Self-employed retirement plans Charlotte, NC. The flexibility of running your own company in Charlotte, NC offers many benefits of being self-employed. However, this independence can come with a lack of security, especially in terms of building your retirement fund, since you don't have access to a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off looking into other possibilities. In addition to achieving a more comfortable retirement, seeking advice from a financial advisor in Charlotte, NC to create your self-employed retirement plan can provide significant tax advantages that help both you and your business to thrive.
Few Charlotte, NC investment consulting and retirement planning firms understand the needs of entrepreneurs as well as Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and we have a rich history of supporting entrepreneurs with their retirement planning needs. We recognize that your business and retirement aspirations go far beyond basic numbers, and we are dedicated to create personalized solutions that reflect your objectives. Continue exploring to find out about your self-employed retirement plan options in Charlotte, NC, 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 Charlotte, NC today.
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Why Charlotte, 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 offer immediate benefits today. From flexible contributions to significant tax savings, consulting a financial advisor in Charlotte, NC enables you to design your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) provides the flexibility to adjust how much you save:
- Customizable Contributions: Contribute more during high-income years and cut back when your earnings dip, ensuring 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 wise move if you expect your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed provide powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, which gives your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for extra tax breaks as a sole proprietor. These state-level incentives help 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 put into a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure retirement isn’t only about how much you save—it’s also about how you invest:
- Diversified Portfolios: Distributing your investments across varied stocks, bonds, and other assets is a smart way to reduce risk while helping to grow your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund ensures you don’t using your retirement funds during tough times and incurring penalties.
Plan for the Future of Your Charlotte, NC Business
Preparing for retirement can assist you prepare for what’s next with your Charlotte, NC 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 savings can provide the reliable income you’ll need later on. Remember that while selling your business results in a capital gain, deposits into these plans are capped at annual limits (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, based on plan compensation).
- Minimizing Taxes: Making the most of retirement savings 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 provide financial security through the transition. You can also work with a financial advisor with expertise in succession and retirement planning to minimize tax burdens associated with the transaction.
With the best-fit retirement strategy, you manage your financial future, cut down your tax obligations, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Charlotte, NC Now?
Time is one of the most crucial assets when it comes to saving for retirement. Getting a head start not only lets you accumulate a more substantial retirement fund but also reduces the financial burden of playing catch-up as you get older. This is why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings may cause a substantial impact on the amount you’ll have when you stop working. The biggest reason is compound interest—the powerful process where your investments grow, and those returns, subsequently, earn even more returns. The more time your money has to grow, the more significant the effect of this growth.
Example: Alex and Taylor are both self-employed professionals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but saves $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently may result in impressive growth. Take a look at this scenario showing the impact of compound interest:
- Starting at age 25: If you invest $200 per month in a retirement plan with an average annual return of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month would result in only $235,412.97* by age 65—a gap of over $260,000, simply due to a 10-year delay.
The earlier you begin, the less you need to save each year to achieve your retirement goals.
*The numbers shown in this scenario are estimates generated with NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is intended as illustrative examples and are not a promise of future results. Outcomes may change due to elements like market conditions, fees, and individual circumstances. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
For self-employed individuals in Charlotte, NC, it can be tempting to prioritize reinvesting in your business rather than saving for retirement. That said, beginning a plan now allows you to:
- Leverage tax-free future growth or penalty-free withdrawals down the road.
- Take advantage of adjustable savings that change with your cash flow.
- Build a safety net that ensures stability, no matter how your business changes.
Getting started now, the less you’ll have to worry about making up for lost time later in life. Saving for retirement now means gaining control over your financial future and giving yourself the opportunity to turn your attention to your goals—both for your retirement years and your Charlotte, NC business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for those working for themselves in Charlotte, NC, each with its own benefits and trade-offs. A financial advisor will guide you to learn about the benefits and drawbacks of each choice and choose the one ideal for your unique situation. Generally speaking, your self-employed retirement plan options in Charlotte, NC include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that provide distinct tax benefits. In a conventional IRA, the money you contribute is often tax-deductible, and earnings grow without immediate taxation, but retirement distributions are taxable. In contrast, Roth IRA contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are tax-free. In both accounts, withdrawals don’t incur penalties as long as you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are available to anyone with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that allows entrepreneurs to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a independent business owner, you (the employee) would not be able to contribute more than the 25% you (the employer) have designated. 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 is a good option for companies with periods of inconsistent earnings. Compared to other retirement options, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs function like standard 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 set up 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
As a self-employed person, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan designed for businesses without employees or if the only employee is your spouse. These plans are similar to traditional employer-managed 401(k) plans, and let you make contributions as both the employer and the employee with pre-tax money. This allows for 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 share the same tax benefits as their IRA contribution counterparts.
Eligibility: Only 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:
- Employee contributions of up to 100% of your earned income from self-employment, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (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.
The total contribution cannot exceed $70,000, or $77,500 if you're over age 50 (in 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 fixed, predetermined benefit to business owners upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but lets individuals clearly understand the precise amount they'll get in retirement. This plan is best suited for wealthier self-employed individuals who want to save a large amount for retirement and are prepared to contribute substantial contributions. Contributions are tax deferred, and withdrawals are taxed as income during retirement.
Eligibility: Entrepreneurs running an owner-only business or employing fewer than five people are eligible to open an individual defined benefit plan, but it's most commonly advised for individuals aged 50+ who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans include:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% but are open to increasing contributions
- Businesses that have demonstrated consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The maximum allowable contribution is calculated by an actuary based on your earnings, age, and retirement objectives. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Charlotte, NC for Your Self-Employed Retirement Plan
A financial advisor in Charlotte, NC experienced with retirement plans for the self-employed serves as an essential partner for those working for themselves. They bring the skills needed to navigate the complexities of retirement planning and craft a personalized approach that reflects your aspirations. Your advisor in Charlotte, NC will assess where you stand financially, determine how much risk you’re comfortable with, and help you in choosing wisely about saving and investing for retirement. Included in what we do for you includes:
- Assist in selecting a plan that aligns with your objectives and circumstances
- Tailor the plan to fit you personally even further
- Adopt a written plan that complies with IRS regulations
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Track and fine-tune your plan as needed
- Provide ongoing education and advice as you continue on the road to retirement
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Charlotte, NC: Correct Capital's Process
Entrepreneurs in Charlotte, NC who don’t have the time or expertise to manage their self-employed retirement plan themselves can become overwhelmed when faced with their choices. Through our team at Correct Capital, our Charlotte, NC financial advisors take on the bulk of your retirement planning for you, working to make meeting your retirement goals as easy 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: It only takes 20 minutes, a member of our advisor team can help understand if we're suited to your needs for you and your business. This initial call helps us get a sense of your goals with no pressure or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll request information, including how many employees you have (if any), your current financial situation, and your future objectives. This enables us to craft a tailored approach suited specifically for your needs.
- Review Your Plan: When we finalize a plan based on the information you provide, we'll schedule a meeting and discuss your plan thoroughly to help you fully grasp it and understand how it best correlates to your needs.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can start saving. Throughout our relationship, we'll check in and monitor your plan to ensure it stays suited to your needs.
Our Charlotte, NC financial advisors and retirement plan consultants act as fiduciary advisors, which means they are legally and ethically bound to do what's in your best interest.
Other financial advisory services we offer in Charlotte, 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 Charlotte, NC
Your business isn't "just a business" to you, and your Charlotte, NC financial advisors need to offer more than just good financial guidance. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to deliver personalized self-employed retirement plans. To every client in Charlotte, NC, we provide 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.
