Self-employed retirement plans Cincinnati, OH. The independence of being your own boss in Cincinnati, OH offers many benefits of being self-employed. That said, this flexibility sometimes brings with a lack of security, especially regarding building your retirement fund, because you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from understanding their retirement options. In addition to achieving a financially stable retirement, working with a financial advisor in Cincinnati, OH to create your self-employed retirement plan delivers significant tax advantages that enable you to move your business forward.
Few Cincinnati, OH investment consulting 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 (learn more about our story here), and our firm have a rich history of supporting entrepreneurs with their retirement planning needs. We know that your professional and personal aspirations aren’t limited to basic numbers, and we work tirelessly to provide tailored solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Cincinnati, OH, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a self-employed financial advisor in Cincinnati, OH today.
Why Cincinnati, OH Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver tangible benefits today. Offering flexibility in contributions to significant tax savings, working with a financial advisor in Cincinnati, OH enables you to design your retirement plan to align with your individual circumstances.
Flexibility That Fits Your Income
For those with fluctuating income over time, a plan like a SEP IRA or Solo 401(k) provides the option to adjust how much you save:
- Customizable Contributions: Save extra during profitable years and reduce savings when revenues are down, so that your plan works with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw tax-free later—an advantageous choice if you believe your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, helping you keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to accumulate.
- State-Specific Incentives: In some states, you might access additional tax breaks as a self-employed individual. These local incentives make these plans even more advantageous.
- 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, 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 different asset classes like stocks and bonds serves to reduce risk while still growing your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business helps you avoid dipping into savings during tough times and incurring penalties.
Plan for the Future of Your Cincinnati, OH Business
Preparing for retirement can assist you prepare for what’s next with your Cincinnati, OH business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s stay in your name and don’t transfer with the business. These accounts ensure the reliable income you’ll need during retirement. Keep in mind that while the sale of a business usually creates a capital gain, retirement plan contributions are capped at annual limits (e.g., a maximum of $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you might face when you pass on your business.
- Succession Planning: If you’re passing the business on, your retirement savings offer financial security through the transition. 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 proper savings strategy, you manage your financial future, lower your tax bill, and establish a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Cincinnati, OH Now?
There’s no denying that time is one of the most important factors when it comes to saving for retirement. Getting a head start not only allows you to build a bigger financial cushion but also reduces the financial burden of saving aggressively in the future. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Waiting to start your retirement fund may cause a significant impact on the total you’ll have when you reach retirement age. The main reason is compound interest—the financial principle where your investments generate earnings, and those returns, in turn, earn even more returns. The longer your money has to grow, the more significant the impact of compounding.
Example: Taylor and Alex are both self-employed individuals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor waits until age 40 but puts away $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and achieves a total of $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 substantial growth. Here’s a simple scenario showing the effect of consistent growth:
- Starting at age 25: Putting aside $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 yields only $235,412.97* by age 65—a shortfall of over $260,000, just from a 10-year delay.
The earlier you begin, the less you need to save each year to reach your retirement goals.
*These calculations are 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. These examples are for illustrative purposes only and are not a promise of future results. Outcomes may change depending on elements like market conditions, fees, and individual circumstances. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Cincinnati, OH, it might seem easier to focus more on reinvesting in your business instead of saving for retirement. Even so, starting a plan now allows you to:
- Take advantage of growth that is tax-deferred or withdrawals without taxes in the future.
- Benefit from adjustable savings that adapt to your income.
- Create a safety net that ensures stability, no matter how your business changes.
