Self-employed retirement plans in Country Life Acres, MO. The flexibility involved with having your own business in Country Life Acres, MO is one of the great things about being self-employed. But more leeway can be accompanied by limited stability, especially in when it comes to saving for retirement, you don't have an employer who will set up a plan for you. Barely more than 10% of self-employed people have retirement plans they save with, but many would be better off exploring their options. In addition to setting you up for the retirement of your dreams, working with a financial advisor to set up your self-employed retirement plan in Country Life Acres, MO offers favorable tax incentives that can help you improve your bottom line.
Few financial advisory and retirement planning firms will understand the needs of the self-employed and small business owners as well as Correct Capital. In fact, we were inspired by a self-employed individual, our founder's father (you can discover more about our story here). We have a deep understanding that your business and retirement goals extend far beyond just profit, and we are committed to offering tailored plans that fit your goals. Read on to read more about your self-employed retirement plan options in Country Life Acres, MO, or call Correct Capital at 877-930-4015 or fill out our online form to speak to a small business financial advisor now.
Types of Self-Employed Retirement Plans
There are several retirement savings plans available for self-employed individuals, and which is best for you depends on your unique situation. A Country Life Acres, MO financial advisor can help you comprehend the pros and cons of each option and select the most suitable one for your specific needs. Generally, your self-employed retirement plan options in Country Life Acres, MO are comprised of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Arrangements, are investment accounts that offer specific tax advantages. If you deposit to a traditional IRA, deposits are deducted from your taxable income, and any gains on investments grow tax-deferred, but distributions in retirement are taxed as if it were income. On the other hand, Roth IRA deposits are made with money you've already paid taxes on, but you pay no taxes on withdrawals or investment gains. In both accounts, distributions are penalty-free as long as 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 2023, annual contribution limits for IRAs are $6,500, or $7,500 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA is a retirement plan that allows self-employed individuals to contribute a share of of the money they make from their self-employment. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) would not be able to contribute more than the 25% you (the employer) already contributed. If you have employees, you would have to contribute the same amount for them as you do for yourself. You may choose to contribute either a predetermined fixed dollar amount or a proportion of annual income to employee accounts. SEP IRAs may be an excellent self-employed retirement plan if your business experiences periods of variable income. SEP IRAs don't have expensive initial setup or administrative charges other retirement plans do.
SEPs work like traditional IRAs, where deposits are made with pre-tax money and withdrawals are taxed as income.
Eligibility: Self-employed individuals and any employer, can set up a simplified employee pension plan.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 25% of compensation, or
- $66,000
For the self-employed individual, the annual contribution limit is decided by a unique calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, also known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan for businesses with no employees or who only employ a spouse. Solo 401(k)s work in the same same way as employer-sponsored 401(k) plans, and you can add funds as an employee and on your own behalf as the employer. This offers increased savings opportunities than SEPs or IRAs, however the additional opportunities for saving are often offset by more limited investment options. In a one-participant 401(k) plan, you can make either traditional deferrals (with pre-tax money) or Roth deferrals (with after-tax money).
Eligibility: Only self-employed individuals and their spouses have access to solo 401(k)s.
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 a maximum of 100% of your earned income from self-employment, up to the annual contribution limit. In 2023, those limits are $22,500, or $30,000 if you are 50 or older.
- Employer profit-sharing contributions (as an employer) of a maximum of 25% of your net self-employment income, which is your net profit minus half of your self-employment tax and the elective deferrals you made.
On an annual basis, contributions cannot exceed $66,000, or $73,500 if you're over age 50 (in 2023).
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement plan that provides a a predetermined benefit to self-employed individuals after they've left the workforce. In contrast to 401(k)s or IRAs, a defined benefit plan doesn't fluctuate based on investment returns, but allows self-employed individuals to know exactly what they'll receive in retirement. This plan is ideal for high-earning self-employed individuals who want to save a a significant sum for retirement and are willing to make substantial contributions. Contributions are tax deferred and contributions are taxed as income in retirement.
Eligibility: Any self-employed individual who runs an owner-only business or has less than five employees can establish an individual defined benefit plan, but it's typically only recommended for those over 50 who earn well into the six figures. Typically, good candidates for defined benefit plans are:
- Partners or owners who desire to save more than $66,000 (or $73,500 over age 50)
- Companies already contributing 3-4% who are want to contribute more
- Companies who are sure of their profit patterns
- Partners or owners over age 40 who want to "catch up" or accelerate the retirement savings
Contribution Limits: The contribution limit is determined by an actuary based on your income, age, and retirement goals. Contribution limits change every year.
Why You Need a Financial Advisor for Your Self-Employed Retirement Plan in Country Life Acres, MO
A financial advisor in Country Life Acres, MO specialized in self-employed retirement plans can be an invaluable resource for self-employed individuals. They have the expertise to help you understand the intricacies of retirement planning and develop a personalized approach that gets you where you want to go. A financial planner will evaluate where your finances currently are, help you figure out your risk tolerance, and help you make smart decisions about saving and investing for retirement. Part of what we do for you includes:
- Help you choose a plan that best fits your needs and goals
- Personalize the plan to your needs even further
- Adopt a written plan that follows all IRS regulations
- Arrange a trust plan for assets
- Create a record keeping system
- Help you understand the plan's terms
- Monitor and adjust your plan as needed
- Offer continued financial education and support as long as you work with us
- Maximize your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Country Life Acres, MO: Correct Capital's Process
Country Life Acres, MO business owners without the time, interest, or knowledge to handle their self-employed retirement plan themselves can become burdened when looking at their options. At Correct Capital, our financial advisors handle the lion's share of your retirement planning for you, and attempt to make meeting your retirement goals as easy as possible for you. We can help you establish and maintain your self-employed retirement plan in four simple steps:
- Schedule a Call — We only need a brief 20-minute call for a member of our advisor team to know if we're the best firm to help you reach your goals. This short introduction allows us to understand your needs with no obligation for you.
- Gather Information — If we both decide to move forward, we'll request more info, including the number of employees in your business (if applicable), your current financial situation, and what kind of retirement you want to have. This allows us to put together a custom plan based entirely on type of advising you need.
- Review Your Plan — After we put together a plan based on the information you provide, we'll meet with you and go over your plan in detail to ensure it's what you were looking for.
- Implementation and Monitoring — Once we've agreed on your plan, we'll put everything in place so you can start saving. Throughout our relationship, we'll keep you up-to-date with how things are going and adjust your plan to ensure it stays suited to your needs.
Our financial advisors and retirement consultants are fiduciary advisors who are legally and ethically obligated to do what's best for you and only you. We pride ourselves in providing clear communication and high-quality service to help you attain your self-employed retirement goals.
Other services we offer in Country Life Acres, MO include:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
Call Correct Capital for Your Country Life Acres, MO Self-Employed Retirement Plan
Your business isn't "just a business" to you, and your Country Life Acres, MO financial advisors need to provide you with more than just sound financial advice. Correct Capital takes pride in getting to know our clients and their business to deliver personalized self-employed retirement plans. We offer all our Country Life Acres, MO clients the same I.O.U. promise: all of the advice we give you will be independent, objective, and unbiased. To get started on your self-employment retirement plan in Country Life Acres, MO, speak to a financial advisor today at 877-930-4015 or contact us online.
