Self-employed retirement plans Dallas, TX. The independence of running your own company in Dallas, TX is one of the greatest advantages of having a self-directed career. However, this independence sometimes brings with potential drawbacks, particularly regarding retirement savings, as you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off looking into other possibilities. In addition to achieving a more secure retirement, seeking advice from a financial advisor in Dallas, TX to set up your self-employed retirement plan can provide significant tax advantages that allow your business to grow and succeed.
Few Dallas, TX investment consulting and retirement planning firms understand the needs of small business owners better than Correct Capital. Our founder's father was a small business owner himself (learn more about our story here), and our firm take pride in helping businesses with their retirement planning needs. We recognize that your professional and personal aspirations aren’t limited to basic numbers, and we are dedicated to offer customized solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Dallas, TX, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Dallas, TX today.
Why Dallas, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver tangible benefits today. From flexible contributions to significant tax savings, partnering with a financial advisor in Dallas, TX enables you to customize your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) offers the option to adjust how much you save:
- Customizable Contributions: Set aside more during successful years and reduce savings when your earnings dip, so your plan aligns with your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw tax-free later—an advantageous choice if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed provide powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, allowing you to keep more of your income.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to compound.
- State-Specific Incentives: Based on your location, you could qualify for state-specific deductions as a sole proprietor. These local incentives 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 put into a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement goes beyond just how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across different stocks, bonds, and other assets serves to reduce risk while still growing your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund prevents you from tapping into your nest egg during challenging periods and facing tax 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 savings can provide the steady income you’ll need in the future. It’s important to note that while selling your business results in a capital gain, retirement plan contributions are subject to yearly maximums (e.g., up to $7,000 for IRAs or up to $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions helps lower the taxes you might face when you transfer your business.
- Succession Planning: For those winding down or handing over their business, your nest egg ensure a stable foundation during the change. You might want to partner with a financial advisor with expertise in succession and retirement planning to reduce taxes during the sale.
With the proper savings strategy, you manage your financial future, reduce your tax burden, and build 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 crucial assets when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a larger nest egg but also reduces the financial burden of playing catch-up as you get older. The following are reasons why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund could lead to a major impact on the amount you’ll have when you reach retirement age. The main reason is compound interest—the powerful process where your investments earn returns, and those returns, subsequently, earn even more returns. The more time your money has to grow, the larger the impact of this compounding process.
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 postpones starting contributions to age 40 but puts away $7,500 annually to bridge the gap.
By age 65, with an assumption of 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently often create impressive growth. Consider this example showing the effect of compounding:
- Starting at age 25: By investing $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll grow to approximately $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 difference of over $260,000, simply due to a 10-year delay.
Starting sooner, the less effort required each year to meet 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. The scenarios provided are for illustrative purposes only and are not a promise of future results. Actual results may vary depending on factors such as market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Dallas, TX, it might seem easier to focus more on reinvesting in your business over saving for retirement. That said, starting a plan now allows you to:
- Benefit from growth that is tax-deferred or withdrawals without taxes down the road.
- Take advantage of adjustable savings that adapt to your earnings.
- Create a financial cushion that offers peace of mind, no matter how your business changes.
Getting started now, the less you’ll have to worry about catching up later in life. Building your retirement savings today means gaining control over your financial future and allowing yourself the opportunity to turn your attention to your goals—both for your future retirement and your Dallas, TX business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for self-employed individuals in Dallas, TX, each with its own advantages and considerations. A financial advisor is available to help you evaluate the pros and cons of each plan and determine the one ideal for your unique situation. In most cases, 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 offer distinct tax benefits. In a standard IRA, the money you contribute is often tax-deductible, and earnings grow without immediate taxation, but retirement distributions are taxed as income. In contrast, with Roth IRAs, you contribute are made with after-tax income, but qualified withdrawals in retirement, including earnings, are not taxed. In both types of 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, IRAs, including traditional and Roth options are available to anyone with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $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 serves as a retirement savings option that permits those who are self-employed to contribute a percentage of their net earnings. Contributions are strictly employer contributions an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) already contributed. If you have employees, you must 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. A SEP IRA may be ideal for entrepreneurs facing fluctuating revenue streams. Compared to other retirement options, SEP IRAs are free of costly startup or administrative fees.
SEPs operate like conventional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Both employers and self-employed individuals 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
For self-employed individuals, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed designed for businesses without employees or when the sole employee is your spouse. Solo 401(k)s are similar to traditional employer-managed 401(k) plans, and enable contributions as both an employee or an employer with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the additional opportunities may be offset by more restricted investment choices. With this type of plan, you can make either traditional or Roth deferrals, which share the same tax benefits as their IRA contribution counterparts.
Eligibility: Solo 401(k)s are available solely to business owners and their spouses can set up and contribute to a solo 401(k).
Contribution Limits: For self-employed individuals with a solo 401(k) plan, you can make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your self-employed earnings, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 for those who turn 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your net earnings from self-employment, which is calculated as net profits less half of your self-employment tax and the elective deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for individuals aged 50+ (in 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that provides a fixed, predetermined benefit to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but allows self-employed individuals to know exactly how much they'll receive in retirement. This strategy is recommended for high-earning self-employed individuals who are focused on saving a large amount for retirement and are prepared to contribute substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income in retirement.
Eligibility: Any self-employed individual managing a one-person company or employing fewer than five people can open an individual defined benefit plan, but it's typically advised for people above age 50 who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans include:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Organizations that already put in 3-4% but are open to increasing contributions
- Organizations with proven consistent profit patterns
- Business leaders over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution is calculated by an actuary based on your earnings, age, and retirement objectives. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Dallas, TX for Your Self-Employed Retirement Plan
A financial advisor in Dallas, TX specialized in self-employed retirement plans is an important asset for self-employed individuals. They have the expertise to help guide you through the challenges of retirement planning and develop a tailored strategy that aligns with your goals. Your advisor in Dallas, TX will assess where you stand financially, understand your risk tolerance, and assist 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 best fits your needs and goals
- 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
- Monitor and adjust your plan to keep it aligned with your goals
- Deliver continuous support and financial insights throughout your retirement planning process
- Boost your retirement earnings by making the most of your social security
Self-Employed Retirement Plans in Dallas, TX: Correct Capital's Process
Entrepreneurs in Dallas, TX who don’t have the time or expertise to manage their own retirement planning themselves may end up overwhelmed by their available plans. Through our team at Correct Capital, our Dallas, TX financial advisors take on the bulk of your retirement planning for you, working to make meeting your financial objectives as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can determine if we're a good fit for you and your business. This short conversation lets us learn about your needs with zero commitment or major time investment on your part.
- Gather Information: Should we agree to proceed, we'll request information, including whether you have employees, your current financial situation, and your retirement goals. This helps us create a tailored approach designed just for you.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll schedule a meeting and review your plan step by step to help you fully grasp it and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can begin contributing. Over the course of our partnership, we'll check in and track your progress to make sure it remains aligned with your goals.
Our Dallas, TX financial advisors and retirement plan consultants serve as fiduciary advisors, meaning they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Dallas, TX include:
- Independent Financial Advisor
- Roth Conversion
- 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 Dallas, TX
Your business isn't "just a business" to you, and your Dallas, TX financial advisors should provide more than basic financial recommendations. At Correct Capital, we take the time to get to know our clients and their businesses to deliver tailored self-employed retirement plans. All our clients in Dallas, TX benefit from our I.O.U. promise: all guidance we provide 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.
