Self-employed retirement plans Denver, CO. The independence of running your own company in Denver, CO is one of the greatest advantages of having a self-directed career. Even so, this flexibility often comes with a lack of security, especially when it comes to building your retirement fund, since you don't have access to a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many could benefit from looking into other possibilities. In addition to enjoying a financially stable retirement, seeking advice from a financial advisor in Denver, CO to create your self-employed retirement plan delivers significant tax advantages that allow your business to grow and succeed.
Few Denver, CO investment consulting and retirement planning firms are as attuned to the requirements of entrepreneurs as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (check out our story here), and Correct Capital are deeply experienced in helping businesses with their retirement planning needs. We understand that your goals for your business and retirement extend well past just monetary concerns, and we are dedicated to create tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Denver, CO, or call Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Denver, CO today.
Why Denver, CO Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also provide tangible benefits today. From flexible contributions to substantial tax savings, working with a financial advisor in Denver, CO allows you to create your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income from year to year, a plan like a SEP IRA or Solo 401(k) offers the flexibility to modify how much you save:
- Customizable Contributions: Contribute more during profitable years and reduce savings when revenues are down, so that your plan works with your cash flow.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw without tax penalties in the future—a wise move if you believe your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, allowing you to keep more of your earnings.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to grow.
- State-Specific Incentives: Depending on where you live, you may be eligible for additional tax breaks as a sole proprietor. These regional incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals 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
Building a secure retirement goes beyond just how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Allocating your investments across different stocks, bonds, and other assets serves to reduce risk while helping to grow your savings.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business ensures you don’t using your retirement funds during tough times and risking extra costs.
Plan for the Future of Your Denver, CO Business
Retirement planning also helps you prepare for what’s next with your Denver, CO business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s stay in your name and don’t transfer with the business. These plans ensure the reliable income you’ll need later on. Keep in mind that while the sale of a business usually creates a capital gain, retirement plan contributions are capped at annual limits (e.g., as much as $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Using retirement contributions wisely can reduce the taxes you’ll owe when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts provide a stable foundation during the change. You can also work 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, lower your tax bill, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Denver, CO Now?
Time remains one of the most important factors in retirement planning. Beginning sooner rather than later not only allows you to build a larger nest egg but also reduces the financial burden of catching up later in life. This is why it is beneficial to start now:
The Cost of Waiting
Delaying your retirement savings may cause a substantial impact on the total you’ll have when you retire. The biggest reason is compound interest—the concept where your investments grow, and those returns, subsequently, earn even more returns. The greater time span your money has to grow, the larger the benefit of this compounding process.
Example: Taylor and Alex are both self-employed individuals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor delays savings until age 40 but saves $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and ends up with $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time can lead to substantial growth. Consider this example showing the power of compound interest:
- Starting at age 25: If you invest $200 per month in a retirement plan with an average annual return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month yields only $235,412.97* by age 65—a gap of over $260,000, all because of a 10-year delay.
Starting sooner, the less you need to save each year to achieve your retirement goals.
*The figures provided in this example represent estimates derived from NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. These examples are for illustrative purposes only and cannot predict actual future outcomes. Your individual results may differ due to elements like market conditions, fees, and personal factors. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
For self-employed individuals in Denver, CO, it can be tempting to focus more on reinvesting in your business over saving for retirement. That said, starting a plan now allows you to:
- Take advantage of tax-free future growth or tax-free withdrawals in the future.
- Take advantage of contribution flexibility that align with your cash flow.
- Create a safety net that provides security, no matter how your business changes.
The sooner you start, the less you’ll be required to worry about catching up later in life. Taking steps toward your retirement goals today means managing your financial future and allowing yourself the opportunity to focus on your objectives—both for your future retirement and your Denver, CO business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for those working for themselves in Denver, CO, each offering its own benefits and trade-offs. A financial advisor will guide you to evaluate the advantages and disadvantages of each choice and choose the one most suitable for your circumstances. Typically, your self-employed retirement plan options in Denver, CO are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that include distinct tax benefits. In a conventional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are taxable. In contrast, Roth IRA contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both cases, withdrawals are penalty-free provided you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are available to anyone with taxable earnings.
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: SEP IRAs is a retirement plan that allows self-employed individuals 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) would not be able to contribute 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 flat-dollar amount or a percentage of wages to employee accounts. This type of plan is a good option for companies with periods of inconsistent earnings. Unlike other plans, SEP IRAs are free of costly startup or administrative fees.
SEPs work like traditional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Both employers and self-employed individuals 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
If you’re self-employed, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan designed for businesses without employees or if the only employee is your spouse. This type of plan function similarly to standard 401(k) plans, and allow you to contribute 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 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 are eligible to open and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you are allowed to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your self-employment income, up to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) are limited to 25% of your net earnings from self-employment, which is your net profit minus half of your self-employment tax and the deferrals you made.
Total contributions are capped at $70,000, or $77,500 for individuals aged 50+ (as of 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that guarantees a pre-established payout to self-employed individuals upon retirement. As opposed to defined contribution plans, a defined benefit plan doesn't fluctuate based on investment returns, but lets individuals clearly understand the precise amount they'll have in retirement. This option is recommended for higher-income self-employed individuals who aim to accumulate a substantial amount for retirement and are willing to make larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxed as income during retirement.
Eligibility: Entrepreneurs managing a one-person company or employing fewer than five people may establish an individual defined benefit plan, but it's most commonly suggested for individuals aged 50+ who make $250,000 or more annually. In most cases, good candidates for defined benefit plans tend to be:
- Business owners or partners 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
- Businesses with proven consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution must be determined by an actuary using your income, age, and retirement goals. Allowable contributions are adjusted each year.
The Importance of a Financial Advisor in Denver, CO for Your Self-Employed Retirement Plan
A financial advisor in Denver, CO specialized in self-employed retirement plans serves as an essential partner for those working for themselves. They have the expertise to help guide you through the challenges of retirement planning and develop a customized plan that reflects your aspirations. A financial advisor in Denver, CO will evaluate your financial situation, determine how much risk you’re comfortable with, and help you in choosing wisely about saving and investing for retirement. A key part of what we do for you includes:
- Assist in selecting a plan that suits your unique requirements
- Tailor 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
- Monitor and adjust your plan as needed
- Offer continued financial education and guidance to help you navigate your retirement journey
- Boost your retirement earnings by optimizing your social security benefits
Self-Employed Retirement Plans in Denver, CO: Correct Capital's Process
Denver, CO business owners who don’t have the time or expertise to handle their retirement savings strategy on their own can become overwhelmed by their choices. With Correct Capital, our Denver, CO financial advisors take on the lion's share of your savings plan setup for you, and strive to ensure meeting your future savings targets as easy as possible for you. We are here to assist you in setting up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if our services align for you and your business. This initial call lets us get a sense of your goals with no pressure or significant effort 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 helps us create a tailored approach suited specifically for your needs.
- Review Your Plan: After we put together a plan using the information you provide, we'll sit down with you and go over your plan in detail to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll put everything in place so you can initiate your savings journey. As time goes on, we'll check in and track your progress to make sure it remains aligned with your goals.
Our Denver, CO financial advisors and retirement plan consultants serve as fiduciary advisors, meaning they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in Denver, CO 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 Denver, CO
Your business isn't "just a business" to you, and your Denver, CO financial advisors need to offer more than basic financial recommendations. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to provide tailored self-employed retirement plans. To every client in Denver, CO, 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, reach out to Correct Capital at 877-930-401k or contact us online.
