Self-employed retirement plans Brownsville, TX. The independence of running your own company in Brownsville, TX is one of the best aspects of having a self-directed career. However, this flexibility sometimes brings with potential drawbacks, especially regarding planning for retirement, since you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, yet countless should consider looking into other possibilities. In addition to enjoying a more comfortable retirement, working with a financial advisor in Brownsville, TX to create your self-employed retirement plan delivers significant tax advantages that enable your business to grow and succeed.
Few Brownsville, TX financial advisory and retirement planning firms understand the needs of self-employed individuals as well as Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and Correct Capital are deeply experienced in helping businesses with their retirement planning needs. We know that your goals for your business and retirement go far beyond basic numbers, and we are dedicated to offer customized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Brownsville, TX, or call Correct Capital at 877-930-401k or contact us online to talk to a small business financial advisor in Brownsville, TX today.
Why Brownsville, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver real benefits today. From flexible contributions to significant tax savings, consulting a financial advisor in Brownsville, TX helps you create your retirement plan to align with your individual circumstances.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) provides the option to tailor how much you save:
- Customizable Contributions: Set aside more during high-income years and scale back when income is lower, ensuring your plan works with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw tax-free later—an advantageous choice if you expect your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, allowing you to keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, providing your money more time to compound.
- State-Specific Incentives: Based on your location, you might access extra credits as a sole proprietor. These regional incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can take advantage of 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
Creating a stable future isn’t only about how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Distributing your investments across a mix of stocks, bonds, and alternatives is a smart way to reduce risk while helping to grow your nest egg.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business ensures you don’t using your retirement funds during challenging periods and facing tax 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: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These savings ensure the steady income you’ll need during retirement. It’s important to note that while selling your business results in a capital gain, deposits into these plans are capped at annual limits (e.g., a maximum of $7,000 for IRAs or up to $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you are required to pay when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts ensure the funds you need through the transition. You might want to seek advice from a financial advisor experienced in both succession and retirement strategies to help with taxes associated with the transaction.
With the right retirement plan, you can take control of your financial future, cut down your tax obligations, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Brownsville, TX Now?
Time remains one of the most crucial assets in retirement planning. Starting early not only helps you grow a bigger financial cushion but also lowers the pressure of catching up later in life. This is why it makes sense to begin today:
The Cost of Waiting
Waiting to start your retirement fund can have 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, in turn, generate even more returns. The longer your money has to grow, the larger the impact of this growth.
Example: Taylor and Alex are both self-employed individuals. 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 saves $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time often create substantial growth. Consider this example showing the effect of consistent growth:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month would result in only $235,412.97* by age 65—a difference of over $260,000, simply due to a 10-year delay.
Starting sooner, the less effort required each year to achieve your retirement goals.
*These calculations are estimates generated with NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. This information is for illustrative purposes only and cannot predict actual future outcomes. Actual results may vary depending on variables including market conditions, fees, and individual circumstances. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in Brownsville, TX, it might seem easier to prioritize reinvesting in your business over saving for retirement. Even so, initiating a plan now allows you to:
- Benefit from tax-free future growth or penalty-free withdrawals down the road.
- Enjoy flexible contributions that change with your income.
- Build a financial cushion that offers peace of mind, no matter how your business evolves.
Getting started now, the less you’ll be required to worry about making up for lost time later in life. Taking steps toward your retirement goals today means taking control of your financial future and giving yourself the opportunity to turn your attention to your goals—both for your golden years and your Brownsville, TX business.
Types of Self-Employed Retirement Plans
There are several retirement savings options available for entrepreneurs in Brownsville, TX, each with its own pros and cons. A financial advisor will guide you to learn about the advantages and disadvantages of each choice and identify the one most suitable for your needs. Generally speaking, your self-employed retirement plan options in Brownsville, TX are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that include specific tax advantages. In a standard IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but withdrawals in retirement are subject to income tax. In contrast, with Roth IRAs, you contribute using income already taxed, but eligible distributions during retirement, including earnings, are tax-free. In both accounts, withdrawals are penalty-free 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 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: SEP IRAs offers a way to save for retirement that permits 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) are limited to contributions from the employer role more than the 25% you (the employer) have designated. If you have employees, you must contribute the same amount for them as you do for yourself. You may choose to contribute a flat-dollar amount or a percentage of wages to employee accounts. SEP IRAs works well for entrepreneurs facing fluctuating revenue streams. In contrast to some alternatives, SEP IRAs are free of the high fees associated with starting or maintaining other plans.
SEPs work like conventional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 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, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses without employees or where the only employee is a spouse. This type of plan operate much like traditional employer-managed 401(k) plans, and allow you to contribute as both the employer and the employee with pre-tax money. This provides more savings versus SEPs or IRAs; however, the increased savings potential can be balanced by more restricted investment choices. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which offer 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 self-employed earnings, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 if you attain age 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) must not surpass 25% of your net earnings from self-employment, which is your net profit minus half of your self-employment tax and the deferrals you made.
Total contributions are capped at $70,000, or $77,500 for those aged 50 and older (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 guarantees a pre-established payout to business owners upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but allows self-employed individuals to know exactly how much they'll get in retirement. This option is best suited for higher-income self-employed individuals who are focused on saving a large amount for retirement and are willing to make sizeable contributions. Contributions are tax deferred, and withdrawals are taxable as income upon retirement.
Eligibility: Any self-employed individual operating a solo business or with less than five employees can open an individual defined benefit plan, but it's most commonly advised for people above age 50 who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans include:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Organizations that already put in 3-4% with plans to contribute more
- Companies showing consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions must be determined by an actuary based on your financial situation, age, and savings targets. Contribution limits are updated yearly.
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 is an important asset for self-employed individuals. They have the expertise to help navigate the complexities of retirement planning and craft a customized plan that matches your objectives. A financial advisor in Brownsville, TX will evaluate your financial situation, identify your risk preferences, and assist 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 suits your unique requirements
- Further adapt the plan to your specific situation even further
- Create a written plan in accordance with IRS guidelines
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Track and fine-tune your plan to keep it aligned with your goals
- Deliver continuous support and financial insights as you continue on the road to retirement
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Brownsville, TX: Correct Capital's Process
Self-employed individuals in Brownsville, TX who aren’t equipped with the time or understanding to oversee their retirement savings strategy independently may end up overwhelmed as they look at their available plans. Through our team at Correct Capital, our Brownsville, TX financial advisors manage the majority of your retirement strategy for you, and strive to ensure meeting your retirement goals as straightforward as possible for you. We can help you get set up your self-employed retirement plan in just four steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can determine if we're a good fit for you and your business. This short conversation helps 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 ask for information, including your employee count, your present financial standing, and your future objectives. This allows us to put together a tailored approach suited specifically for your needs.
- Review Your Plan: When we finalize a plan from 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: When we finalize on your plan, we'll implement the necessary steps so you can initiate your savings journey. As time goes on, we'll check in and track your progress to keep it tailored to your evolving circumstances.
Our Brownsville, TX financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are required by law and ethical standards to prioritize your needs above all else.
Other financial advisory services we offer in Brownsville, TX 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 Brownsville, TX
Your business isn't "just a business" to you, and your Brownsville, TX financial advisors must deliver more than simply sound financial advice. At Correct Capital, we take the time to get to know our clients and their businesses to create tailored self-employed retirement plans. All our clients in Brownsville, 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.
