Self-employed retirement plans in Country Life Acres, MO. The flexibility involved with running your own business in Country Life Acres, MO is a wonderful advantage to being self-employed. But more leeway can come with uncertainty, especially in when it comes to building a retirement plan, employer-sponsored plans aren't an option. Only a fraction of self-employed individuals have retirement plans they save with, but many would be wise to explore their options. In addition to setting you up for the retirement of your dreams, partnering with a financial advisor to set up your self-employed retirement plan in Country Life Acres, MO offers favorable tax incentives that can help boost you and your business forward.
Only a handful of wealth management and retirement planning firms know what it's like to be self-employed or a small business owner than Correct Capital. Our founder's father was a small business owner himself (you can read more about our story on our website). We have a deep understanding that your business and retirement aspirations transcend spreadsheets and percentages, and we are committed to offering tailored plans that reflect 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 contact us online to speak to a member of our advisory team at your convenience.
What Self-Employed Retirement Plans Are There?
There are a few different retirement savings options that the self-employed can establish, and which is best for you depends on your unique situation. A Country Life Acres, MO financial advisor can help you understand the advantages and disadvantages of each option and opt for that works best for you. Typically, your self-employed retirement plan options in Country Life Acres, MO are comprised of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are investment accounts that allows you to set aside money for the future, with special tax considerations. If you deposit to a traditional IRA, contributions are typically tax-deductible, and any gains on investments grow tax-deferred, but distributions in retirement are liable to income tax. In contrast, Roth IRA deposits are made with after-tax income, but you pay no taxes on withdrawals or earnings. In both accounts, withdrawals are penalty-free 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 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 percentage of of their annual income from 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, they must receive the same amount you do. You can either 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 goes through fluctuating income periods. SEP IRAs don't have the high upfront costs or administrative expenses often associated with other retirement plans.
SEPs work like traditional IRAs, where payments are made with money you've yet to pay taxes on and withdrawals are taxed at your income at the time of withdrawal.
Eligibility: Self-employed individuals and any employer, can set up a SEP.
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 amount eligible to be contributed is based on a specific formula.
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 sole proprietors or those whose only employee is a spouse. Solo 401(k)s function about the same as employer-sponsored 401(k) plans, and you can make contributions as an employee and on your own behalf as the employer. This offers increased savings opportunities than some other retirement savings plans, however the possibility of greater retirement savings is often counterbalanced by more limited investment options. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which each feature the same tax benefits as their IRA contribution counterparts.
Eligibility: Only business owners and their spouses have access to individual 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 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) which cannot exceed up to 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 offers a an assured monthly figure to self-employed individuals after they've left the workforce. As opposed to 401(k)s or IRAs, a defined benefit plan doesn't go up and down because of investment gains, but allows self-employed people to have an exact dollar figure as their income in retirement. This plan is best suited for high-earning self-employed individuals who want to save a a significant sum for retirement and want to add significant contributions. Contributions are tax deferred and withdrawals are taxed as income in retirement.
Eligibility: Any self-employed individual who runs a business with no employees besides the owner or has less than five employees can open an individual defined benefit plan, but it's typically only well-suited for those over 50 who earn at least $250,000 a year. Those interested in defined benefit plans tend to be:
- Partners or owners who want to contribute more than $66,000 (or $73,500 over age 50)
- Companies already contributing 3-4% who are willing to contribute more
- Companies who are sure of their profit patterns
- Partners or owners over age 40 who desire to make up for earlier years when they couldn't save as much
Contribution Limits: The contribution limit must be determined by an actuary based on your income, age, and retirement goals. Contribution limits change annually.
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 complexities of retirement planning and develop a customized plan that gets you where you want to go. A financial advisor will evaluate where your finances currently are, adjust for your risk tolerance, and guide you in making informed decisions about your financial future. Part of what we do for you includes:
- Help you choose a plan that best fits your needs and goals
- Customize the plan to your needs even further
- Adopt a written plan in accordance with IRS rules
- 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 who don't want to invest the time, interest, and skill set to manage their own self-employed retirement plan can become overwhelmed with the different plans available to them. At Correct Capital, our retirement consultants handle the bulk of the retirement planning work on your behalf, and strive to make achieving your business and retirement aspirations as easy as we possibly can. We can help you get set up with your self-employed retirement plan in a straightforward four-step process:
- Schedule a Call — We only need 20 minutes for one of our advisors to understand if we're the best firm to help you reach your goals. This brief introduction lets us understand what you're looking for with no major time investment for you.
- Gather Information — If we both decide to move forward, we'll ask for more info, including the number of employees in your business (if applicable), your current financial situation, and your retirement goals. This allows us to put together a custom plan based entirely on type of advising you need.
- Review Your Plan — Once we've compiled your plan, we'll meet with you and discuss the details of your plan to ensure it's what you were looking for.
- Implementation and Monitoring — Once we've started to move forward, we'll put everything in place so you can start saving. As long as we work together, we'll keep you up-to-date with how things are going and monitor your plan to ensure it stays suited to your needs.
Our financial advisors and retirement consultants are fiduciary advisors who are legally and morally bound to do what's best for you and only you. We are proud to provide clear communication and top-notch service to assist you achieve 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
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 merely sound financial advice. Correct Capital enjoys getting to know our clients and their business to deliver tailored self-employed retirement plans. We offer all our Country Life Acres, MO clients the same I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To get started on your self-employment retirement plan in Country Life Acres, MO, speak to a member of our team today at 877-930-4015 or fill out our online form.
