Self-employed retirement plans Brownsville, TX. The freedom of running your own company in Brownsville, TX is one of the best aspects of working for yourself. Even so, this independence often comes with potential drawbacks, especially in terms of retirement savings, because you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless should consider looking into other possibilities. In addition to achieving a more secure retirement, seeking advice from a financial advisor in Brownsville, TX to set up your self-employed retirement plan delivers significant tax advantages that allow both you and your business to thrive.
Few Brownsville, TX wealth management and retirement planning firms truly grasp the challenges faced by entrepreneurs as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (check out our story here), and Correct Capital have a rich history of supporting entrepreneurs with their retirement planning needs. We recognize that your goals for your business and retirement aren’t limited to just monetary concerns, and we work tirelessly to create customized solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Brownsville, TX, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a small business financial advisor in Brownsville, TX today.
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Why Brownsville, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also provide real benefits today. Offering flexibility in contributions to considerable tax savings, consulting a financial advisor in Brownsville, TX helps you create your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) provides the option to tailor how much you save:
- Customizable Contributions: Save extra during successful years and reduce savings when your earnings dip, so that your plan fits your current income.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw without tax penalties in the future—an advantageous choice if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Plans designed for the self-employed provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, helping you keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you might access additional tax breaks as a self-employed individual. These regional incentives make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a credit of up to 50% of the first $2,000 contributed a retirement plan, cutting down 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 about how you invest:
- Diversified Portfolios: Spreading your investments across different asset classes like stocks and bonds can help reduce risk while helping to grow your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net ensures you don’t using your retirement funds during tough times and incurring penalties.
Plan for the Future of Your Brownsville, TX Business
Preparing for retirement enables you to think through what’s next with your Brownsville, TX business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s stay in your name and won’t be included in the sale. These savings can provide the reliable income you’ll need during retirement. Keep in mind that while selling your business results in a capital gain, retirement plan contributions are capped at annual limits (e.g., a maximum of $7,000 for IRAs or up to $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you might face when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings offer a stable foundation through the transition. You might want to partner with a financial advisor with expertise in succession and retirement planning to reduce taxes during the sale.
With the best-fit retirement strategy, you can take control of your financial future, cut down your tax obligations, and establish a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Brownsville, TX Now?
Time is one of the most crucial factors when it comes to saving for retirement. Starting early not only allows you to build a bigger financial cushion but also lowers the pressure of playing catch-up as you get older. The following are reasons why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund may cause a substantial impact on the total you’ll have when you stop working. The biggest reason is compound interest—the financial principle where your investments grow, and those returns, then, generate even more returns. The longer your money has to grow, the greater the benefit of this growth.
Example: Taylor and Alex are both entrepreneurs. Their shared goal is to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor waits until age 40 but contributes $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex puts in $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently can lead to substantial growth. Take a look at this scenario showing the impact of compound interest:
- Starting at age 25: If you invest $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 leaves you with only $235,412.97* by age 65—a difference of over $260,000, just from a 10-year delay.
Saving early, the lower your annual savings needs each year to reach your retirement goals.
*The numbers shown in this scenario are based on estimates derived from NerdWallet’s Compound Interest Calculator, assuming 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. Your individual results may differ depending on elements like market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Brownsville, TX, it can be tempting to prioritize reinvesting in your business over saving for retirement. That said, initiating a plan now enables you to:
- Take advantage of tax-free future growth or withdrawals without taxes down the road.
- Take advantage of contribution flexibility that adapt to your earnings.
- Establish a safety net that provides security, no matter how your business changes.
