Self-employed retirement plans Dallas, TX. The freedom of owning your own business in Dallas, TX offers many benefits of having a self-directed career. Even so, this freedom sometimes brings with potential drawbacks, particularly in terms of building your retirement fund, since you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from looking into other possibilities. In addition to achieving a more secure retirement, seeking advice from a financial advisor in Dallas, TX to create your self-employed retirement plan offers significant tax advantages that enable both you and your business to thrive.
Few Dallas, TX wealth management and retirement planning firms understand the needs of self-employed individuals quite like Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (learn more about our story here), and we take pride in helping businesses with their retirement planning needs. We know that your business and retirement aspirations extend well past basic numbers, and we are dedicated to create tailored solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Dallas, TX, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Dallas, TX today.
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Why Dallas, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also provide real benefits today. From flexible contributions to considerable tax savings, working with a financial advisor in Dallas, TX helps you create your retirement plan to align with your individual circumstances.
Flexibility That Fits Your Income
If your income changes from year to year, a plan like a SEP IRA or Solo 401(k) offers the option to tailor how much you save:
- Customizable Contributions: Contribute more during successful years and reduce savings when your earnings dip, so that your plan aligns with your current income.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw without tax penalties in the future—a smart decision if you believe your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) lower your taxable income, so you can keep more of your earnings.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, which gives your money more time to grow.
- State-Specific Incentives: Based on your location, you may be eligible for state-specific tax breaks as a business owner. These regional incentives make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can claim a tax 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 isn’t only about how much you save—it’s also about how you invest:
- Diversified Portfolios: Spreading your investments across different asset classes like stocks and bonds serves to minimize exposure to risk while helping to grow your nest egg.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business helps you avoid dipping into savings during tough times and facing tax penalties.
Plan for the Future of Your Dallas, TX Business
Retirement planning can assist you plan ahead for what’s next with your Dallas, TX business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and don’t transfer with the business. These savings ensure the steady income you’ll need in the future. Keep in mind that while selling a business often leads to a capital gain, deposits into these plans are restricted by contribution limits (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you might face when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings ensure the funds you need as you make this shift. You can also seek advice from a financial advisor who specializes in succession planning and retirement accounts to help with taxes associated with the transaction.
With the best-fit retirement strategy, you gain control over your financial future, lower your tax bill, and create a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Dallas, TX Now?
There’s no denying that time is one of the most important assets in retirement planning. Beginning sooner rather than later not only allows you to build a bigger financial cushion but also reduces the financial burden of saving aggressively in the future. Here’s why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings may cause a major impact on the amount you’ll have when you reach retirement age. The biggest reason is compound interest—the financial principle where your investments generate earnings, and those returns, in turn, generate even more returns. The longer your money has to grow, the more significant the effect of this growth.
Example: Two individuals, Alex and Taylor are both self-employed professionals. They each aim to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but saves $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex invests $180,000 and achieves a total of $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time may result in substantial growth. Here’s a simple scenario 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: Contributing the same $200 per month leaves you with only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
The earlier you begin, the less effort required each year to reach your retirement goals.
*The figures provided in this example are estimates generated with NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is for illustrative purposes only and do not guarantee future performance. Your individual results may differ due to elements like market conditions, fees, and your unique situation. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Dallas, TX, it might seem easier to prioritize reinvesting in your business rather than saving for retirement. Even so, beginning a plan now gives you the chance to:
- Benefit from tax-free future growth or penalty-free withdrawals down the road.
- Enjoy contribution flexibility that align with your income.
- Establish a financial cushion that offers peace of mind, no matter how your business changes.
