Self-employed retirement plans Charlotte, NC. The flexibility of owning your own business in Charlotte, NC offers many benefits of being self-employed. However, this independence sometimes brings with certain challenges, notably regarding retirement savings, as you don't have access to a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off understanding their retirement options. In addition to enjoying a financially stable retirement, partnering with a financial advisor in Charlotte, NC to create your self-employed retirement plan offers significant tax advantages that help you to move your business forward.
Few Charlotte, NC financial advisory and retirement planning firms understand the needs of small business owners better than Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and our firm are deeply experienced in assisting business owners in their retirement planning needs. We recognize that your goals for your business and retirement aren’t limited to just monetary concerns, and we are dedicated to create tailored 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.
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 tangible benefits today. Offering flexibility in contributions to significant tax savings, working with a financial advisor in Charlotte, NC helps you customize your retirement plan to align with your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) gives you the option to tailor how much you save:
- Customizable Contributions: Save extra during high-income years and cut back when income is lower, so that your plan fits your cash flow.
- Roth Options: 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
Retirement plans for self-employed individuals provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, allowing you to keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to compound.
- State-Specific Incentives: Based on your location, you might access extra deductions as a sole proprietor. These local incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can claim a tax credit of up to 50% of the first $2,000 they contribute a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future goes beyond just how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Allocating your investments across a mix of stocks, bonds, and alternatives serves to reduce risk while still growing your savings.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business ensures you don’t tapping into your nest egg during financial hardships and facing tax penalties.
Plan for the Future of Your Charlotte, NC Business
A thoughtful retirement strategy can assist you think through what’s next with your Charlotte, NC business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain yours and don’t transfer with the business. These savings can provide the steady income you’ll need during retirement. Remember that while the sale of a business usually creates a capital gain, contributions to retirement accounts are subject to yearly maximums (e.g., as much as $7,000 for IRAs or up to $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you are required to pay when you transfer your business.
- Succession Planning: For those winding down or handing over their business, your nest egg ensure a stable foundation through the transition. You can also work with a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens on the sale.
With the best-fit retirement strategy, you gain control over 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 Charlotte, NC Now?
Time remains one of the most valuable resources for building your retirement fund. Getting a head start not only helps you grow a more substantial retirement fund but also reduces the pressure of catching up later in life. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement can have a substantial impact on the total you’ll have when you retire. The biggest reason is compound interest—the concept where your investments earn returns, and those returns, then, generate even more returns. The more time your money has to grow, the more significant the effect 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 initiates savings of $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but contributes $7,500 annually to catch up.
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
Even modest contributions made consistently can lead to significant growth. Take a look at this scenario showing the power of compound interest:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an projected 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 shortfall of over $260,000, just from a 10-year delay.
Saving early, the less you need to save each year to achieve your retirement goals.
*The numbers shown in this scenario are based on estimates generated with NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. This information is meant to provide general guidance and are not a promise of future results. Outcomes may change depending on factors such as market conditions, fees, and your unique situation. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Charlotte, NC, it can be tempting to focus more on reinvesting in your business over saving for retirement. However, starting a plan now enables you to:
- Take advantage of growth that is tax-deferred or tax-free withdrawals in the future.
- Benefit from flexible contributions that align with your earnings.
- Build a long-term safety measure that offers peace of mind, no matter how your business evolves.
Getting started now, the less you’ll have to worry about making up for lost time later in life. Building your retirement savings today means managing your financial future and creating for yourself the ability to turn your attention to your objectives—both for your golden years and your Charlotte, NC business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for self-employed individuals in Charlotte, NC, each offering its own benefits and trade-offs. A financial advisor can help you evaluate the advantages and disadvantages of each option and determine 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: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that include specific tax advantages. In a standard IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but withdrawals in retirement are taxable. In contrast, Roth IRAs require contributions using income already taxed, but eligible distributions during retirement, including earnings, are tax-free. In both cases, withdrawals come without penalties provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, both traditional and Roth IRAs are open to those with taxable earnings.