Getting started now, the less you’ll need to worry about playing catch-up later in life. Building your retirement savings today means taking control of your financial future and giving yourself the opportunity to concentrate on your objectives—both for your retirement years and your Brownsville, TX business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for self-employed individuals in Brownsville, TX, each providing its own benefits and trade-offs. A financial advisor is available to help you learn about the pros and cons of each plan and determine the one most suitable for your needs. In most cases, your self-employed retirement plan options in Brownsville, TX consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that provide distinct tax benefits. In a standard IRA, the money you contribute is often tax-deductible, and investment earnings grow tax-deferred, but retirement distributions are subject to income tax. In contrast, Roth IRA contributions using income already taxed, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are accessible for individuals with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA serves as a retirement savings option that permits those who are self-employed to set aside a portion of their self-employment income. Contributions are strictly employer contributions an employer, so, as a independent business owner, you (the employee) cannot make additional contributions more than the 25% you (the employer) already contributed. If you have employees, you must 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. This type of plan works well for businesses that experience fluctuating revenue streams. In contrast to some alternatives, SEP IRAs don’t have costly startup or administrative fees.
SEPs work like traditional IRAs, where the contributions are tax-deferred and withdrawals are taxed as income.
Eligibility: Employers of any type, including self-employed individuals can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 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: A Solo 401(k) plan, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan designed for businesses without employees or where the only employee is a spouse. These plans are similar to standard 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the extra savings options may be offset by more limited investment options. 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: Only business owners and their spouses may establish and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you have the ability 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 if you're over 50, or $34,750 for those who turn 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your net self-employment income, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
Total contributions are capped at $70,000, or $77,500 for individuals aged 50+ (in 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that delivers a fixed, predetermined benefit to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, this plan is not influenced by market performance, but allows self-employed individuals to know the precise amount they'll receive in retirement. This plan is ideal for higher-income entrepreneurs who are focused on saving a significant sum for retirement and are prepared to contribute substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income upon retirement.
Eligibility: Any self-employed individual running an owner-only business or employing fewer than five people may establish an individual defined benefit plan, but it's most commonly recommended for people above age 50 who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans tend to be:
- Partners or owners who want to invest more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% and are willing to do more
- Companies with proven consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The cap on contributions must be determined by an actuary based on your income, age, and retirement goals. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Brownsville, TX for Your Self-Employed Retirement Plan
Partnering with an advisor in Brownsville, TX experienced with retirement plans for the self-employed can be an invaluable resource for entrepreneurs. They have the expertise to help understand the intricacies of saving for retirement and develop a tailored strategy that matches your objectives. An expert in your area will evaluate your financial situation, understand your risk tolerance, and assist you in selecting the best options about saving and investing for retirement. Included in what we do for you includes:
- Assist in selecting a plan that aligns with your objectives and circumstances
- Tailor the plan to your specific situation even further
- Formalize a plan in writing as required by IRS rules
- Organize a trust plan to manage your assets
- Help you understand the plan's terms
- Monitor and adjust your plan as needed
- Deliver continuous support and financial insights as you continue on the road to retirement
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Brownsville, TX: Correct Capital's Process
Brownsville, TX business owners who aren’t equipped with the time or understanding to oversee their own retirement planning themselves often feel overwhelmed when faced with their choices. At Correct Capital, our Brownsville, TX financial advisors handle the bulk of your retirement strategy for you, and strive to ensure meeting your financial objectives as straightforward as possible for you. We can help you get set up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team can help understand if we're suited to your needs for you and your business. This short conversation lets us understand what you're looking for with zero commitment or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll request information, including how many employees you have (if any), your current financial situation, and your retirement goals. This helps us create a tailored approach that aligns with your goals.
- Review Your Plan: After we put together a plan based on the information you provide, we'll schedule a meeting and discuss your plan thoroughly to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll put everything in place so you can start saving. As time goes on, we'll have regular meetings and review your strategy to keep it tailored to your evolving circumstances.
Our Brownsville, TX financial advisors and retirement plan consultants serve as fiduciary advisors, who are obligated to they are legally and ethically bound to do what's in your best interest.
Other financial advisory services we offer in Brownsville, TX 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 Brownsville, TX
Your business isn't "just a business" to you, and your Brownsville, TX financial advisors should provide more than basic financial recommendations. With Correct Capital, we make it a priority to understand our clients and their businesses to provide personalized self-employed retirement plans. We offer all our Brownsville, TX clients our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To begin on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
