Self-employed retirement plans Chesapeake, VA. The flexibility of running your own company in Chesapeake, VA offers many benefits of being self-employed. That said, this independence often comes with certain challenges, especially regarding retirement savings, since you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off exploring their options. In addition to achieving a financially stable retirement, partnering with a financial advisor in Chesapeake, VA to create your self-employed retirement plan offers significant tax advantages that enable your business to grow and succeed.
Few Chesapeake, VA wealth management and retirement planning firms understand the needs of entrepreneurs as well as Correct Capital. Our founder's father was a small business owner himself (read more of our story here), and Correct Capital are deeply experienced in supporting entrepreneurs with their retirement planning needs. We recognize that your business and retirement aspirations go far beyond simple financial figures, and we are dedicated to offer tailored solutions that reflect your objectives. Keep reading to learn more about your self-employed retirement plan options in Chesapeake, VA, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Chesapeake, VA today.
Schedule a Meeting With an Advisor Today
Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
Schedule a 15-Minute Introductory Call
Why Chesapeake, VA 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 tangible benefits today. With customizable contribution options to significant tax savings, consulting a financial advisor in Chesapeake, VA allows you to create your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) provides the option to modify how much you save:
- Customizable Contributions: Set aside more during profitable years and cut back when revenues are down, so that your plan fits your current income.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw tax-free later—a wise move 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 SEP IRA reduce what you owe in taxes, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, providing your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for additional deductions as a sole proprietor. These regional incentives make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax credit of up to 50% of the first $2,000 put into a retirement plan, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure retirement requires more than how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Allocating your investments across different asset classes like stocks and bonds is a smart way to reduce risk while still growing your savings.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net prevents you from using your retirement funds during tough times and incurring penalties.
Plan for the Future of Your Chesapeake, VA Business
Retirement planning also helps you plan ahead for what’s next with your Chesapeake, VA business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and don’t transfer with the business. These plans offer the financial stability you’ll need in the future. Keep in mind that while selling your business results in a capital gain, retirement plan contributions are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or up to $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you might face when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement savings offer a stable foundation during the change. You may also seek advice from a financial advisor experienced in both succession and retirement strategies to reduce taxes during the sale.
With the best-fit retirement strategy, you can take control of your financial future, lower your tax bill, and build a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Chesapeake, VA Now?
Time is one of the most crucial factors for building your retirement fund. Beginning sooner rather than later not only lets you accumulate a larger nest egg but also lowers the stress of playing catch-up as you get older. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings can have a significant impact on the savings you’ll have when you stop working. The primary reason is compound interest—the powerful process where your investments generate earnings, and those returns, then, generate even more returns. The more time your money has to grow, the larger the effect of this compounding process.
Example: Alex and Taylor are both self-employed individuals. Their shared goal is 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 contributes $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time can lead to substantial growth. Take a look at this scenario showing the impact of compounding:
- Starting at age 25: If you invest $200 per month in a retirement plan with an average annual return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month would result in only $235,412.97* by age 65—a shortfall of over $260,000, simply due to a 10-year delay.
Saving early, the lower your annual savings needs each year to reach your retirement goals.
*The numbers shown in this scenario are estimates calculated using NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. The scenarios provided are for illustrative purposes only and do not guarantee future performance. Actual results may vary based on factors such as market conditions, fees, and individual circumstances. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Chesapeake, VA, it might seem easier to focus more on reinvesting in your business over saving for retirement. That said, starting a plan now gives you the chance to:
- Take advantage of tax-free future growth or tax-free withdrawals later on.
- Take advantage of flexible contributions that change with your income.
- Create a safety net that ensures stability, no matter how your business evolves.