Starting early, the less you’ll need to worry about catching up later in life. Saving for retirement now means gaining control over your financial future and creating for yourself the opportunity to turn your attention to your dreams—both for your retirement years and your Cincinnati, OH business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for entrepreneurs in Cincinnati, OH, each offering its own benefits and trade-offs. A financial advisor is available to help you evaluate the pros and cons of each option and identify the one ideal for your unique situation. Typically, your self-employed retirement plan options in Cincinnati, OH are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include key tax perks. In a standard IRA, the money you contribute is often tax-deductible, and earnings grow without immediate taxation, but money taken out during retirement are taxed as income. In contrast, with Roth IRAs, you contribute from post-tax earnings, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both types of accounts, withdrawals don’t incur penalties if you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, IRAs, including traditional and Roth options are open to those 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: SEP IRAs serves as a retirement savings option that enables self-employed individuals to set aside a portion of their self-employment income. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role above 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. It's your choice whether to contribute a fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA is a good option for entrepreneurs facing fluctuating revenue streams. Compared to other retirement options, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs operate like conventional 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 must not exceed:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed intended for businesses with no employees or when the sole employee is your spouse. This type of plan operate much like employer-sponsored 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the extra savings options can be balanced by more constrained investment avenues. 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: Solo 401(k)s are available solely to business owners and their spouses may establish 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-employed earnings, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your adjusted self-employment income, which is your net profit minus half of your self-employment tax and the deferrals you made.
Total contributions are capped at $70,000, or $77,500 if you're over age 50 (as of 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan represents a type of retirement plan that guarantees a fixed, predetermined benefit to business owners upon retirement. As opposed to defined contribution plans, a defined benefit plan doesn't fluctuate based on investment returns, but allows self-employed individuals to know the precise amount they'll receive in retirement. This option is ideal for wealthier entrepreneurs who aim to accumulate a substantial amount for retirement and are willing to make sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income during retirement.
Eligibility: Self-employed professionals operating a solo business or with a small staff of under five can open an individual defined benefit plan, but it's typically suggested for individuals aged 50+ who earn at least $250,000 a year. Typically, good candidates for defined benefit plans include:
- Partners or owners who want to invest more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% and are willing to do more
- Companies with proven consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The contribution limit requires calculation from an actuary based on your income, age, and retirement goals. Allowable contributions change annually.
The Importance of a Financial Advisor in Cincinnati, OH for Your Self-Employed Retirement Plan
Partnering with an advisor in Cincinnati, OH specialized in self-employed retirement plans can be an essential partner for those working for themselves. They offer the knowledge to assist guide you through the challenges of retirement planning and develop a personalized approach that matches your objectives. Your advisor in Cincinnati, OH will evaluate your financial situation, understand your risk tolerance, and help you in making informed decisions about saving and investing for retirement. A key part of what we do for you involves:
- Assist in selecting a plan that suits your unique requirements
- Tailor the plan to your specific situation even further
- Adopt a written plan that complies with IRS regulations
- Arrange a trust plan for assets
- 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 to help you navigate your retirement journey
- Boost your retirement earnings by making the most of your social security
Self-Employed Retirement Plans in Cincinnati, OH: Correct Capital's Process
Cincinnati, OH business owners who lack the time, interest, or knowledge to manage their own retirement planning independently often feel overwhelmed when faced with their options. At Correct Capital, our Cincinnati, OH financial advisors take on the lion's share of your retirement strategy for you, to help make meeting your financial objectives as easy as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: In just 20 minutes, a member of our advisor team can help understand if we're a good fit for you and your business. This initial call helps us learn about your needs with no obligation or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including your employee count, your existing financial picture, and your retirement goals. This helps us create a custom plan suited specifically for your needs.
- Review Your Plan: Once we've developed 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 explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll implement the necessary steps so you can start saving. As time goes on, we'll check in and monitor your plan to make sure it remains aligned with your goals.
Our Cincinnati, OH financial advisors and retirement plan consultants are fiduciary advisors, which means they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Cincinnati, OH 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 Cincinnati, OH
You don't see your business as "just a business", and your Cincinnati, OH financial advisors must deliver more than just good financial guidance. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to create customized self-employed retirement plans. We offer all our Cincinnati, OH clients our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To begin on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