The sooner you start, the less you’ll be required to worry about making up for lost time later in life. Taking steps toward your retirement goals today means taking control of your financial future and giving yourself the opportunity to focus on your objectives—both for your retirement years and your Dallas, TX business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for those working for themselves in Dallas, TX, each providing its own pros and cons. A financial advisor will guide you to understand the pros and cons of each choice and determine the one best suited for your unique situation. In most cases, your self-employed retirement plan options in Dallas, TX include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that offer key tax perks. In a traditional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but retirement distributions are taxed as income. In contrast, Roth IRA contributions are made with after-tax income, but retirement withdrawals that qualify, including earnings, are tax-free. In both types of accounts, withdrawals don’t incur penalties as long as you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, both traditional and Roth IRAs are open to those with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA serves as a retirement savings option that permits self-employed individuals to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) cannot make additional contributions above the 25% you (the employer) allocate. If you have employees, you must contribute the same amount for them as you do for yourself. You may choose to contribute a set monetary value or a percentage of wages to employee accounts. SEP IRAs may be ideal for companies with cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs function like traditional IRAs, where contributions are made with pre-tax money and money withdrawn is subject to income tax.
Eligibility: Both employers and self-employed individuals can establish 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 allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan meant for businesses without employees or if the only employee is your spouse. These plans are similar to standard 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This offers more savings than SEPs or IRAs; however, the extra savings options often come with more restricted investment choices. In a solo 401(k) plan, 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 have the ability to make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, subject to the annual contribution limit. In 2025, those limits are $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) cannot exceed 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
Your combined contributions must not surpass $70,000, or $77,500 if you're over age 50 (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans is a retirement option that delivers a set amount to business owners upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine the precise amount they'll get in retirement. This option is best suited for higher-income self-employed individuals who are focused on saving a substantial amount for retirement and can commit to making substantial contributions. Contributions are tax deferred, and withdrawals are taxed as income in retirement.
Eligibility: Entrepreneurs managing a one-person company or employing fewer than five people are eligible to open an individual defined benefit plan, but it's most commonly advised for people above age 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans tend to be:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% and are willing to do more
- Organizations that have demonstrated consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions must be determined by an actuary using your earnings, age, and retirement objectives. Allowable contributions change annually.
The Importance of a Financial Advisor in Dallas, TX for Your Self-Employed Retirement Plan
Partnering with an advisor in Dallas, TX experienced with retirement plans for the self-employed is an important asset for self-employed individuals. They have the expertise to help understand the intricacies of saving for retirement and develop a personalized approach that reflects your aspirations. An expert in your area will evaluate your financial situation, identify your risk preferences, and help you in choosing wisely about saving and investing for retirement. Part of what we do for you features:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Further adapt the plan to your needs even further
- Create a written plan that complies with IRS regulations
- Set up an asset trust plan
- Help you understand the plan's terms
- Track and fine-tune your plan as needed
- Offer continued financial education and guidance to help you navigate your retirement journey
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Dallas, TX: Correct Capital's Process
Dallas, TX business owners who don’t have the time or expertise to handle their own retirement planning independently can become overwhelmed by their available plans. With Correct Capital, our Dallas, TX financial advisors manage the lion's share of your retirement strategy for you, and strive to ensure meeting your retirement goals as straightforward as possible for you. We can help you get set up your self-employed retirement plan in four simple 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 suited to your needs for you and your business. This initial call lets us learn about your needs with no pressure or extensive time commitment on your part.
- Gather Information: Should we agree to proceed, we'll ask for information, including how many employees you have (if any), your current financial situation, and your future objectives. This allows us to put together a tailored approach designed just for you.
- Review Your Plan: After we put together a plan from the information you provide, we'll meet with you and review your plan in detail to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll put everything in place so you can initiate your savings journey. Throughout our relationship, we'll meet with you and monitor your plan to keep it tailored to your evolving circumstances.
Our Dallas, TX financial advisors and retirement plan consultants are fiduciary advisors, which means they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Dallas, TX include:
- 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 Dallas, TX
Your business isn't "just a business" to you, and your Dallas, TX financial advisors need to offer more than basic financial recommendations. With Correct Capital, we take the time to get to know our clients and their businesses to create personalized self-employed retirement plans. To every client in Dallas, TX, we provide our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To get started on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
