Self-employed retirement plans Boise City, ID. The independence of being your own boss in Boise City, ID is one of the greatest advantages of being self-employed. Even so, this freedom often comes with certain challenges, notably regarding retirement savings, because you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many should consider exploring their options. In addition to achieving a more comfortable retirement, partnering with a financial advisor in Boise City, ID to establish your self-employed retirement plan offers significant tax advantages that enable both you and your business to thrive.
Few Boise City, ID 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 (read more of our story here), and Correct Capital have a rich history of helping businesses with their retirement planning needs. We understand that your business and retirement aspirations go far beyond just monetary concerns, and we strive to create tailored solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Boise City, ID, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Boise City, ID today.
Why Boise City, ID Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver immediate benefits today. With customizable contribution options to considerable tax savings, working with a financial advisor in Boise City, ID helps you design your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) gives you the freedom to modify how much you save:
- Customizable Contributions: Set aside more during successful years and cut back when income is lower, so that your plan aligns with your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw your savings tax-free down the road—a smart decision if you believe your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, allowing you to keep more of your income.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, giving your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you might access state-specific tax breaks as a business owner. These regional incentives help make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax 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 goes beyond just how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across a mix of stocks, bonds, and alternatives can help reduce risk while still growing your savings.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net ensures you don’t dipping into savings during tough times and incurring penalties.
Plan for the Future of Your Boise City, ID Business
Retirement planning also helps you think through what’s next with your Boise City, ID business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and don’t transfer with the business. These accounts ensure the financial stability you’ll need later on. It’s important to note that while selling a business often leads to a capital gain, deposits into these plans are capped at annual limits (e.g., as much as $7,000 for IRAs or up to $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you might face when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement accounts provide the funds you need as you make this shift. You might want to partner with a financial advisor with expertise in succession and retirement planning to help with taxes associated with the transaction.
With the right retirement plan, you gain control over your financial future, reduce your tax burden, and create a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Boise City, ID Now?
Time remains one of the most crucial resources for building your retirement fund. Beginning sooner rather than later not only allows you to build a more substantial retirement fund but also minimizes the stress of playing catch-up as you get older. This is why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings can have a substantial impact on the total you’ll have when you stop working. The biggest reason is compound interest—the powerful process where your investments generate earnings, and those returns, in turn, generate even more returns. The more time your money has to grow, the more significant the impact of compounding.
Example: Alex and Taylor are both self-employed individuals. 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 contributes $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex invests $180,000 and accumulates $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Small, consistent savings invested steadily often create impressive growth. Take a look at this scenario showing the power of compounding:
- Starting at age 25: By investing $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: Contributing 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 effort required each year to achieve your retirement goals.
*The figures provided in this example are based on estimates calculated using NerdWallet’s Compound Interest Calculator, assuming 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 intended as illustrative examples and cannot predict actual future outcomes. Actual results may vary due to variables including market conditions, fees, and your unique situation. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Boise City, ID, it is often the case that you prioritize reinvesting in your business instead of saving for retirement. Even so, initiating a plan now gives you the chance to:
- Leverage growth that is tax-deferred or penalty-free withdrawals later on.
- Take advantage of adjustable savings that align with your cash flow.
- Create a financial cushion that offers peace of mind, no matter how your business develops.
The sooner you start, the less you’ll be required to worry about catching up later in life. Taking steps toward your retirement goals today means managing your financial future and allowing yourself the freedom to turn your attention to your objectives—both for your future retirement and your Boise City, ID business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for entrepreneurs in Boise City, ID, each offering its own benefits and trade-offs. A financial advisor can help you understand the benefits and drawbacks of each plan and choose the one ideal for your unique situation. In most cases, your self-employed retirement plan options in Boise City, ID consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that offer key tax perks. In a standard IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but retirement distributions are subject to income tax. In contrast, with Roth IRAs, you contribute from post-tax earnings, but eligible distributions during retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals are penalty-free provided you are at least 59½.
Eligibility: Unlike plans linked to your job, traditional and Roth IRAs are available to anyone with taxable earnings.
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 is a retirement plan that permits entrepreneurs to contribute a percentage of their net earnings. Contributions are strictly employer contributions an employer, so, as a sole proprietor, you (the employee) would not be able to contribute 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. It's your choice whether to contribute a fixed dollar figure or a percentage of wages to employee accounts. This type of plan may be ideal for companies with cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs are free of expensive setup or ongoing fees.
SEPs operate like conventional IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
Eligibility: Both employers and self-employed individuals can set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are capped at the lower of:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, commonly known 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 where the only employee is a spouse. Solo 401(k)s operate much like employer-sponsored 401(k) plans, and enable contributions as both an employee or an employer with pre-tax money. This offers more savings than SEPs or IRAs; however, the extra savings options may be offset by more constrained investment avenues. Using a solo 401(k), you can make either traditional or Roth deferrals, which have the same tax benefits as their IRA contribution counterparts.
Eligibility: Solo 401(k)s are available solely to 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:
- 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 are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (as of 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans offers a structured retirement solution that provides 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 allows self-employed individuals to know the precise amount they'll get in retirement. This option is recommended for high-earning professionals who aim to accumulate a substantial amount for retirement and are willing to make substantial contributions. Contributions offer tax-deferred growth, and withdrawals are taxed as income upon retirement.
Eligibility: Self-employed professionals operating a solo business or with less than five employees may establish an individual defined benefit plan, but it's generally suggested for those over 50 who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans are:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Businesses currently investing 3-4% but are open to increasing contributions
- Organizations showing consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution must be determined by an actuary determined by your earnings, age, and retirement objectives. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in Boise City, ID for Your Self-Employed Retirement Plan
Partnering with an advisor in Boise City, ID experienced with retirement plans for the self-employed can be an essential partner for entrepreneurs. They have the expertise to help understand the intricacies of saving for retirement and craft a personalized approach that matches your objectives. A financial advisor in Boise City, ID will assess where you stand financially, understand your risk tolerance, and help you in choosing wisely about saving and investing for retirement. Included in what we do for you involves:
- Guide you in choosing a plan that best fits your needs and goals
- Customize the plan to your needs even further
- Create a written plan as required by IRS rules
- Set up an asset trust plan
- Help you understand the plan's terms
- Track and fine-tune your plan to keep it aligned with your goals
- Offer continued financial education and guidance to help you navigate your retirement journey
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Boise City, ID: Correct Capital's Process
Self-employed individuals in Boise City, ID who aren’t equipped with the time or understanding to handle their own retirement planning independently may end up overwhelmed when faced with their choices. With Correct Capital, our Boise City, ID financial advisors manage the majority 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 four simple steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if we're a good fit for you and your business. This brief introduction lets us get a sense of your goals with no pressure or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll gather information, including your employee count, your existing financial picture, and your long-term savings targets. This allows us to put together a custom plan suited specifically for your needs.
- Review Your Plan: When we finalize a plan based on the information you provide, we'll schedule a meeting and review your plan in detail to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can begin contributing. Over the course of our partnership, we'll check in and monitor your plan to make sure it remains aligned with your goals.
Our Boise City, ID financial advisors and retirement plan consultants are fiduciary advisors, which means they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Boise City, ID 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 Boise City, ID
Your business isn't "just a business" to you, and your Boise City, ID financial advisors should provide more than simply sound financial advice. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to provide personalized self-employed retirement plans. We offer all our Boise City, ID clients our I.O.U. promise: everything we recommend 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.
