on and withdrawals are taxed as income.

Eligibility: Self-employed individuals and any employer, can establish a simplified employee pension plan.

Contribution Limits: Contribution limits for employees in a SEP IRA are whichever is the least out of:

  • 25% of compensation, or
  • $66,000

For the self-employed individual, the annual contribution limit is based on a specific formula.

Solo 401(k)

Plan Overview: A Solo 401(k) plan, also known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan for businesses with no employees or whose only employee is a spouse. Solo 401(k)s function about the same as employer-sponsored 401(k) plans, and you can make contributions as both an employer or employee with pre-tax money. This offers more savings than SEPs or IRAs, however the possibility of greater retirement savings is often counteracted by having less investment options available. In a one-participant 401(k) plan, you can make either traditional deferrals (with pre-tax money) or Roth deferrals (with after-tax money).

Eligibility: Only business owners and their spouses can establish 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:

  1. Elective deferrals (as an employee) of 100% of your earned income from self-employment, up to the annual contribution limit. In 2023, those limits are $22,500, or $30,000 if you are 50 or older.
  2. Employer profit-sharing contributions (as an employer) of a maximum of 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.

On an annual basis, contributions cannot exceed $66,000, or $73,500 if you're over age 50 (in 2023).

Individual Defined Benefit Plan

Plan Overview: A defined benefit plan is a retirement plan that offers a a fixed monthly figure to self-employed individuals upon retirement. As opposed to 401(k)s or IRAs, a defined benefit plan doesn't oscillate because of investment returns, but allows self-employed individuals to have an exact dollar figure as their income in retirement. This plan is ideal for high-earning self-employed individuals who want to save a a substantial portion for retirement and are willing to add substantial contributions. Contributions are tax deferred and withdrawals are taxed as income in retirement.

Eligibility: Any self-employed individual who runs a business where they're the only owner or has less than five employees can open an individual defined benefit plan, but it's typically only recommended for those over 50 who earn at least $250,000 a year. Those interested in defined benefit plans tend to be:

  • Partners or owners who desire to save more than $66,000 (or $73,500 over age 50)
  • Companies already contributing 3-4% who are want to do more
  • Companies who have demonstrated consistent profit patterns
  • Partners or owners over age 40 who want to "catch up" or accelerate the retirement savings

Contribution Limits: The contribution limit must be decided by an actuary based on your income, age, and retirement goals. Contribution limits change annually.

The Importance of a Financial Advisor for Your Self-Employed Retirement Plan in Arnold, MO

A financial advisor in Arnold, MO specialized in self-employed retirement plans can be a crucial partner for self-employed individuals. They have the experience to help you understand the intricacies of retirement planning and develop a tailored strategy that gets you where you want to go. A financial advisor will look at where your finances currently are, help you figure out your risk tolerance, and guide you in making informed decisions about your financial future. Part of what we do for you includes:

  • Help you pick a plan that best fits your needs and goals
  • Customize the plan to your needs even further
  • Adopt a written plan in accordance with IRS guidelines
  • Arrange a trust plan for assets
  • Implement a record keeping system
  • Help you understand the plan's terms
  • Monitor and adjust your plan as needed
  • Offer continued financial education and support as long as you work with us
  • Increase your retirement income by maximizing your social security benefits

Self-Employed Retirement Plans in Arnold, MO: Correct Capital's Process

Arnold, MO business owners who don't want to invest the time, interest, and skill set to manage their own self-employed retirement plan can become overwhelmed with the different plans available to them. At Correct Capital, our retirement consultants handle the bulk of the retirement planning work on your behalf, and strive to make achieving the golden years of your dreams as simple as we possibly can. We can help you establish and maintain your self-employed retirement plan in four simple steps:

  1. Schedule a Call — We only need a short 20-minute call for a member of our advisor team to understand if we're the best firm to help you reach your goals. This short introduction lets us understand your needs with no major time investment on your part.
  2. Gather Information — If we seem like a good fit, we'll request information, including how many employees you have (if any), your current finances, and your retirement goals. This allows us to put together a custom plan suited specifically for your needs.
  3. Review Your Plan — Once we've compiled your plan, we'll meet with you and discuss your plan in detail to ensure it's what you were looking for.
  4. Implementation and Monitoring — Once we've enacted your plan, we'll put everything in place so you can start saving. Throughout your time working with us, we'll keep you up-to-date with how things are going and monitor your plan to ensure it stays suited to your needs.

Our financial planners and retirement consultants are fiduciary advisors who have a legal and moral obligation to do what's in your best interest. We are proud to provide transparent communication and excellent service to assist you achieve your self-employed retirement goals.

Other services we offer in Arnold, MO include:

Self-Employed Retirement Plans Arnold, MO | Financial Advisors | Retirement Consultants Near Arnold

Call Correct Capital for Your Arnold, MO Self-Employed Retirement Plan

Your business isn't "just a business" to you, and your Arnold, MO financial advisors need to provide you with more than merely sage financial advice. Correct Capital enjoys getting to know our clients and what makes them and their business tick to deliver personalized self-employed retirement plans. We give all our Arnold, MO clients our I.O.U. promise: all of the advice we give you will be independent, objective, and unbiased. To get started on your self-employment retirement plan in Arnold, MO, call Correct Capital today at 877-930-4015 or contact us online.


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