Self-employed retirement plans Dallas, TX. The independence of owning your own business in Dallas, TX offers many benefits of working for yourself. That said, this independence can come with a lack of security, particularly regarding retirement savings, because you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, but many should consider exploring their options. In addition to achieving a more secure retirement, partnering with a financial advisor in Dallas, TX to establish your self-employed retirement plan offers significant tax advantages that help you to move your business forward.
Few Dallas, TX wealth management and retirement planning firms understand the needs of self-employed individuals as well as Correct Capital. The father of our founder was a small business owner himself (check out our story here), and Correct Capital have a rich history of supporting entrepreneurs with their retirement planning needs. We recognize that your professional and personal aspirations go far beyond basic numbers, and we are dedicated to create customized solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Dallas, TX, or call Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Dallas, TX today.
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. With customizable contribution options to substantial tax savings, partnering with a financial advisor in Dallas, TX allows you to customize your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary from year to year, a plan like a SEP IRA or Solo 401(k) offers the freedom to modify how much you save:
- Customizable Contributions: Set aside more during high-income years and scale back when income is lower, so your plan aligns with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw your savings tax-free down the road—an advantageous choice if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans provide powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) lower your taxable income, helping you keep more of your hard-earned money.
- 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 extra deductions as a self-employed individual. These local incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can take advantage of a credit of up to 50% of the first $2,000 contributed a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future isn’t only about how much you save—it’s also about how you invest:
- Diversified Portfolios: Distributing your investments across different asset classes like stocks and bonds can help reduce risk while continuing to build your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business prevents you from dipping into savings during tough times and incurring penalties.
Plan for the Future of Your Dallas, TX Business
Preparing for retirement can assist you plan ahead for what’s next with your Dallas, TX business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These plans offer the financial stability you’ll need during retirement. Keep in mind that while selling your business results in a capital gain, retirement plan contributions are restricted by contribution limits (e.g., as much as $7,000 for IRAs or up to $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you’ll owe when you transfer your business.
- Succession Planning: If you’re passing the business on, your retirement accounts ensure a stable foundation as you make this shift. You might want to seek advice from a financial advisor with expertise in succession and retirement planning to reduce taxes on the sale.
With the right retirement plan, you gain control over your financial future, reduce your tax burden, and create a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Dallas, TX Now?
Time is one of the most valuable assets when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a bigger financial cushion but also reduces the pressure of catching up later in life. Here’s why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement can have a substantial impact on the total you’ll have when you retire. The primary reason is compound interest—the concept where your investments grow, and those returns, then, earn even more returns. The more time your money has to grow, the larger the benefit of compounding.
Example: Alex and Taylor are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but puts away $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time can lead to significant growth. Here’s a simple scenario showing the power of compound interest:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an projected return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month would result in only $235,412.97* by age 65—a difference of over $260,000, all because of a 10-year delay.
Saving early, the less effort required each year to meet your retirement goals.
*These calculations are based on estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. These examples are intended as illustrative examples and cannot predict actual future outcomes. Your individual results may differ due to elements like market conditions, fees, and individual circumstances. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in Dallas, TX, it is often the case that you put more emphasis on reinvesting in your business over saving for retirement. However, beginning a plan now gives you the chance to:
- Take advantage of growth that is tax-deferred or withdrawals without taxes in the future.
- Enjoy adjustable savings that align with your earnings.
- Establish a safety net that offers peace of mind, no matter how your business develops.
Getting started now, the less you’ll need 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 with its own advantages and considerations. A financial advisor is available to help you understand the advantages and disadvantages of each option and choose the one most suitable for your needs. Generally speaking, your self-employed retirement plan options in Dallas, TX are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that provide distinct tax benefits. In a standard IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but retirement distributions are taxable. In contrast, Roth IRA contributions using income already taxed, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both types of accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are accessible for individuals with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that permits those who are self-employed to set aside a portion of their self-employment income. Contributions must come from an employer, so, as a self-employed individual, you (the employee) cannot make additional contributions more than the 25% you (the employer) allocate. If you have employees, you must contribute the same amount for them as you do for yourself. You have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. SEP IRAs is a good option for businesses that experience cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs lack expensive setup or ongoing fees.
SEPs operate like traditional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 25% of compensation, or
- $70,000 for 2025
As a self-employed person, the contribution you can make 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 savings option for the self-employed designed for companies that have no employees or when the sole employee is your spouse. Solo 401(k)s are similar to 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 increased savings potential can be balanced by more constrained investment avenues. 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: Solo 401(k)s are available solely to business owners and their spouses may establish 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:
- Deferrals as an employee of up to 100% of your self-employment income, subject to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you're over 50, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) are limited to 25% of your adjusted self-employment income, which is defined as net profit minus half of your self-employment tax and the deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (as of 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan offers a structured retirement solution that guarantees a set amount to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, this plan is not influenced by market performance, but allows self-employed individuals to know what they'll have in retirement. This plan is best suited for wealthier entrepreneurs who are focused on saving a substantial amount for retirement and are willing to make substantial contributions. Contributions offer tax-deferred growth, and withdrawals incur taxes as income during retirement.
Eligibility: Any self-employed individual running an owner-only business or with less than five employees can open an individual defined benefit plan, but it's typically recommended for people above age 50 who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans tend to be:
- Partners or owners 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
- Organizations with proven consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions must be determined by an actuary using your income, age, and retirement goals. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Dallas, TX for Your Self-Employed Retirement Plan
Partnering with an advisor in Dallas, TX specialized in self-employed retirement plans serves as an essential partner for those working for themselves. They bring the skills needed to understand the intricacies of saving for retirement and craft a customized plan that reflects your aspirations. A financial advisor in Dallas, TX will evaluate your financial situation, identify your risk preferences, and help you in making informed decisions about saving and investing for retirement. Part of what we do for you features:
- Assist in selecting a plan that suits your unique requirements
- Further adapt the plan to fit you personally even further
- Formalize a plan in writing as required by IRS rules
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Track and fine-tune your plan to keep it aligned with your goals
- Provide ongoing education and advice as you continue on the road to retirement
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Dallas, TX: Correct Capital's Process
Entrepreneurs in Dallas, TX who aren’t equipped with the time or understanding to handle their self-employed retirement plan on their own may end up overwhelmed as they look at their choices. At Correct Capital, our Dallas, TX financial advisors take on the bulk of your retirement strategy for you, working to make meeting your retirement goals as straightforward as possible for you. We are here to assist you in setting up your self-employed retirement plan in four simple steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can help understand if we're suited to your needs for you and your business. This brief introduction lets us get a sense of your goals with no obligation or major time investment on your part.
- Gather Information: Should we agree to proceed, we'll ask for information, including your employee count, your current financial situation, and your retirement goals. This enables us to craft a custom plan suited specifically for your needs.
- Review Your Plan: After we put together a plan based on the information you provide, we'll sit down with you and review your plan thoroughly to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can start saving. Throughout our relationship, we'll have regular meetings and review your strategy to make sure it remains aligned with your goals.
Our Dallas, TX financial advisors and retirement plan consultants are fiduciary advisors, which means they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Dallas, TX include:
- 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
- High-Net-Worth Wealth Management
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 should provide more than just good financial guidance. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to deliver customized self-employed retirement plans. To every client in Dallas, TX, we provide our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To begin on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
