Self-employed retirement plans Cary, NC. The freedom of being your own boss in Cary, NC is one of the best aspects of working for yourself. However, this independence often comes with a lack of security, especially when it comes to planning for retirement, since you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from exploring their options. In addition to achieving a financially stable retirement, partnering with a financial advisor in Cary, NC to set up your self-employed retirement plan offers significant tax advantages that help you to move your business forward.
Few Cary, NC wealth management and retirement planning firms are as attuned to the requirements of entrepreneurs as well as 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 we take pride in assisting business owners in their retirement planning needs. We understand that your business and retirement aspirations aren’t limited to just monetary concerns, and we strive to provide personalized solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Cary, NC, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Cary, NC today.
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Why Cary, NC Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also provide immediate benefits today. Offering flexibility in contributions to substantial tax savings, consulting a financial advisor in Cary, NC allows you to design your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) offers the freedom to adjust how much you save:
- Customizable Contributions: Set aside more during successful years and scale back when revenues are down, so your plan aligns with your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw without tax penalties in the future—a wise move if you expect your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, so you can 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 grow.
- State-Specific Incentives: Based on your location, you could qualify for extra deductions as a sole proprietor. These state-level incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can apply for a credit of up to 50% of the first $2,000 contributed a retirement plan, helping to lower 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: Allocating your investments across different stocks, bonds, and other assets is a smart way to mitigate financial risk while still growing your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund helps you avoid dipping into savings during financial hardships and facing tax penalties.
Plan for the Future of Your Cary, NC Business
Retirement planning enables you to plan ahead for what’s next with your Cary, NC business:
- Selling Your Business: If you’re planning to sell, plans like SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These savings can provide the reliable income you’ll need during retirement. It’s important to note that while selling a business often leads to a capital gain, retirement plan contributions are capped at annual limits (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, based on plan compensation).
- Minimizing Taxes: Strategically planning your contributions helps lower 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 during the change. You may also work with a financial advisor experienced in both succession and retirement strategies to help with taxes associated with the transaction.
With the right retirement plan, you manage your financial future, reduce your tax burden, and build a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Cary, NC Now?
There’s no denying that time is one of the most important assets when it comes to saving for retirement. Beginning sooner rather than later not only allows you to build a more substantial retirement fund but also minimizes the pressure of playing catch-up as you get older. Here’s why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement could lead to a major impact on the total you’ll have when you stop working. The primary reason is compound interest—the powerful process where your investments earn returns, and those returns, in turn, generate even more returns. The greater time span your money has to grow, the larger the benefit of this growth.
Example: Two individuals, Alex and Taylor are both self-employed professionals. They each aim 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 contributes $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time often create significant growth. Here’s a simple scenario showing the effect of compounding:
- Starting at age 25: Putting aside $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: Contributing the same $200 per month would result in only $235,412.97* by age 65—a shortfall of over $260,000, just from a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to meet your retirement goals.
*The figures provided in this example represent estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is for illustrative purposes only and cannot predict actual future outcomes. Outcomes may change due to elements like market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Cary, NC, it can be tempting to focus more on reinvesting in your business rather than saving for retirement. However, initiating a plan now allows you to:
- Leverage tax-deferred growth or withdrawals without taxes later on.
- Benefit from contribution flexibility that change with your earnings.
- Create a long-term safety measure that offers peace of mind, no matter how your business changes.
Getting started now, the less you’ll have to worry about playing catch-up later in life. Taking steps toward your retirement goals today means gaining control over your financial future and giving yourself the freedom to turn your attention to your goals—both for your future retirement and your Cary, NC business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for those working for themselves in Cary, NC, each offering its own benefits and trade-offs. A financial advisor will guide you to understand the advantages and disadvantages of each option and choose the one most suitable for your circumstances. Generally speaking, your self-employed retirement plan options in Cary, NC are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that include specific tax advantages. In a standard IRA, the money you contribute is often tax-deductible, and investment earnings grow tax-deferred, but money taken out during retirement are taxable. In contrast, Roth IRA contributions are made with after-tax income, but retirement withdrawals that qualify, including earnings, are not taxed. In both types of accounts, withdrawals are penalty-free if you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are open to those with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA is a retirement plan that permits self-employed individuals to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a independent business owner, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) already contributed. If you have employees, you are obligated 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. SEP IRAs works well for entrepreneurs facing fluctuating revenue streams. Unlike other plans, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs operate like standard IRAs, where contributions are made with pre-tax money 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 capped at the lower of:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended 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 provides more savings compared to SEPs or IRAs; however, the additional opportunities often come with more limited investment options. 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: This plan is exclusively for 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 can make two types of contributions:
- Deferrals as an employee of up to 100% of your earned income from self-employment, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your net earnings from self-employment, which is calculated as net profits less half of your self-employment tax and the deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 if you're over age 50 (in 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that provides a set amount to business owners upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but enables participants to determine the precise amount they'll get in retirement. This plan is ideal for wealthier self-employed individuals who want to save a large amount for retirement and are prepared to contribute larger deposits. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income in retirement.
Eligibility: Entrepreneurs managing a one-person company or with less than five employees can open an individual defined benefit plan, but it's generally suggested for people above age 50 who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans include:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Organizations that already put in 3-4% with plans to contribute more
- Businesses that have demonstrated consistent profit patterns
- Partners or owners 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 income, age, and retirement goals. Allowable contributions are adjusted each year.
The Importance of a Financial Advisor in Cary, NC for Your Self-Employed Retirement Plan
Partnering with an advisor in Cary, NC specialized in self-employed retirement plans serves as an essential partner for those working for themselves. They offer the knowledge to assist understand the intricacies of saving for retirement and craft a customized plan that reflects your aspirations. A financial advisor in Cary, NC will review your finances, determine how much risk you’re comfortable with, and guide you in making informed decisions about saving and investing for retirement. Part of what we do for you features:
- Assist in selecting a plan that best fits your needs and goals
- Customize the plan to fit you personally even further
- Formalize a plan in writing that complies with IRS regulations
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan when necessary
- Provide ongoing education and advice as you continue on the road to retirement
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Cary, NC: Correct Capital's Process
Cary, NC business owners who don’t have the time or expertise to manage their own retirement planning on their own may end up overwhelmed by their available plans. At Correct Capital, our Cary, NC financial advisors take on the majority of your retirement strategy for you, working to make 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 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 suited to your needs for you and your business. This initial call allows us to get a sense of your goals with zero commitment or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including whether you have employees, your existing financial picture, and your future objectives. This allows us to put together a custom plan designed just for you.
- Review Your Plan: When we finalize a plan using the information you provide, we'll sit down with you and review your plan thoroughly 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 put everything in place so you can begin contributing. As time goes on, we'll meet with you and review your strategy to ensure it stays suited to your needs.
Our Cary, NC financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Cary, NC 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 Cary, NC
You don't see your business as "just a business", and your Cary, NC financial advisors must deliver 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 Cary, NC clients our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To get started on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
