Self-employed retirement plans Buffalo, NY. The flexibility of running your own company in Buffalo, NY is one of the best aspects of having a self-directed career. Even so, this independence often comes with potential drawbacks, notably when it comes to planning for retirement, because you don't have access to a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off exploring their options. In addition to enjoying a more secure retirement, partnering with a financial advisor in Buffalo, NY to set up your self-employed retirement plan offers significant tax advantages that enable your business to grow and succeed.
Few Buffalo, NY 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 (check out our story here), and our firm take pride in helping businesses with their retirement planning needs. We understand that your business and retirement aspirations go far beyond basic numbers, and we are dedicated to offer customized solutions to meet your unique goals. Read on to discover about your self-employed retirement plan options in Buffalo, NY, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Buffalo, NY today.
Why Buffalo, NY Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also offer immediate benefits today. From flexible contributions to substantial tax savings, working with a financial advisor in Buffalo, NY helps you customize your retirement plan to align with your unique financial situation.
Flexibility That Fits Your Income
If your income changes from year to year, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to modify how much you save:
- Customizable Contributions: Save extra during high-income years and cut back when revenues are down, ensuring your plan fits your current income.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw your savings tax-free down the road—a wise move if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, so you can keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to accumulate.
- State-Specific Incentives: Based on your location, you could qualify for extra deductions as a business owner. These local incentives make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax credit of up to 50% of the first $2,000 they contribute a retirement plan, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement requires more than how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across different stocks, bonds, and alternatives is a smart way to minimize exposure to risk while continuing to build your savings.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business helps you avoid tapping into your nest egg during financial hardships and incurring penalties.
Plan for the Future of Your Buffalo, NY Business
Retirement planning enables you to think through what’s next with your Buffalo, NY business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain yours and don’t transfer with the business. These accounts ensure the financial stability you’ll need during retirement. Keep in mind that while the sale of a business usually creates a capital gain, retirement plan contributions are subject to yearly maximums (e.g., up to $7,000 for IRAs or up to $70,000 for Solo 401(k)s, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you’ll owe when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement accounts offer financial security as you make this shift. You might want to work with a financial advisor who specializes in succession planning and retirement accounts to help with taxes on the sale.
With the right retirement plan, you can take control of your financial future, lower your tax bill, and create a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Buffalo, NY Now?
There’s no denying that time is one of the most valuable resources for building your retirement fund. Beginning sooner rather than later not only lets you accumulate a larger nest egg but also minimizes the stress of catching up later in life. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings could lead to a substantial impact on the savings you’ll have when you reach retirement age. The primary reason is compound interest—the powerful process where your investments earn returns, and those returns, then, earn even more returns. The greater time span your money has to grow, the more significant the benefit of this compounding process.
Example: Alex and Taylor are both self-employed professionals. Both of them want to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor postpones starting contributions to 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 invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time often create substantial growth. Consider this example showing the impact of compound interest:
- Starting at age 25: If you invest $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 would result in only $235,412.97* by age 65—a difference of over $260,000, just from a 10-year delay.
Starting sooner, the less effort required each year to reach your retirement goals.
*The numbers shown in this scenario represent estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is meant to provide general guidance and are not a promise of future results. Your individual results may differ due to elements like market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Buffalo, NY, it is often the case that you prioritize reinvesting in your business rather than saving for retirement. However, beginning a plan now gives you the chance to:
- Leverage tax-free future growth or tax-free withdrawals in the future.
- Benefit from adjustable savings that change with your earnings.
- Build a financial cushion that offers peace of mind, no matter how your business evolves.