The sooner you start, the less you’ll need to worry about playing catch-up later in life. Taking steps toward your retirement goals today means gaining control over your financial future and allowing yourself the opportunity to concentrate on your goals—both for your golden years and your Chesapeake, VA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for those working for themselves in Chesapeake, VA, each with its own pros and cons. A financial advisor is available to help you learn about the advantages and disadvantages of each choice and identify the one best suited for your unique situation. In most cases, your self-employed retirement plan options in Chesapeake, VA include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that offer 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, Roth IRA contributions using income already taxed, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both cases, withdrawals are penalty-free if 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 an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $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 is a retirement plan that permits entrepreneurs to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a sole proprietor, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) have designated. 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 fixed dollar figure or a percentage of wages to employee accounts. SEP IRAs is a good option for businesses that experience fluctuating revenue streams. In contrast to some alternatives, SEP IRAs don’t have costly startup or administrative fees.
SEPs operate like traditional IRAs, where the contributions are tax-deferred and money withdrawn is subject to income tax.
Eligibility: Any employer, including the self-employed can open 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
For self-employed individuals, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan meant for companies that have no employees or where the only employee is a spouse. These plans operate much like employer-sponsored 401(k) plans, and allow you to contribute as both an employer and an employee with pre-tax money. This offers more savings compared to SEPs or IRAs; however, the additional opportunities may be offset by more restricted investment choices. With this type of plan, you can make either traditional or Roth deferrals, which have 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 self-employment income, 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 those who turn 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) must not surpass 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
The total contribution cannot exceed $70,000, or $77,500 for individuals aged 50+ (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that provides a fixed, predetermined benefit to entrepreneurs upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but lets individuals clearly understand exactly how much they'll have in retirement. This strategy is ideal for higher-income professionals who are focused on saving a large amount for retirement and are prepared to contribute substantial contributions. Contributions are tax deferred, and withdrawals are taxed as income upon retirement.
Eligibility: Any self-employed individual operating a solo business or employing fewer than five people are eligible to open an individual defined benefit plan, but it's typically suggested for those over 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans tend to be:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% with plans to contribute more
- Businesses that have demonstrated consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The contribution limit is calculated by an actuary determined by your income, age, and retirement goals. Limits on contributions change annually.
The Importance of a Financial Advisor in Chesapeake, VA for Your Self-Employed Retirement Plan
Working with a financial advisor in Chesapeake, VA focused on self-employed retirement strategies is an invaluable resource for self-employed individuals. They offer the knowledge to assist navigate the complexities of retirement planning and design a tailored strategy that reflects your aspirations. A financial advisor in Chesapeake, VA will review your finances, identify your risk preferences, and assist you in selecting the best options about saving and investing for retirement. Part of what we do for you includes:
- Assist in selecting a plan that best fits your needs and goals
- Further adapt the plan to your needs even further
- Formalize a plan in writing in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Track and fine-tune your plan when necessary
- Deliver continuous support and financial insights as you continue on the road to retirement
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Chesapeake, VA: Correct Capital's Process
Chesapeake, VA business owners who aren’t equipped with the time or understanding to handle their retirement savings strategy themselves often feel overwhelmed as they look at their choices. At Correct Capital, our Chesapeake, VA financial advisors handle the majority of your retirement strategy for you, to help make meeting your retirement goals as hassle-free as possible for you. We will guide you in creating 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 can determine if we're suited to your needs for you and your business. This brief introduction allows us to understand what you're looking for with zero commitment or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including how many employees you have (if any), your existing financial picture, and your future objectives. This enables us to craft a custom plan that aligns with your goals.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll schedule a meeting and review your plan step by step to make sure it's clear and understand how it best correlates to your needs.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can begin contributing. Over the course of our partnership, we'll have regular meetings and review your strategy to ensure it stays suited to your needs.
Our Chesapeake, VA financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Chesapeake, VA 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 Chesapeake, VA
Your business isn't "just a business" to you, and your Chesapeake, VA financial advisors need to offer more than basic financial recommendations. At Correct Capital, we focus on building a relationship with our clients and their businesses to deliver customized self-employed retirement plans. We offer all our Chesapeake, VA clients our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To get started on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
