Self-employed retirement plans Cape Coral, FL. The freedom of running your own company in Cape Coral, FL is one of the best aspects of being self-employed. Even so, this freedom can come with certain challenges, especially in terms of retirement savings, since you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off exploring their options. In addition to having a more secure retirement, seeking advice from a financial advisor in Cape Coral, FL to set up your self-employed retirement plan delivers significant tax advantages that help both you and your business to thrive.
Few Cape Coral, FL investment consulting and retirement planning firms understand the needs of small business owners as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (learn more about our story here), and we are deeply experienced in helping businesses with their retirement planning needs. We understand that your professional and personal aspirations extend well past simple financial figures, and we strive to create tailored solutions aligned with your vision. Keep reading to learn more about your self-employed retirement plan options in Cape Coral, FL, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a entrepreneurial financial advisor in Cape Coral, FL today.
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Why Cape Coral, FL Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver immediate benefits today. With customizable contribution options to substantial tax savings, consulting a financial advisor in Cape Coral, FL allows you to design your retirement plan to align with your unique financial situation.
Flexibility That Fits Your Income
If your income changes annually, a plan like a SEP IRA or Solo 401(k) gives you the freedom to adjust how much you save:
- Customizable Contributions: Contribute more during profitable years and scale back when your earnings dip, ensuring your plan aligns with your cash flow.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw without tax penalties in the future—a smart decision if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans deliver significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, allowing you to keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to grow.
- State-Specific Incentives: Depending on where you live, you might access state-specific credits as a business owner. These local incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals 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
Planning for a safe retirement isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across different stocks, bonds, and alternatives can help mitigate financial risk while still growing your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business prevents you from using your retirement funds during tough times and risking extra costs.
Plan for the Future of Your Cape Coral, FL Business
Preparing for retirement can assist you prepare for what’s next with your Cape Coral, FL business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain yours and don’t transfer with the business. These savings offer the financial stability you’ll need later on. Remember that while selling your business results in a capital gain, deposits into these plans are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you might face when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts provide the funds you need through the transition. You may also seek advice from a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens on the sale.
With the best-fit retirement strategy, you manage 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 Cape Coral, FL Now?
Time remains one of the most important resources in retirement planning. Starting early not only allows you to build a larger nest egg but also lowers the pressure of saving aggressively in the future. This is why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement may cause a major impact on the savings you’ll have when you stop working. The biggest reason is compound interest—the concept where your investments grow, and those returns, in turn, earn even more returns. The longer your money has to grow, the more significant the impact of this growth.
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 catch up.
By age 65, with an assumption of 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time can lead to substantial growth. Take a look at this scenario showing the power of compound interest:
- Starting at age 25: By investing $200 per month in a retirement plan with an projected return of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Saving the same $200 per month yields only $235,412.97* by age 65—a difference of over $260,000, just from a 10-year delay.
Saving early, the less you need to save each year to reach your retirement goals.
*These calculations are estimates calculated using NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. This information is meant to provide general guidance and cannot predict actual future outcomes. Actual results may vary due to variables including market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in Cape Coral, FL, it can be tempting to put more emphasis on reinvesting in your business instead of saving for retirement. However, initiating a plan now enables you to:
- Take advantage of tax-free future growth or withdrawals without taxes later on.
- Enjoy adjustable savings that align with your cash flow.
- Create a financial cushion that provides security, 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 allowing yourself the freedom to turn your attention to your goals—both for your future retirement and your Cape Coral, FL business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for entrepreneurs in Cape Coral, FL, each providing its own benefits and trade-offs. A financial advisor can help you understand the pros and cons of each plan and identify the one most suitable for your needs. Generally speaking, your self-employed retirement plan options in Cape Coral, FL include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that provide key tax perks. In a traditional IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but money taken out during retirement are subject to income tax. In contrast, with Roth IRAs, you contribute are made with after-tax income, but eligible distributions during retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, both 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 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs offers a way to save for retirement that allows self-employed individuals to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) cannot make additional contributions above 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 have the flexibility to contribute a flat-dollar amount or a percentage of wages to employee accounts. SEP IRAs works well for businesses that experience periods of inconsistent earnings. Unlike other plans, SEP IRAs are free of the high fees associated with starting or maintaining other plans.
SEPs function like standard IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed can set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 25% of compensation, or
- $70,000 for 2025
For self-employed individuals, the contribution you can make 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 retirement savings plan meant for businesses without employees or if the only employee is your spouse. Solo 401(k)s operate much like standard 401(k) plans, and allow you to contribute as both an employer and an employee with pre-tax money. This provides more savings versus SEPs or IRAs; however, the increased savings potential may be offset by more restricted investment choices. In a solo 401(k) plan, 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 can set up and contribute to a solo 401(k).
Contribution Limits: For self-employed individuals with a solo 401(k) plan, you are allowed to make two types of contributions:
- Employee contributions of up to 100% of your self-employment income, up to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) must not surpass 25% of your adjusted self-employment income, which is defined as 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 individuals aged 50+ (as of 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that guarantees a fixed, predetermined benefit to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but lets individuals clearly understand the precise amount they'll receive in retirement. This option is recommended for wealthier self-employed individuals who want to save a substantial amount for retirement and are willing to make sizeable contributions. Contributions offer tax-deferred growth, and withdrawals incur taxes 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 advised for individuals aged 50+ who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans include:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% with plans to contribute more
- Businesses showing consistent profit patterns
- Entrepreneurs 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 financial situation, age, and savings targets. Allowable contributions are adjusted each year.
The Importance of a Financial Advisor in Cape Coral, FL for Your Self-Employed Retirement Plan
Working with a financial advisor in Cape Coral, FL experienced with retirement plans for the self-employed can be an essential partner for self-employed individuals. They bring the skills needed to guide you through the challenges of retirement planning and design a tailored strategy that aligns with your goals. An expert in your area will review your finances, determine how much risk you’re comfortable with, and help you in making informed decisions about saving and investing for retirement. Part of what we do for you involves:
- Assist in selecting a plan that best fits your needs and goals
- Customize the plan to your needs even further
- Formalize a plan in writing as required by IRS rules
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Monitor and adjust your plan to keep it aligned with your goals
- Deliver continuous support and financial insights throughout your retirement planning process
- Boost your retirement earnings by optimizing your social security benefits
Self-Employed Retirement Plans in Cape Coral, FL: Correct Capital's Process
Cape Coral, FL business owners who aren’t equipped with the time or understanding to manage their own retirement planning themselves can become overwhelmed when faced with their options. Through our team at Correct Capital, our Cape Coral, FL financial advisors manage the bulk of your retirement planning 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 just four steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can determine if we're suited to your needs for you and your business. This short conversation helps us understand what you're looking for with no pressure or extensive time commitment on your part.
- Gather Information: Should we agree to proceed, we'll ask for information, including whether you have employees, your present financial standing, 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 using the information you provide, we'll meet with you and go over your plan step by step to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll put everything in place 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 Cape Coral, FL financial advisors and retirement plan consultants act as fiduciary advisors, which means they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Cape Coral, FL 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 Cape Coral, FL
Your business isn't "just a business" to you, and your Cape Coral, FL financial advisors must deliver more than basic financial recommendations. At 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 Cape Coral, FL 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, reach out to Correct Capital at 877-930-401k or contact us online.
