Self-employed retirement plans Charlotte, NC. The freedom of being your own boss in Charlotte, NC is one of the greatest advantages of being self-employed. That said, this freedom can come with a lack of security, particularly regarding planning for retirement, since you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off looking into other possibilities. In addition to enjoying a financially stable retirement, working with a financial advisor in Charlotte, NC to set up your self-employed retirement plan offers significant tax advantages that allow your business to grow and succeed.
Few Charlotte, NC wealth management and retirement planning firms are as attuned to the requirements of small business owners as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (read more of our story here), and Correct Capital take pride in helping businesses with their retirement planning needs. We know that your professional and personal aspirations extend well past simple financial figures, and we strive to offer customized solutions that reflect your objectives. Keep reading to learn more 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 talk to 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 deliver immediate benefits today. From flexible contributions to significant tax savings, consulting a financial advisor in Charlotte, NC allows you to customize your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) offers the flexibility to tailor how much you save:
- Customizable Contributions: Set aside more during high-income years and cut back when revenues are down, so your plan works with your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw tax-free later—a smart decision if you expect your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, so you can keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to grow.
- State-Specific Incentives: Depending on where you live, you might access additional credits as a sole proprietor. These state-level incentives make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements 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 goes beyond just how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across varied stocks, bonds, and other assets is a smart way to mitigate financial risk while continuing to build your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business helps you avoid dipping into savings during financial hardships and facing tax penalties.
Plan for the Future of Your Charlotte, NC Business
Preparing for retirement can assist you think through what’s next with your Charlotte, NC business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and don’t transfer with the business. These plans can provide the reliable income you’ll need during retirement. Remember that while selling your business results in a capital gain, deposits into these plans are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or up to $70,000 for Solo 401(k)s, factoring in catch-up contributions, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you are required to pay when you sell your business.
- Succession Planning: For those winding down or handing over their business, your nest egg offer the funds you need as you make this shift. You may also work with a financial advisor with expertise in succession and retirement planning to help with taxes during the sale.
With the best-fit retirement strategy, you manage 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 Charlotte, NC Now?
Time is one of the most crucial factors for building your retirement fund. Getting a head start not only lets you accumulate a larger nest egg but also reduces the financial burden of catching up later in life. The following are reasons why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement can have a major impact on the total you’ll have when you reach retirement age. The main reason is compound interest—the powerful process where your investments earn returns, and those returns, in turn, accumulate even more returns. The longer your money has to grow, the larger the effect of this compounding process.
Example: Alex and Taylor are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex begins contributing $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 contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently can lead to impressive growth. Here’s a simple scenario showing the power of consistent growth:
- 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: 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.
Starting sooner, the less effort required each year to achieve your retirement goals.
*The figures provided in this example represent estimates derived from NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. The scenarios provided are intended as illustrative examples and are not a promise of future results. Your individual results may differ depending on factors such as 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 Charlotte, NC, it can be tempting to prioritize reinvesting in your business over saving for retirement. That said, initiating a plan now gives you the chance to:
- Take advantage of tax-free future growth or tax-free withdrawals later on.
- Benefit from adjustable savings that adapt to your earnings.
- Create a financial cushion that ensures stability, no matter how your business develops.
Starting early, the less you’ll need to worry about catching up later in life. Taking steps toward your retirement goals today means taking control of your financial future and allowing yourself the opportunity to turn your attention to your dreams—both for your golden years and your Charlotte, NC business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for entrepreneurs in Charlotte, NC, each offering its own advantages and considerations. A financial advisor can help you evaluate the benefits and drawbacks of each option and determine the one best suited for your needs. In most cases, your self-employed retirement plan options in Charlotte, NC include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that provide key tax perks. In a conventional IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but withdrawals in retirement are taxed as income. In contrast, Roth IRAs require contributions from post-tax earnings, but eligible distributions during retirement, including earnings, are not taxed. In both types of accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, IRAs, including traditional and Roth options are accessible for individuals with taxable earnings.
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 serves as a retirement savings option that permits entrepreneurs to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a independent business owner, you (the employee) cannot make additional contributions beyond 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. You may choose to contribute a fixed dollar figure or a percentage of wages to employee accounts. This type of plan may be ideal for companies with cycles of high revenue and low revenue. In contrast to some alternatives, 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 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: Solo 401(k)s, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed intended for businesses without employees or if the only employee is your spouse. These plans are similar to employer-sponsored 401(k) plans, and allow you to contribute as both an employer and an employee with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the additional opportunities may be offset by more restricted investment choices. 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: For self-employed individuals 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-employed earnings, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for individuals aged 50+ (for 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 provides a pre-established payout to entrepreneurs upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but enables participants to determine exactly how much they'll receive in retirement. This plan is ideal for high-earning professionals who aim to accumulate a substantial amount for retirement and can commit to making sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income upon 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 generally advised for individuals aged 50+ who earn at least $250,000 a year. Generally, good candidates for defined benefit plans tend to be:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Businesses currently investing 3-4% but are open to increasing contributions
- Organizations showing consistent profit patterns
- Entrepreneurs over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The contribution limit requires calculation from an actuary using your earnings, age, and retirement objectives. Limits on 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 specialized in self-employed retirement plans can be an important asset for those working for themselves. They bring the skills needed to guide you through the challenges of retirement planning and design a customized plan that reflects your aspirations. An expert in your area will evaluate your financial situation, identify your risk preferences, and assist you in choosing wisely about saving and investing for retirement. Included in what we do for you features:
- Help you choose a plan that best fits your needs and goals
- Further adapt the plan to fit you personally even further
- Create a written plan 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
- Offer continued financial education and guidance 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 Charlotte, NC: Correct Capital's Process
Charlotte, NC business owners who don’t have the time or expertise to manage their retirement savings strategy independently often feel overwhelmed by their options. At Correct Capital, our Charlotte, NC financial advisors manage the lion's share of your retirement strategy for you, to help make meeting your financial objectives 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: In just 20 minutes, a member of our advisor team will assess if our services align for you and your business. This brief introduction allows us to 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 gather information, including how many employees you have (if any), your current financial situation, and your retirement goals. This allows us to put together a personalized strategy designed just for you.
- Review Your Plan: After we put together a plan using the information you provide, we'll meet with you and go over your plan thoroughly to ensure you understand it 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 begin contributing. Throughout our relationship, we'll check in and review your strategy 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 act in your best interest.
Other financial advisory services we offer in Charlotte, 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 Charlotte, NC
Your business isn't "just a business" to you, and your Charlotte, NC financial advisors must deliver more than basic financial recommendations. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to create personalized self-employed retirement plans. To every client in Charlotte, NC, we provide 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.
