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 independence can come with potential drawbacks, particularly in terms of retirement savings, since you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider looking into other possibilities. In addition to having a financially stable retirement, partnering with a financial advisor in Chandler, AZ to create your self-employed retirement plan delivers significant tax advantages that allow both you and your business to thrive.
Few Chandler, AZ financial advisory and retirement planning firms understand the needs of self-employed individuals better than Correct Capital. Our founder's father 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 recognize that your business and retirement aspirations go far beyond basic numbers, and we strive to create customized solutions to meet your unique goals. Read on to discover 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 consult with a small business financial advisor in Chandler, AZ today.
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 deliver immediate benefits today. Offering flexibility in contributions to significant tax savings, working with a financial advisor in Chandler, AZ allows you to design 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) provides the option to tailor how much you save:
- Customizable Contributions: Set aside more during profitable years and reduce savings when revenues are down, so your plan fits your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw tax-free later—a smart decision if you believe your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, allowing you to keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to accumulate.
- State-Specific Incentives: In some states, you might access additional credits as a sole proprietor. These local incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a 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 isn’t only about how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Spreading your investments across different asset classes like stocks and bonds can help mitigate financial risk while still growing your savings.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business helps you avoid dipping into savings during tough times and risking extra costs.
Plan for the Future of Your Chandler, AZ Business
A thoughtful retirement strategy also helps you prepare for what’s next with your Chandler, AZ business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s stay in your name and don’t transfer with the business. These plans can provide the financial stability you’ll need during retirement. Remember that while selling your business results in a capital gain, retirement plan contributions are subject to yearly maximums (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including 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 retirement accounts ensure the funds you need during the change. You can also work with a financial advisor who specializes in succession planning and retirement accounts to help with taxes on the sale.
With the best-fit retirement strategy, you manage 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 Chandler, AZ Now?
Time is one of the most important factors in retirement planning. Beginning sooner rather than later not only lets you accumulate a larger nest egg but also lowers the pressure of saving aggressively in the future. Here’s why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings may cause a major impact on the amount you’ll have when you stop working. The main reason is compound interest—the concept where your investments grow, and those returns, in turn, generate even more returns. The greater time span your money has to grow, the more significant the benefit of this growth.
Example: 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 waits until age 40 but saves $7,500 annually to make up for lost time.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments invested steadily can lead to significant growth. Here’s a simple scenario showing the effect of consistent growth:
- Starting at age 25: If you invest $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: Saving the same $200 per month would result in only $235,412.97* by age 65—a difference of over $260,000, simply due to a 10-year delay.
Saving early, the less effort required 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. Annual deposits were multiplied by the number of years to estimate total contributions. This information is meant to provide general guidance and do not guarantee future performance. Actual results may vary due to variables including market conditions, fees, and your unique situation. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
For self-employed individuals in Chandler, AZ, it can be tempting to put more emphasis on reinvesting in your business instead of saving for retirement. That said, starting a plan now gives you the chance to:
- Benefit from growth that is tax-deferred or penalty-free withdrawals in the future.
- Take advantage of flexible contributions that align with your cash flow.
- Create a safety net that offers peace of mind, no matter how your business changes.
Starting early, the less you’ll need to worry about making up for lost time later in life. Building your retirement savings today means gaining control over your financial future and creating for yourself the freedom to turn your attention to your dreams—both for your retirement years and your Chandler, AZ business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for self-employed individuals in Chandler, AZ, each with its own pros and cons. A financial advisor is available to help you understand the pros and cons of each choice and determine the one best suited for your needs. Generally speaking, your self-employed retirement plan options in Chandler, AZ consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that include key tax perks. In a standard IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but money taken out during retirement are subject to income tax. In contrast, with Roth IRAs, you contribute using income already taxed, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both accounts, withdrawals are penalty-free if you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are accessible for individuals 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 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 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 flat-dollar amount or a percentage of wages to employee accounts. SEP IRAs may be ideal for entrepreneurs facing cycles of high revenue and low revenue. Unlike other plans, SEP IRAs don’t have costly startup or administrative fees.
SEPs work like traditional IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
Eligibility: Employers of any type, including self-employed individuals can open 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 allowable contribution 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 when the sole employee is your spouse. Solo 401(k)s function similarly to standard 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the extra savings options may be offset by more restricted investment choices. With this type of plan, 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 can set up 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:
- Elective deferrals (as an employee) of up to 100% of your self-employed earnings, capped at the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 for those who turn 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your net self-employment income, which is calculated as net profits less 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 individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that guarantees a pre-established payout to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine what they'll have in retirement. This plan is recommended for higher-income self-employed individuals who aim to accumulate a substantial amount for retirement and can commit to making sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income upon retirement.
Eligibility: Entrepreneurs managing a one-person company or employing fewer than five people can open an individual defined benefit plan, but it's typically advised for individuals aged 50+ who make $250,000 or more annually. In most cases, good candidates for defined benefit plans tend to be:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% and are willing to do more
- Organizations that have demonstrated consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings 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 adjusted each year.
The Importance of a Financial Advisor in Chandler, AZ for Your Self-Employed Retirement Plan
Working with a financial advisor in Chandler, AZ focused on self-employed retirement strategies serves as an invaluable resource for self-employed individuals. They have the expertise to help navigate the complexities of retirement planning and develop a tailored strategy that reflects your aspirations. An expert in your area will evaluate your financial situation, understand your risk tolerance, and assist you in making informed decisions about saving and investing for retirement. A key part of what we do for you includes:
- Guide you in choosing a plan that suits your unique requirements
- Further adapt the plan to your specific situation 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 as needed
- Provide ongoing education and advice to help you navigate your retirement journey
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Chandler, AZ: Correct Capital's Process
Self-employed individuals in Chandler, AZ who don’t have the time or expertise to handle their retirement savings strategy on their own may end up overwhelmed as they look at their options. At Correct Capital, our Chandler, AZ financial advisors take on the majority of your retirement strategy for you, and strive to ensure meeting your future savings targets as easy as possible for you. We are here to assist you in setting 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 will assess if we're suited to your needs for you and your business. This short conversation allows us to 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 ask for information, including whether you have employees, your present financial standing, and your long-term savings targets. This allows us to put together a personalized strategy designed just for you.
- Review Your Plan: After we put together a plan based on the information you provide, we'll sit down with you and review your plan thoroughly to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can begin contributing. As time goes on, we'll check in and review your strategy to make sure it remains aligned with your goals.
Our Chandler, AZ financial advisors and retirement plan consultants act as fiduciary advisors, which means they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in Chandler, AZ 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 Chandler, AZ
To you, your business is more than "just a business", and your Chandler, AZ financial advisors need to offer more than basic financial recommendations. At Correct Capital, we make it a priority to understand our clients and their businesses to provide tailored self-employed retirement plans. All our clients in Chandler, AZ benefit from our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
