Self-employed retirement plans Baton Rouge, LA. The independence of owning your own business in Baton Rouge, LA is one of the best aspects of having a self-directed career. Even so, this flexibility can come with certain challenges, especially regarding retirement savings, 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 could benefit from understanding their retirement options. In addition to having a more comfortable retirement, partnering with a financial advisor in Baton Rouge, LA to create your self-employed retirement plan delivers significant tax advantages that allow both you and your business to thrive.
Few Baton Rouge, LA wealth management and retirement planning firms understand the needs of entrepreneurs as well as Correct Capital. Our founder's father was a small business owner himself (learn more about our story here), and our firm are deeply experienced in supporting entrepreneurs with their retirement planning needs. We understand that your business and retirement aspirations aren’t limited to simple financial figures, and we work tirelessly to provide personalized solutions that reflect your objectives. Continue exploring to find out about your self-employed retirement plan options in Baton Rouge, LA, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Baton Rouge, LA today.
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Why Baton Rouge, LA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also deliver real benefits today. With customizable contribution options to substantial tax savings, partnering with a financial advisor in Baton Rouge, LA enables you to customize your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
For those with fluctuating income over time, a plan like a SEP IRA or Solo 401(k) provides the flexibility to adjust how much you save:
- Customizable Contributions: Set aside more during profitable years and scale back when revenues are down, so your plan aligns with your cash flow.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw tax-free later—a wise move if you believe your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed deliver significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, allowing you to keep more of your earnings.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to accumulate.
- State-Specific Incentives: In some states, you could qualify for state-specific tax breaks as a sole proprietor. These local incentives help make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can claim a tax credit of up to 50% of the first $2,000 put into a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure retirement requires more than how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Allocating your investments across varied stocks, bonds, and other assets can help minimize exposure to risk while helping to grow your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net prevents you from tapping into your nest egg during financial hardships and facing tax penalties.
Plan for the Future of Your Baton Rouge, LA Business
A thoughtful retirement strategy also helps you prepare for what’s next with your Baton Rouge, LA business:
- Selling Your Business: When selling your business, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and don’t transfer with the business. These accounts can provide the reliable income you’ll need in the future. Keep in mind that while the sale of a business usually creates a capital gain, deposits into these plans are capped at annual limits (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you might face when you sell your business.
- Succession Planning: If you’re passing the business on, your nest egg ensure the funds you need through the transition. You can also work with a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens associated with the transaction.
With the best-fit retirement strategy, you manage your financial future, lower your tax bill, and establish a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Baton Rouge, LA Now?
There’s no denying that time is one of the most crucial assets in retirement planning. Beginning sooner rather than later not only allows you to build a larger nest egg but also minimizes the financial burden of playing catch-up as you get older. Here’s why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings can have a major impact on the amount you’ll have when you stop working. The biggest reason is compound interest—the powerful process where your investments grow, and those returns, in turn, accumulate even more returns. The more time your money has to grow, the larger the benefit of this compounding process.
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 waits until age 40 but puts away $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex contributes $180,000 and ends up with $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently often create significant growth. Consider this example showing the power of compounding:
- Starting at age 25: Putting aside $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 leaves you with only $235,412.97* by age 65—a gap of over $260,000, simply due to a 10-year delay.
Saving early, the less effort required each year to meet your retirement goals.
*The figures provided in this example represent 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 for illustrative purposes only and are not a promise of future results. Outcomes may change due to elements like market conditions, fees, and personal factors. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Baton Rouge, LA, it might seem easier to prioritize reinvesting in your business rather than saving for retirement. That said, beginning a plan now enables you to:
- Take advantage of growth that is tax-deferred or penalty-free withdrawals down the road.
- Enjoy flexible contributions that change with your cash flow.
- Build a safety net that offers peace of mind, no matter how your business changes.
