Self-employed retirement plans Denver, CO. The independence of being your own boss in Denver, CO offers many benefits of having a self-directed career. However, this flexibility sometimes brings with certain challenges, notably when it comes to retirement savings, as you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off understanding their retirement options. In addition to achieving a more secure retirement, partnering with a financial advisor in Denver, CO to create your self-employed retirement plan offers significant tax advantages that enable both you and your business to thrive.
Few Denver, CO 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 we take pride in assisting business owners in their retirement planning needs. We know that your business and retirement aspirations go far beyond simple financial figures, and we strive to create tailored solutions to meet your unique goals. Read on to discover about your self-employed retirement plan options in Denver, CO, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a self-employed 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 offer tangible benefits today. From flexible contributions to significant tax savings, working with a financial advisor in Denver, CO helps you customize your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) gives you the freedom to tailor how much you save:
- Customizable Contributions: Set aside more during successful years and scale back when revenues are down, so your plan aligns with your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw tax-free later—a wise move if you believe your tax rate will increase in the future.
Save Money on Taxes
Retirement plans for self-employed individuals provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, helping you keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to compound.
- State-Specific Incentives: Depending on where you live, you might access additional deductions as a self-employed individual. These regional incentives can make these plans even more valuable.
- 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, helping to lower 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 about how you invest:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and alternatives serves to minimize exposure to risk while continuing to build your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business helps you avoid using your retirement funds during financial hardships and facing tax penalties.
Plan for the Future of Your Denver, CO Business
Preparing for retirement can assist you plan ahead for what’s next with your Denver, CO business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s stay in your name and don’t transfer with the business. These savings can provide the reliable income you’ll need in the future. It’s important to note that while the sale of a business usually creates a capital gain, retirement plan contributions are capped at annual limits (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions helps lower the taxes you’ll owe when you transfer your business.
- Succession Planning: If you’re passing the business on, your retirement accounts provide financial security during the change. You can also work with a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens during the sale.
With the best-fit retirement strategy, you can take control of your financial future, cut down your tax obligations, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Denver, CO 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 allows you to build a bigger financial cushion but also reduces the financial burden of saving aggressively in the future. Here’s why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement could lead to a significant impact on the amount you’ll have when you stop working. The primary reason is compound interest—the powerful process where your investments grow, and those returns, subsequently, earn even more returns. The longer your money has to grow, the greater the benefit of compounding.
Example: Taylor and Alex are both self-employed professionals. Both of them want 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 contributes $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time may result in significant growth. Here’s a simple scenario showing the impact of compounding:
- Starting at age 25: Putting aside $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 would result in only $235,412.97* by age 65—a difference of over $260,000, simply due to a 10-year delay.
The earlier you begin, the less effort required each year to meet your retirement goals.
*The figures provided in this example are based on estimates generated with 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. The scenarios provided are for illustrative purposes only and cannot predict actual future outcomes. Actual results may vary depending on variables including market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Denver, CO, it is often the case that you put more emphasis on reinvesting in your business instead of saving for retirement. However, starting a plan now allows you to:
- Take advantage of tax-deferred growth or tax-free withdrawals in the future.
- Enjoy flexible contributions that change with your income.
- Build a safety net that provides security, no matter how your business changes.
The sooner you start, the less you’ll need to worry about catching up later in life. Building your retirement savings today means taking control of your financial future and giving yourself the ability to concentrate on your goals—both for your golden years and your Denver, CO business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for entrepreneurs in Denver, CO, each offering its own benefits and trade-offs. A financial advisor can help you evaluate the benefits and drawbacks of each choice and identify the one ideal for your circumstances. In most cases, your self-employed retirement plan options in Denver, CO include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that offer specific tax advantages. In a conventional IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but money taken out during retirement are subject to income tax. In contrast, Roth IRAs require contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are open to those with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that allows entrepreneurs 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) would not be able to contribute beyond the 25% you (the employer) allocate. If you have employees, it's required to 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. This type of plan may be ideal for companies with periods of inconsistent earnings. In contrast to some alternatives, SEP IRAs don’t have 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 set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 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: Solo 401(k)s, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed intended for companies that have no employees or if the only employee is your spouse. Solo 401(k)s are similar to employer-sponsored 401(k) plans, and enable contributions as both an employer and an employee 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 share the same tax benefits as their IRA contribution counterparts.
Eligibility: Only business owners and their spouses may establish and contribute to a solo 401(k).
Contribution Limits: For self-employed individuals with a solo 401(k) plan, you have the ability to make two types of contributions:
- Employee contributions of up to 100% of your earned income from self-employment, capped at 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) are limited to 25% of your adjusted self-employment income, which is your net profit minus half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $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: A defined benefit plan is a retirement option that guarantees 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 allows self-employed individuals to know exactly how much they'll have in retirement. This strategy is best suited for wealthier entrepreneurs who want to save a significant sum for retirement and are prepared to contribute sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income in retirement.
Eligibility: Any self-employed individual running an owner-only business or employing fewer than five people can open an individual defined benefit plan, but it's generally advised for individuals aged 50+ who make $250,000 or more annually. Typically, 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)
- Businesses currently investing 3-4% with plans to contribute more
- Companies showing consistent profit patterns
- Entrepreneurs over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions requires calculation from an actuary using your earnings, age, and retirement objectives. Limits on 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 experienced with retirement plans for the self-employed can be an essential partner for self-employed individuals. They have the expertise to help guide you through the challenges of retirement planning and design a tailored strategy that aligns with your goals. An expert in your area will review your finances, understand your risk tolerance, and help you in making informed decisions about saving and investing for retirement. Part of what we do for you includes:
- Help you choose a plan that aligns with your objectives and circumstances
- Tailor the plan to your needs even further
- Formalize a plan in writing as required by IRS rules
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Review and modify your plan when necessary
- Provide ongoing education and advice as you continue on the road to retirement
- Maximize what you receive in retirement by maximizing your social security benefits
Self-Employed Retirement Plans in Denver, CO: Correct Capital's Process
Entrepreneurs in Denver, CO who don’t have the time or expertise to manage their retirement savings strategy on their own often feel overwhelmed by their choices. At Correct Capital, our Denver, CO financial advisors take on the lion's share of your retirement strategy for you, working to make meeting your financial objectives as easy as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can help understand if our services align for you and your business. This initial call helps us learn about your needs with zero commitment or significant effort 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 long-term savings targets. This enables us to craft a custom plan designed just for you.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll schedule a meeting and go over your plan thoroughly to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll implement the necessary steps so you can initiate your savings journey. Throughout our relationship, we'll meet with you and review your strategy to make sure it remains aligned with your goals.
Our Denver, CO financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are legally and ethically bound to do what's in your best interest.
Other financial advisory services we offer in Denver, CO 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 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. At Correct Capital, we make it a priority to understand our clients and their businesses to deliver personalized self-employed retirement plans. We offer all our Denver, CO clients our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To get started on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