Starting early, the less you’ll need to worry about playing catch-up later in life. Saving for retirement now means taking control of your financial future and creating for yourself the opportunity to focus on your dreams—both for your future retirement and your Buffalo, NY business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for those working for themselves in Buffalo, NY, each offering its own pros and cons. A financial advisor can help you evaluate the advantages and disadvantages of each plan and determine the one best suited for your unique situation. Generally speaking, your self-employed retirement plan options in Buffalo, NY are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that offer specific tax advantages. In a conventional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but money taken out during retirement are subject to income tax. In contrast, Roth IRAs require contributions from post-tax earnings, but retirement withdrawals that qualify, including earnings, are tax-free. In both cases, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, IRAs, including traditional and Roth options are available to anyone with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA serves as a retirement savings option that permits those who are self-employed to contribute a percentage of their net earnings. 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, it's required to contribute the same amount for them as you do for yourself. You have the flexibility to contribute a fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA is a good option for businesses that experience cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs operate like standard IRAs, where the contributions are tax-deferred and withdrawals are taxed as income.
Eligibility: Employers of any type, including self-employed individuals can establish 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, also called an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan meant for businesses with no employees or where the only employee is a spouse. This type of plan operate much like employer-sponsored 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This offers more savings than SEPs or IRAs; however, the additional opportunities may be offset by more restricted investment choices. Using a solo 401(k), you can make either traditional or Roth deferrals, which share the same tax benefits as their IRA contribution counterparts.
Eligibility: Solo 401(k)s are available solely to business owners and their spouses may establish and contribute to a solo 401(k).
Contribution Limits: For self-employed individuals with a solo 401(k) plan, you can make two types of contributions:
- Deferrals as an employee of up to 100% of your earned income from self-employment, subject to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you're over 50, 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 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 if you're over age 50 (as of 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan is a retirement option that provides a set amount to entrepreneurs upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but lets individuals clearly understand the precise amount they'll get in retirement. This option is ideal for higher-income self-employed individuals who aim to accumulate a large amount for retirement and can commit to making sizeable contributions. Contributions are tax deferred, and withdrawals incur taxes as income during retirement.
Eligibility: Entrepreneurs operating a solo business or with a small staff of under five may establish an individual defined benefit plan, but it's generally recommended for people above age 50 who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans are:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% with plans to contribute more
- Businesses with proven consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The cap on contributions is calculated by an actuary using your financial situation, age, and savings targets. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Buffalo, NY for Your Self-Employed Retirement Plan
Partnering with an advisor in Buffalo, NY experienced with retirement plans for the self-employed is an essential partner for entrepreneurs. They have the expertise to help navigate the complexities of retirement planning and develop a tailored strategy that matches your objectives. An expert in your area will assess where you stand financially, determine how much risk you’re comfortable with, and guide you in selecting the best options about saving and investing for retirement. Included in what we do for you includes:
- Help you choose a plan that best fits your needs and goals
- Tailor the plan to fit you personally even further
- Adopt a written plan as required by IRS rules
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Review and modify your plan to keep it aligned with your goals
- Provide ongoing education and advice throughout your retirement planning process
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Buffalo, NY: Correct Capital's Process
Buffalo, NY business owners who aren’t equipped with the time or understanding to manage their retirement savings strategy themselves often feel overwhelmed as they look at their choices. With Correct Capital, our Buffalo, NY financial advisors handle the majority of your retirement strategy for you, to help make meeting your future savings targets 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 a good fit for you and your business. This short conversation helps us get a sense of your goals with no obligation or extensive time commitment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including your employee count, your current financial situation, and your long-term savings targets. This enables us to craft a personalized strategy that aligns with your goals.
- Review Your Plan: When we finalize 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 explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can start saving. Throughout our relationship, we'll have regular meetings and monitor your plan to keep it tailored to your evolving circumstances.
Our Buffalo, NY financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are legally and ethically bound to do what's in your best interest.
Other financial advisory services we offer in Buffalo, NY 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 Buffalo, NY
You don't see your business as "just a business", and your Buffalo, NY financial advisors should provide more than simply sound financial advice. At Correct Capital, we make it a priority to understand our clients and their businesses to provide tailored self-employed retirement plans. We offer all our Buffalo, NY clients our I.O.U. promise: all of the advice you get from us 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.
