Self-employed retirement plans Dayton, OH. The independence of being your own boss in Dayton, OH is one of the best aspects of being self-employed. Even so, this independence often comes with a lack of security, notably in terms of building your retirement fund, because you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless should consider exploring their options. In addition to having a more comfortable retirement, partnering with a financial advisor in Dayton, OH to create your self-employed retirement plan can provide significant tax advantages that enable both you and your business to thrive.
Few Dayton, OH financial advisory and retirement planning firms truly grasp the challenges faced by entrepreneurs quite like Correct Capital. Our founder's father was a small business owner himself (check out our story here), and our firm are deeply experienced in supporting entrepreneurs with their retirement planning needs. We recognize that your business and retirement aspirations extend well past basic numbers, and we strive to provide tailored solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Dayton, OH, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Dayton, OH today.
Why Dayton, OH Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also provide immediate benefits today. With customizable contribution options to substantial tax savings, working with a financial advisor in Dayton, OH enables you to create your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
If your income changes from year to year, a plan like a SEP IRA or Solo 401(k) gives you the freedom to adjust how much you save:
- Customizable Contributions: Contribute more during high-income years and scale back when revenues are down, ensuring your plan works with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw without tax penalties in the future—a smart decision if you believe your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, allowing you to keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to compound.
- State-Specific Incentives: In some states, you might access additional credits as a self-employed individual. These local incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can apply for a credit of up to 50% of the first $2,000 put into a retirement plan, cutting down 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 stocks, bonds, and alternatives serves to mitigate financial risk while helping to grow your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business prevents you from dipping into savings during tough times and risking extra costs.
Plan for the Future of Your Dayton, OH Business
Preparing for retirement enables you to prepare for what’s next with your Dayton, OH business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s stay in your name and won’t be included in the sale. These savings ensure the financial stability you’ll need later on. Remember that while selling your business results in a capital gain, retirement plan contributions are capped at annual limits (e.g., up to $7,000 for IRAs or up to $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you might face when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg ensure a stable foundation during the change. You might want to work with a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens associated with the transaction.
With the best-fit retirement strategy, you gain control over your financial future, cut down your tax obligations, and build a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Dayton, OH Now?
Time remains one of the most crucial assets in retirement planning. Beginning sooner rather than later not only lets you accumulate a bigger financial cushion but also minimizes the pressure of playing catch-up as you get older. 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 stop working. The primary reason is compound interest—the powerful process where your investments grow, and those returns, then, generate even more returns. The greater time span your money has to grow, the greater the impact of this compounding process.
Example: Two individuals, Alex and Taylor are both self-employed individuals. Both of them want to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but saves $7,500 annually to make up for lost time.
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 may result in substantial growth. Here’s a simple scenario showing the effect of consistent growth:
- Starting at age 25: If you invest $200 per month in a retirement plan with an average annual return of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Saving the same $200 per month yields only $235,412.97* by age 65—a gap of over $260,000, simply due to a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to reach your retirement goals.
*These calculations are estimates calculated using 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 intended as illustrative examples and are not a promise of future results. Actual results may vary depending on elements like market conditions, fees, and personal factors. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Dayton, OH, it might seem easier to prioritize reinvesting in your business rather than saving for retirement. However, starting a plan now allows you to:
- Leverage growth that is tax-deferred or withdrawals without taxes in the future.
- Take advantage of contribution flexibility that adapt to your earnings.
- Create a safety net that provides security, 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. Saving for retirement now means taking control of your financial future and allowing yourself the opportunity to focus on your objectives—both for your future retirement and your Dayton, OH business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for self-employed individuals in Dayton, OH, each offering its own benefits and trade-offs. A financial advisor can help you evaluate the benefits and drawbacks of each plan and determine the one best suited for your unique situation. Generally speaking, your self-employed retirement plan options in Dayton, OH include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that provide key tax perks. In a standard IRA, you can usually deduct your contributions from taxable income, and returns grow free of current taxes, but withdrawals in retirement are taxable. In contrast, Roth IRA contributions are made with after-tax income, but qualified withdrawals in retirement, including earnings, are tax-free. In both types of accounts, withdrawals are penalty-free if you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, IRAs, including traditional and Roth options 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: The Simplified Employee Pension IRA offers a way to save for retirement that allows entrepreneurs to set aside a portion of their self-employment income. Contributions are strictly employer contributions an employer, so, as a sole proprietor, you (the employee) are limited to contributions from the employer role above the 25% you (the employer) allocate. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. It's your choice whether to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for companies with cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs operate like traditional IRAs, where contributions are made with pre-tax money and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed can establish 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: The Solo 401(k), commonly known as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for companies that have no employees or when the sole employee is your spouse. This type of plan function similarly 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 additional opportunities can be balanced by more limited investment options. With this type of 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 can make two types of contributions:
- Employee contributions of up to 100% of your earned income from self-employment, subject to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) must not surpass 25% of your adjusted self-employment income, 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+ (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan is a retirement option that delivers a set amount to business owners upon retirement. As opposed to defined contribution plans, a defined benefit plan doesn't fluctuate based on investment returns, but allows self-employed individuals to know what they'll have in retirement. This option is best suited for high-earning entrepreneurs who are focused on saving a substantial amount for retirement and can commit to making larger deposits. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income upon retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees are eligible to open an individual defined benefit plan, but it's most commonly recommended for those over 50 who earn at least $250,000 a year. Generally, good candidates for defined benefit plans are:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% with plans to contribute more
- Organizations that have demonstrated consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions is calculated by an actuary determined by your financial situation, age, and savings targets. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Dayton, OH for Your Self-Employed Retirement Plan
Working with a financial advisor in Dayton, OH focused on self-employed retirement strategies can be an important asset for self-employed individuals. They offer the knowledge to assist navigate the complexities of retirement planning and design a personalized approach that matches your objectives. An expert in your area will evaluate your financial situation, identify your risk preferences, and guide you in choosing wisely about saving and investing for retirement. A key part of what we do for you features:
- Guide you in choosing a plan that suits your unique requirements
- Tailor the plan to your needs even further
- Formalize a plan in writing as required by IRS rules
- Organize a trust plan to manage your assets
- Ensure you comprehend the plan's terms
- Track and fine-tune your plan when necessary
- Offer continued financial education and guidance as you continue on the road to retirement
- Maximize what you receive in retirement by making the most of your social security
Self-Employed Retirement Plans in Dayton, OH: Correct Capital's Process
Dayton, OH business owners who don’t have the time or expertise to handle their retirement savings strategy themselves can become overwhelmed as they look at their options. At Correct Capital, our Dayton, OH financial advisors manage the bulk of your savings plan setup for you, and strive to ensure meeting your financial objectives as easy 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: A quick 20-minute call is all it takes, a member of our advisor team will assess if we're suited to your needs for you and your business. This short conversation lets us understand what you're looking for with zero commitment or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including your employee count, your existing financial picture, and your retirement goals. This helps us create a custom plan designed just for you.
- Review Your Plan: After we put together a plan based on the information you provide, we'll meet with you and discuss your plan step by step to make sure it's clear 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 start saving. As time goes on, we'll have regular meetings and monitor your plan to keep it tailored to your evolving circumstances.
Our Dayton, OH financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in Dayton, OH 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 Dayton, OH
You don't see your business as "just a business", and your Dayton, OH financial advisors need to offer more than basic financial recommendations. At Correct Capital, we take the time to get to know our clients and their businesses to create customized self-employed retirement plans. We offer all our Dayton, OH clients our I.O.U. promise: all guidance we provide 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.
