Self-employed retirement plans Corona, CA. The flexibility of running your own company in Corona, CA is one of the greatest advantages of being self-employed. However, this flexibility sometimes brings with certain challenges, particularly in terms of retirement savings, as you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from looking into other possibilities. In addition to enjoying a more secure retirement, working with a financial advisor in Corona, CA to establish your self-employed retirement plan delivers significant tax advantages that allow your business to grow and succeed.
Few Corona, CA investment consulting and retirement planning firms understand the needs of self-employed individuals better than 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 supporting entrepreneurs with their retirement planning needs. We know 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 Corona, CA, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Corona, CA today.
Why Corona, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver immediate benefits today. With customizable contribution options to significant tax savings, working with a financial advisor in Corona, CA allows you to customize your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
If your income changes 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 successful years and cut back when your earnings dip, ensuring your plan works with your cash flow.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw tax-free later—an advantageous choice if you believe your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, helping you keep more of your earnings.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to compound.
- State-Specific Incentives: In some states, you could qualify for extra tax breaks as a sole proprietor. These local incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax 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
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 a mix of stocks, bonds, and alternatives serves to mitigate financial risk while still growing your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business helps you avoid using your retirement funds during financial hardships and risking extra costs.
Plan for the Future of Your Corona, CA Business
A thoughtful retirement strategy can assist you plan ahead for what’s next with your Corona, CA business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s stay in your name and are not part of the sale. These savings ensure the steady income you’ll need in the future. Remember that while selling a business often leads to a capital gain, retirement plan contributions are subject to yearly maximums (e.g., up to $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, including catch-up contributions, based on plan compensation).
- Minimizing Taxes: Using retirement contributions wisely can reduce the taxes you are required to pay when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg provide a stable foundation through the transition. You may also work with a financial advisor who specializes in succession planning and retirement accounts to reduce taxes during the sale.
With the proper savings strategy, you gain control over 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 Corona, CA Now?
Time is one of the most valuable factors in retirement planning. Starting early not only helps you grow a larger nest egg but also lowers the stress of playing catch-up as you get older. This is why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings can have a substantial impact on the savings you’ll have when you stop working. The primary reason is compound interest—the financial principle where your investments earn returns, and those returns, then, earn even more returns. The greater time span your money has to grow, the greater the impact of this growth.
Example: Taylor and Alex are both entrepreneurs. They each aim to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but contributes $7,500 annually to catch up.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions made consistently may result in impressive growth. Consider this example showing the power of compound interest:
- Starting at age 25: By investing $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 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.
*The numbers shown in this scenario are estimates derived from 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 are not a promise of future results. Your individual results may differ depending on variables including 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 Corona, CA, it can be tempting to focus more on reinvesting in your business over saving for retirement. That said, initiating a plan now enables you to:
- Leverage growth that is tax-deferred or tax-free withdrawals down the road.
- Enjoy adjustable savings that adapt to your income.
- Build a long-term safety measure that ensures stability, no matter how your business evolves.
Starting early, the less you’ll need to worry about catching up later in life. Taking steps toward your retirement goals today means managing your financial future and creating for yourself the opportunity to focus on your objectives—both for your golden years and your Corona, CA business.
Types of Self-Employed Retirement Plans
There are several retirement savings options available for self-employed individuals in Corona, CA, each offering its own pros and cons. A financial advisor is available to help you understand the benefits and drawbacks of each option and identify the one ideal for your unique situation. Generally speaking, your self-employed retirement plan options in Corona, CA consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that include specific tax advantages. In a standard IRA, contributions are typically tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are taxable. In contrast, Roth IRA contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are not taxed. In both cases, withdrawals are penalty-free provided you are at least 59½.
Eligibility: Unlike plans linked to your job, traditional and Roth IRAs are accessible for individuals with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA offers a way to save for retirement that permits entrepreneurs to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a sole proprietor, you (the employee) would not be able to contribute beyond the 25% you (the employer) allocate. If you have employees, you are obligated 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. SEP IRAs may be ideal for businesses that experience cycles of high revenue and low revenue. Unlike other plans, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs function like traditional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can set up 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 self-employed retirement plan designed for companies that have no employees or when the sole employee is your spouse. These plans operate much like standard 401(k) plans, and enable contributions as both an employee or an employer with pre-tax money. This offers more savings compared to SEPs or IRAs; however, the extra savings options can be balanced 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: This plan is exclusively for 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 are allowed to make two types of contributions:
- Employee contributions of up to 100% of your earned income from self-employment, subject to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 for those aged 50 and above, or $34,750 for those who turn 60-63 in 2025.
- Contributions as an employer (as an employer) must not surpass 25% of your net self-employment income, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
Total contributions are capped at $70,000, or $77,500 for those aged 50 and older (in 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that provides a pre-established payout to business owners upon retirement. As opposed to defined contribution plans, this plan is not influenced by market performance, but allows self-employed individuals to know exactly how much they'll receive in retirement. This plan is recommended for high-earning professionals who want to save a substantial amount for retirement and are prepared to contribute larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxed as income during retirement.
Eligibility: Self-employed professionals managing a one-person company or with a small staff of under five can open an individual defined benefit plan, but it's generally recommended for individuals aged 50+ who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans tend to be:
- Business owners or partners who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% with plans to contribute more
- Organizations that have demonstrated consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The cap on contributions must be determined by an actuary based on your earnings, age, and retirement objectives. Contribution limits change annually.
The Importance of a Financial Advisor in Corona, CA for Your Self-Employed Retirement Plan
Working with a financial advisor in Corona, CA experienced with retirement plans for the self-employed can be an invaluable resource for entrepreneurs. They offer the knowledge to assist navigate the complexities of retirement planning and design a tailored strategy that aligns with your goals. Your advisor in Corona, CA will evaluate your financial situation, determine how much risk you’re comfortable with, and help you in making informed decisions about saving and investing for retirement. A key part of what we do for you includes:
- Guide you in choosing a plan that suits your unique requirements
- Customize the plan to your specific situation even further
- Formalize a plan in writing in accordance with IRS guidelines
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Monitor and adjust your plan when necessary
- 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 Corona, CA: Correct Capital's Process
Corona, CA business owners who lack the time, interest, or knowledge to handle their retirement savings strategy on their own can become overwhelmed by their options. At Correct Capital, our Corona, CA financial advisors take on the majority of your retirement planning for you, working to 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 initial call lets us get a sense of your goals with zero commitment or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including your employee count, your current financial situation, and your retirement goals. This allows us to put together a personalized strategy that aligns with your goals.
- Review Your Plan: When we finalize a plan based on the information you provide, we'll schedule a meeting and review your plan step by step to help you fully grasp it and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed 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 Corona, CA financial advisors and retirement plan consultants are fiduciary advisors, meaning they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Corona, CA include:
- 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 Corona, CA
Your business isn't "just a business" to you, and your Corona, CA financial advisors should provide more than just good financial guidance. With Correct Capital, we focus on building a relationship with our clients and their businesses to provide personalized self-employed retirement plans. To every client in Corona, CA, we provide our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
