Self-employed retirement plans Cary, NC. The independence of owning your own business in Cary, NC offers many benefits of being self-employed. That said, this flexibility sometimes brings with a lack of security, particularly when it comes to retirement savings, as you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider understanding their retirement options. In addition to enjoying a more comfortable retirement, working with a financial advisor in Cary, NC to create your self-employed retirement plan can provide significant tax advantages that enable you to move your business forward.
Few Cary, NC investment consulting and retirement planning firms truly grasp the challenges faced by self-employed individuals better than Correct Capital. The father of our founder was a small business owner himself (check out our story here), and we have a rich history of assisting business owners in their retirement planning needs. We know that your business and retirement aspirations extend well past simple financial figures, and we are dedicated to offer tailored solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Cary, NC, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Cary, NC today.
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 tangible benefits today. With customizable contribution options to significant tax savings, consulting a financial advisor in Cary, NC helps you create your retirement plan to align with your unique financial situation.
Flexibility That Fits Your Income
For those with fluctuating income over time, a plan like a SEP IRA or Solo 401(k) provides the flexibility to modify how much you save:
- Customizable Contributions: Set aside more during successful years and reduce savings when income is lower, so your plan fits your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw your savings tax-free down the road—a wise move if you believe your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, so you can keep more of your income.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, giving your money more time to accumulate.
- State-Specific Incentives: Based on your location, you may be eligible for extra deductions as a self-employed individual. These regional incentives make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals 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
Planning for a safe retirement 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 asset classes like stocks and bonds serves to minimize exposure to risk while helping to grow your savings.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net helps you avoid dipping into savings during tough times and risking extra costs.
Plan for the Future of Your Cary, NC Business
Preparing for retirement also helps you prepare for what’s next with your Cary, NC business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and are not part of the sale. These plans offer the reliable income you’ll need in the future. Keep in mind that while the sale of a business usually creates a capital gain, contributions to retirement accounts are capped at annual limits (e.g., a maximum of $7,000 for IRAs or up to $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Using retirement contributions wisely can reduce the taxes you are required to pay when you pass on your business.
- Succession Planning: For those winding down or handing over their business, your nest egg offer the funds you need during the change. You might want to partner with a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens during the sale.
With the proper savings strategy, you can take control of your financial future, lower your tax bill, and build a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Cary, NC Now?
Time is one of the most valuable resources in retirement planning. Getting a head start not only helps you grow a bigger financial cushion but also lowers the pressure of saving aggressively in the future. The following are reasons why it is beneficial to start now:
The Cost of Waiting
Waiting to start your retirement fund may cause a significant impact on the total you’ll have when you stop working. The biggest reason is compound interest—the concept where your investments generate earnings, and those returns, then, generate even more returns. The greater time span your money has to grow, the larger the impact of this growth.
Example: Two individuals, Alex and Taylor 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 delays savings until age 40 but puts away $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex contributes $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 may result in impressive growth. Here’s a simple scenario showing the power of compound interest:
- Starting at age 25: By investing $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month leaves you with only $235,412.97* by age 65—a difference of over $260,000, simply due to a 10-year delay.
The earlier you begin, the less effort required each year to reach your retirement goals.
*The figures provided in this example are estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. These examples are meant to provide general guidance and are not a promise of future results. Outcomes may change due to variables including market conditions, fees, and personal factors. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
For self-employed individuals in Cary, NC, it can be tempting to put more emphasis on reinvesting in your business over saving for retirement. However, initiating a plan now allows you to:
- Leverage tax-free future growth or withdrawals without taxes in the future.
- Benefit from adjustable savings that change with your earnings.
- Create a safety net that ensures stability, no matter how your business changes.
Starting early, the less you’ll need to worry about catching up later in life. Saving for retirement now means managing your financial future and giving yourself the ability to concentrate on your objectives—both for your golden years and your Cary, NC business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for self-employed individuals in Cary, NC, each with its own pros and cons. A financial advisor can help you evaluate the advantages and disadvantages of each choice and identify the one best suited for your circumstances. Generally speaking, your self-employed retirement plan options in Cary, NC are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that include key tax perks. In a conventional IRA, the money you contribute is often tax-deductible, and earnings grow without immediate taxation, but withdrawals in retirement are taxable. In contrast, with Roth IRAs, you contribute are made with after-tax income, but qualified withdrawals in retirement, including earnings, are not taxed. In both types of accounts, withdrawals don’t incur penalties provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, 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 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs is a retirement plan that enables entrepreneurs to save a percentage of their net business profits. Contributions must come from an employer, so, as a independent business owner, you (the employee) are limited to contributions from the employer role above the 25% you (the employer) allocate. If you have employees, it's required to contribute the same amount for them as you do for yourself. It's your choice whether to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for companies with fluctuating revenue streams. Compared to other retirement options, SEP IRAs lack costly startup or administrative fees.
SEPs operate like traditional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 25% of compensation, or
- $70,000 for 2025
For self-employed individuals, 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 intended for companies that have no employees or if the only employee is your spouse. This type of plan are similar to employer-sponsored 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This offers more savings compared to SEPs or IRAs; however, the increased savings potential may be offset by more limited investment options. 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: This plan is exclusively for 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, 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.
- Contributions as an employer (as an employer) are limited to 25% of your adjusted self-employment income, which is your net profit minus half of your self-employment tax and the elective deferrals you made.
Total contributions are capped at $70,000, or $77,500 for those aged 50 and older (as of 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that guarantees a fixed, predetermined benefit to entrepreneurs upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but enables participants to determine what they'll have in retirement. This plan is recommended for wealthier self-employed individuals who are focused on saving a large amount for retirement and are willing to make sizeable contributions. Contributions offer tax-deferred growth, and withdrawals are taxable as income upon retirement.
Eligibility: Any self-employed individual running an owner-only business or with a small staff of under five may establish an individual defined benefit plan, but it's typically recommended for people above age 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans include:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% with plans to contribute more
- Companies with proven consistent profit patterns
- Business leaders over age 40 who aim to quickly build retirement savings 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. Limits on contributions change annually.
The Importance of a Financial Advisor in Cary, NC for Your Self-Employed Retirement Plan
Working with a financial advisor in Cary, NC specialized in self-employed retirement plans serves as an invaluable resource for those working for themselves. They bring the skills needed to navigate the complexities of retirement planning and design a personalized approach 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 selecting the best options about saving and investing for retirement. Included in what we do for you involves:
- Help you choose a plan that aligns with your objectives and circumstances
- Further adapt the plan to your specific situation even further
- Adopt a written plan in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Make sure 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
- Maximize what you receive in retirement by maximizing your social security benefits
Self-Employed Retirement Plans in Cary, NC: Correct Capital's Process
Entrepreneurs in Cary, NC who lack the time, interest, or knowledge to manage their own retirement planning themselves often feel overwhelmed by their available plans. Through our team at Correct Capital, our Cary, NC financial advisors handle the bulk of your retirement planning for you, to help make meeting your future savings targets as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can help understand if we're a good fit for you and your business. This initial call lets us understand what you're looking for with no obligation or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including your employee count, your existing financial picture, and your long-term savings targets. This helps us create a tailored approach that aligns with your goals.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll schedule a meeting and review your plan thoroughly to make sure it's clear and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can begin contributing. Throughout our relationship, we'll have regular meetings and track your progress to ensure it stays suited to your needs.
Our Cary, NC financial advisors and retirement plan consultants serve as 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:
- Financial Planning for Business Owners
- Comprehensive Financial Planning
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
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 should provide more than basic financial recommendations. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to deliver tailored self-employed retirement plans. We offer all our Cary, NC 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.
