Self-employed retirement plans Columbus, OH. The independence of being your own boss in Columbus, OH is one of the best aspects of being self-employed. However, this independence can come with potential drawbacks, especially when it comes to 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 would be better off looking into other possibilities. In addition to enjoying a more comfortable retirement, partnering with a financial advisor in Columbus, OH to set up your self-employed retirement plan can provide significant tax advantages that allow you to move your business forward.
Few Columbus, OH wealth management and retirement planning firms truly grasp the challenges faced by entrepreneurs 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 helping businesses with their retirement planning needs. We know that your professional and personal aspirations go far beyond just monetary concerns, and we strive to offer personalized solutions that reflect your objectives. Keep reading to learn more about your self-employed retirement plan options in Columbus, OH, or call Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Columbus, OH today.
Why Columbus, OH 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. With customizable contribution options to significant tax savings, consulting a financial advisor in Columbus, OH helps you design your retirement plan to align with your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) provides the freedom to modify how much you save:
- Customizable Contributions: Save extra during high-income years and scale back when your earnings dip, so that your plan aligns with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw without tax penalties in the future—an advantageous choice if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, helping you keep more of your income.
- 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: Depending on where you live, you may be eligible for state-specific credits as a self-employed individual. These local incentives can 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 they contribute a retirement plan, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure retirement goes beyond just how much you save—it’s also about how you invest:
- Diversified Portfolios: Distributing your investments across varied stocks, bonds, and other assets serves to mitigate financial risk while continuing to build your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net ensures you don’t dipping into savings during financial hardships and incurring penalties.
Plan for the Future of Your Columbus, OH Business
Preparing for retirement can assist you think through what’s next with your Columbus, OH business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These savings can provide the financial stability you’ll need during retirement. Remember that while selling your business results in a capital gain, deposits into these plans are capped at annual limits (e.g., up to $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Using retirement contributions wisely helps lower the taxes you might face when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings offer the funds you need as you make this shift. You may also partner with a financial advisor with expertise in succession and retirement planning to minimize tax burdens during the sale.
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 Columbus, OH Now?
Time remains one of the most valuable factors when it comes to saving for retirement. Starting early not only lets you accumulate a larger nest egg but also lowers the financial burden of saving aggressively in the future. This is why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings may cause a major impact on the total you’ll have when you retire. The primary reason is compound interest—the financial principle where your investments grow, and those returns, then, accumulate even more returns. The longer your money has to grow, the larger the benefit of this compounding process.
Example: Two individuals, Alex and Taylor are both self-employed individuals. They each aim 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 contributes $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments invested steadily 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 average annual return of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month leaves you with only $235,412.97* by age 65—a difference of over $260,000, simply due to a 10-year delay.
Saving early, the less effort required each year to reach your retirement goals.
*These calculations are based on estimates generated with NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. This information is intended as illustrative examples and cannot predict actual future outcomes. Actual results may vary based on elements like market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Columbus, OH, it can be tempting to put more emphasis on reinvesting in your business over saving for retirement. However, initiating a plan now enables you to:
- Benefit from growth that is tax-deferred or tax-free withdrawals in the future.
- Take advantage of flexible contributions that change with your cash flow.
- Build a financial cushion that provides security, no matter how your business evolves.
Starting early, the less you’ll be required to worry about playing catch-up later in life. Saving for retirement now means gaining control over your financial future and allowing yourself the ability to turn your attention to your objectives—both for your retirement years and your Columbus, OH business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for self-employed individuals in Columbus, OH, each with its own benefits and trade-offs. A financial advisor will guide you to evaluate the advantages and disadvantages of each option and choose the one most suitable for your circumstances. Typically, your self-employed retirement plan options in Columbus, OH include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that include key tax perks. In a conventional IRA, you can usually deduct your contributions from taxable income, and returns grow free of current taxes, but money taken out during retirement are taxable. In contrast, Roth IRA contributions are made with after-tax income, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both cases, 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, traditional and Roth IRAs are available to anyone with an earned 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 is a retirement plan that permits entrepreneurs to set aside a portion of their self-employment income. Contributions can only be made by an employer, so, as a independent business owner, you (the employee) cannot make additional contributions more than the 25% you (the employer) already contributed. If you have employees, you are obligated 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. This type of plan works well for entrepreneurs facing periods of inconsistent earnings. Compared to other retirement options, SEP IRAs lack costly startup or administrative fees.
SEPs function like standard IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed can set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan meant for businesses with no employees or if the only employee is your spouse. Solo 401(k)s function similarly to employer-sponsored 401(k) plans, and let you make contributions as both the employer and the employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the increased savings potential can be balanced by more limited investment options. In a solo 401(k) 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 are eligible to open and contribute to a solo 401(k).
Contribution Limits: If you are self-employed with a solo 401(k) plan, you can make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, capped at the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 for those aged 50 and above, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 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 for those aged 50 and older (as of 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 self-employed individuals upon retirement. As opposed to defined contribution plans, this plan is not influenced by market performance, but enables participants to determine what they'll get in retirement. This option is ideal for wealthier professionals who are focused on saving a large amount for retirement and are willing to make sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income during retirement.
Eligibility: Entrepreneurs running an owner-only business or employing fewer than five people may establish an individual defined benefit plan, but it's generally recommended for people above age 50 who make $250,000 or more annually. Typically, good candidates for defined benefit plans are:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% and are willing to do more
- Businesses with proven consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution is calculated by an actuary using your income, age, and retirement goals. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Columbus, OH for Your Self-Employed Retirement Plan
Working with a financial advisor in Columbus, OH focused on self-employed retirement strategies serves as an invaluable resource for entrepreneurs. They have the expertise to help navigate the complexities of retirement planning and develop a customized plan that reflects your aspirations. Your advisor in Columbus, OH will assess where you stand financially, 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 features:
- Help you choose a plan that aligns with your objectives and circumstances
- Customize the plan to fit you personally even further
- Formalize a plan in writing that complies with IRS regulations
- Organize a trust plan to manage your assets
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan as needed
- Deliver continuous support and financial insights to help you navigate your retirement journey
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Columbus, OH: Correct Capital's Process
Self-employed individuals in Columbus, OH who lack the time, interest, or knowledge to oversee their own retirement planning independently may end up overwhelmed as they look at their choices. With Correct Capital, our Columbus, OH financial advisors take on the lion's share of your savings plan setup for you, and strive to ensure meeting your future savings targets as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can help understand if we're a good fit for you and your business. This brief introduction allows us to understand what you're looking for with no obligation or extensive time commitment on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including whether you have employees, your present financial standing, and your retirement goals. This helps us create a tailored approach designed just for you.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll schedule a meeting and discuss your plan in detail to ensure you understand it and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can begin contributing. As time goes on, we'll have regular meetings and review your strategy to ensure it stays suited to your needs.
Our Columbus, OH financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Columbus, OH include:
- Family Wealth Planning
- 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
Call Correct Capital for Your Self-Employed Retirement Plan in Columbus, OH
Your business isn't "just a business" to you, and your Columbus, OH financial advisors need to offer 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 Columbus, OH, we provide our I.O.U. promise: all guidance we provide 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.