Starting early, the less you’ll be required to worry about playing catch-up later in life. Taking steps toward your retirement goals today means managing your financial future and giving yourself the ability to concentrate on your goals—both for your golden years and your Baton Rouge, LA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for self-employed individuals in Baton Rouge, LA, each with its own advantages and considerations. A financial advisor is available to help you evaluate the pros and cons of each choice and choose the one most suitable for your needs. Generally speaking, your self-employed retirement plan options in Baton Rouge, LA consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that offer specific tax advantages. In a standard IRA, the money you contribute is often tax-deductible, and investment earnings grow tax-deferred, but retirement distributions are taxable. In contrast, Roth IRAs require contributions using income already taxed, but eligible distributions during retirement, including earnings, are tax-free. In both types of accounts, withdrawals don’t incur penalties as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are open to those with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA offers a way to save for retirement that allows those who are self-employed to set aside a portion of their self-employment income. Contributions must come from an employer, so, as a independent business owner, you (the employee) would not be able to contribute beyond 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 have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for businesses that experience periods of inconsistent earnings. Compared to other retirement options, SEP IRAs lack expensive setup or ongoing fees.
SEPs operate like traditional IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
Eligibility: Any employer, including the self-employed can establish 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 allowable contribution 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 intended for businesses without employees or when the sole employee is your spouse. These plans are similar to traditional employer-managed 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This offers more savings versus SEPs or IRAs; however, the extra savings options often come with 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 are eligible to open and contribute to a solo 401(k).
Contribution Limits: If you are self-employed with a solo 401(k) plan, you have the ability to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) are limited to 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.
Total contributions are capped at $70,000, or $77,500 for those aged 50 and older (in 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan represents a type of retirement plan that delivers a fixed, predetermined benefit to business owners upon retirement. In contrast to the plans discussed earlier, a defined benefit plan doesn't fluctuate based on investment returns, but lets individuals clearly understand exactly how much they'll receive in retirement. This option is best suited for wealthier entrepreneurs who want to save a significant sum for retirement and are willing to make larger deposits. Contributions offer tax-deferred growth, and withdrawals incur taxes as income in retirement.
Eligibility: Entrepreneurs operating a solo business or employing fewer than five people are eligible to open an individual defined benefit plan, but it's typically suggested for individuals aged 50+ who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans include:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Organizations that already put in 3-4% but are open to increasing contributions
- Organizations that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The contribution limit requires calculation from an actuary using your income, age, and retirement goals. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Baton Rouge, LA for Your Self-Employed Retirement Plan
Working with a financial advisor in Baton Rouge, LA experienced with retirement plans for the self-employed can be an important asset for entrepreneurs. They offer the knowledge to assist navigate the complexities of retirement planning and craft a customized plan that matches your objectives. An expert in your area will assess where you stand financially, understand your risk tolerance, and guide you in choosing wisely about saving and investing for retirement. A key part of what we do for you involves:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Tailor the plan to your specific situation even further
- Adopt a written plan that complies with IRS regulations
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Track and fine-tune your plan as needed
- 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 Baton Rouge, LA: Correct Capital's Process
Baton Rouge, LA business owners who aren’t equipped with the time or understanding to manage their self-employed retirement plan independently may end up overwhelmed when faced with their available plans. With Correct Capital, our Baton Rouge, LA financial advisors manage the lion's share of your retirement strategy for you, to help make meeting your financial objectives as hassle-free 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: In just 20 minutes, a member of our advisor team can determine if our services align for you and your business. This short conversation lets us learn about your needs with zero commitment or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including whether you have employees, your current financial situation, and your future objectives. This enables us to craft a personalized strategy designed just for you.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll meet with you and discuss your plan step by step to make sure it's clear and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can start saving. Over the course of our partnership, we'll have regular meetings and review your strategy to make sure it remains aligned with your goals.
Our Baton Rouge, LA financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in Baton Rouge, LA include:
- 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 Baton Rouge, LA
Your business isn't "just a business" to you, and your Baton Rouge, LA financial advisors need to offer more than just good financial guidance. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to deliver customized self-employed retirement plans. We offer all our Baton Rouge, LA clients our I.O.U. promise: everything we recommend 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.