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: The Simplified Employee Pension IRA serves as a retirement savings option that permits those who are self-employed to save a percentage of their net business profits. Contributions must come from an employer, so, as a sole proprietor, you (the employee) are limited to contributions from the employer role above 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 flat-dollar amount or a percentage of wages to employee accounts. SEP IRAs may be ideal for entrepreneurs facing periods of inconsistent earnings. Compared to other retirement options, SEP IRAs lack costly startup or administrative fees.
SEPs work like traditional IRAs, where contributions are made with pre-tax money and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed can establish 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: A Solo 401(k) plan, also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed designed for businesses with no employees or if the only employee is your spouse. Solo 401(k)s operate much like traditional employer-managed 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This provides more savings than SEPs or IRAs; however, the additional opportunities can be balanced by more limited investment options. With this type of plan, 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: If you are self-employed with a solo 401(k) plan, you have the ability to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your self-employment income, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 if you attain age 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your net self-employment income, which is your net profit minus half of your self-employment tax and the employee contributions you made.
Your combined contributions must not surpass $70,000, or $77,500 for individuals aged 50+ (as of 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans offers a structured retirement solution that guarantees a set amount to business owners upon retirement. In contrast to the plans discussed earlier, a defined benefit plan doesn't fluctuate based on investment returns, but lets individuals clearly understand what they'll receive in retirement. This plan is best suited for higher-income entrepreneurs who want to save a significant sum for retirement and are prepared to contribute substantial contributions. Contributions offer tax-deferred growth, and withdrawals are taxed as income during retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees may establish an individual defined benefit plan, but it's generally recommended for individuals aged 50+ who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans are:
- Business owners or partners who want to invest more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% with plans to contribute more
- Organizations showing consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The maximum allowable contribution is calculated by an actuary using your income, age, and retirement goals. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Charlotte, NC for Your Self-Employed Retirement Plan
Partnering with an advisor in Charlotte, NC experienced with retirement plans for the self-employed is an invaluable resource for self-employed individuals. They bring the skills needed to understand the intricacies of saving for retirement and develop a personalized approach that aligns with your goals. An expert in your area will assess where you stand financially, understand your risk tolerance, and help you in choosing wisely about saving and investing for retirement. Included in what we do for you includes:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Customize the plan to your specific situation even further
- Adopt a written plan in accordance with IRS guidelines
- Set up an asset trust plan
- Help you understand the plan's terms
- Track and fine-tune your plan to keep it aligned with your goals
- Provide ongoing education and advice as you continue on the road to retirement
- Boost your retirement earnings by optimizing your social security benefits
Self-Employed Retirement Plans in Charlotte, NC: Correct Capital's Process
Entrepreneurs in Charlotte, NC who lack the time, interest, or knowledge to handle their retirement savings strategy independently may end up overwhelmed by their available plans. With Correct Capital, our Charlotte, NC financial advisors manage the majority of your retirement planning for you, working to make meeting your financial objectives as hassle-free as possible for you. We can help you get set up your self-employed retirement plan in just four steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if our services align for you and your business. This brief introduction lets us get a sense of your goals with zero commitment or significant effort on your part.
- Gather Information: Should we agree to proceed, we'll request information, including how many employees you have (if any), your existing financial picture, and your long-term savings targets. This allows us to put together a tailored approach designed just for you.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll schedule a meeting and discuss your plan in detail to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll put everything in place so you can initiate your savings journey. Throughout our relationship, we'll check in and monitor your plan to make sure it remains aligned with your goals.
Our Charlotte, NC financial advisors and retirement plan consultants are fiduciary advisors, which means they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Charlotte, NC include:
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 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
To you, your business is more than "just a business", and your Charlotte, NC financial advisors should provide more than simply sound financial advice. With Correct Capital, we focus on building a relationship with our clients and their businesses to create tailored self-employed retirement plans. We offer all our Charlotte, 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.
