Self-employed retirement plans Chandler, AZ. The independence of being your own boss in Chandler, AZ is one of the greatest advantages of working for yourself. Even so, this freedom often comes with certain challenges, particularly regarding planning for retirement, because you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off understanding their retirement options. In addition to enjoying a more comfortable retirement, seeking advice from a financial advisor in Chandler, AZ to create your self-employed retirement plan can provide significant tax advantages that allow your business to grow and succeed.
Few Chandler, AZ wealth management and retirement planning firms truly grasp the challenges faced by entrepreneurs quite like Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (check out our story here), and our firm are deeply experienced in supporting entrepreneurs with their retirement planning needs. We recognize that your goals for your business and retirement go far beyond just monetary concerns, and we are dedicated to create tailored solutions aligned with your vision. Keep reading to learn more about your self-employed retirement plan options in Chandler, AZ, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Chandler, AZ today.
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Why Chandler, AZ 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 real benefits today. Offering flexibility in contributions to considerable tax savings, working with a financial advisor in Chandler, AZ allows you to customize your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income from year to year, a plan like a SEP IRA or Solo 401(k) gives you the freedom to adjust how much you save:
- Customizable Contributions: Save extra during profitable years and cut back when your earnings dip, so that your plan fits your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw tax-free later—a smart decision if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Plans designed for the self-employed offer significant 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: Your savings grow untaxed until withdrawn, giving your money more time to compound.
- State-Specific Incentives: Based on your location, you might access additional deductions as a self-employed individual. These local incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax 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 determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across different stocks, bonds, and other assets can help reduce risk while continuing to build your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business helps you avoid using your retirement funds during financial hardships and incurring penalties.
Plan for the Future of Your Chandler, AZ Business
Retirement planning can assist you prepare for what’s next with your Chandler, AZ business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and won’t be included in the sale. These plans can provide the reliable income you’ll need during retirement. Remember that while selling your business results in a capital gain, contributions to retirement accounts 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, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you might face 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 who specializes in succession planning and retirement accounts to minimize tax burdens during the sale.
With the best-fit retirement strategy, you can take control of your financial future, cut down your tax obligations, and create a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Chandler, AZ Now?
Time remains one of the most important factors for building your retirement fund. Starting early not only helps you grow a more substantial retirement fund but also minimizes the stress of playing catch-up as you get older. Here’s why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement can have a significant impact on the total you’ll have when you reach retirement age. The main reason is compound interest—the powerful process where your investments grow, and those returns, then, earn even more returns. The greater time span your money has to grow, the larger the impact of this growth.
Example: Alex and Taylor are both entrepreneurs. Both of them want 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 make up for lost time.
By age 65, with an assumption of 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor invests $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time can lead to significant growth. Consider this example showing the impact of compounding:
- Starting at age 25: If you invest $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: Contributing the same $200 per month leaves you with only $235,412.97* by age 65—a gap 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 numbers shown in this scenario are based on estimates derived from NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are meant to provide general guidance and do not guarantee future performance. Outcomes may change depending on elements like market conditions, fees, and personal factors. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in Chandler, AZ, it can be tempting to prioritize reinvesting in your business instead of saving for retirement. That said, beginning a plan now enables you to:
- Benefit from growth that is tax-deferred or withdrawals without taxes later on.
- Take advantage of adjustable savings that adapt to your income.
- Establish a financial cushion that provides security, no matter how your business develops.
Getting started now, the less you’ll need to worry about playing catch-up later in life. Building your retirement savings today means managing your financial future and allowing yourself the ability to concentrate on your goals—both for your retirement years and your Chandler, AZ business.
Types of Self-Employed Retirement Plans
There are several retirement savings options available for those working for themselves in Chandler, AZ, each with its own pros and cons. A financial advisor is available to help you learn about the benefits and drawbacks of each choice and determine the one ideal for your unique situation. In most cases, your self-employed retirement plan options in Chandler, AZ consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that offer specific tax advantages. In a conventional IRA, the money you contribute is often tax-deductible, and earnings grow without immediate taxation, but money taken out during retirement are taxable. In contrast, with Roth IRAs, you contribute using income already taxed, but qualified withdrawals in retirement, including earnings, are not taxed. In both cases, 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 a source of 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 offers a way to save for retirement that enables entrepreneurs to save a percentage of their net business profits. Contributions must come from an employer, so, as a sole proprietor, you (the employee) would not be able to contribute above the 25% you (the employer) allocate. If you have employees, you must 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. SEP IRAs may be ideal for entrepreneurs facing fluctuating revenue streams. In contrast to some alternatives, SEP IRAs lack 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 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
If you’re self-employed, the amount eligible to be contributed 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 self-employed retirement plan designed 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 allow you to contribute as both an employee or an employer with pre-tax money. This offers more savings compared to SEPs or IRAs; however, the increased savings potential often come with more constrained investment avenues. Using a solo 401(k), you can make either traditional or Roth deferrals, which offer 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: As a self-employed individual with a solo 401(k) plan, you can make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, capped at the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 for those aged 50 and above, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) cannot exceed 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.
The total contribution cannot exceed $70,000, or $77,500 if you're over age 50 (for 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 self-employed individuals upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but allows self-employed individuals to know exactly how much they'll receive in retirement. This strategy is best suited for high-earning self-employed individuals who are focused on saving a substantial amount for retirement and can commit to making sizeable contributions. Contributions offer tax-deferred growth, and withdrawals incur taxes as income in 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 typically advised for those over 50 who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans include:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Businesses currently investing 3-4% with plans to contribute more
- Organizations 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 is calculated by an actuary using your earnings, age, and retirement objectives. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Chandler, AZ for Your Self-Employed Retirement Plan
A financial advisor in Chandler, AZ focused on self-employed retirement strategies serves as an essential partner for those working for themselves. They bring the skills needed to understand the intricacies of saving for retirement and design a customized plan that reflects your aspirations. A financial advisor in Chandler, AZ will evaluate your financial situation, determine how much risk you’re comfortable with, and assist you in making informed decisions about saving and investing for retirement. A key part of what we do for you includes:
- Help you choose a plan that best fits your needs and goals
- Further adapt the plan to fit you personally even further
- Adopt 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 when necessary
- Provide ongoing education and advice to help you navigate your retirement journey
- Maximize what you receive in retirement by making the most of your social security
Self-Employed Retirement Plans in Chandler, AZ: Correct Capital's Process
Chandler, AZ business owners who aren’t equipped with the time or understanding to handle their own retirement planning independently may end up overwhelmed as they look at their available plans. With Correct Capital, our Chandler, AZ financial advisors take on the bulk of your retirement strategy for you, and strive to ensure meeting your future savings targets as easy 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 will assess if our services align for you and your business. This short conversation allows us to get a sense of your goals with zero commitment or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including whether you have employees, your existing financial picture, and your long-term savings targets. This allows us to put together a custom plan designed just for you.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll schedule a meeting and go over your plan step by step to help you fully grasp it and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can start saving. Over the course of our partnership, we'll have regular meetings and monitor your plan to make sure it remains aligned with your goals.
Our Chandler, AZ financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Chandler, AZ 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 Chandler, AZ
You don't see your business as "just a business", and your Chandler, AZ financial advisors need to offer more than just good financial guidance. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to provide tailored self-employed retirement plans. We offer all our Chandler, AZ clients our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To get started on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
