Self-employed retirement plans Escondido, CA. The independence of running your own company in Escondido, CA is one of the greatest advantages of working for yourself. That said, this freedom often comes with potential drawbacks, especially in terms of planning for retirement, because you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider exploring their options. In addition to having a more secure retirement, partnering with a financial advisor in Escondido, CA to establish your self-employed retirement plan delivers significant tax advantages that help both you and your business to thrive.
Few Escondido, CA wealth management and retirement planning firms understand the needs of entrepreneurs better than Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (learn more about our story here), and Correct Capital have a rich history of helping businesses with their retirement planning needs. We know that your business and retirement aspirations go far beyond simple financial figures, and we are dedicated to offer personalized solutions to meet your unique goals. Continue exploring to find out about your self-employed retirement plan options in Escondido, CA, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Escondido, CA today.
Schedule a Meeting With an Advisor Today
Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
Schedule a 15-Minute Introductory Call
Why Escondido, CA 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 tangible benefits today. With customizable contribution options to considerable tax savings, consulting a financial advisor in Escondido, CA allows you to create your retirement plan to suit your specific needs.
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 option to tailor how much you save:
- Customizable Contributions: Contribute more during high-income years and cut back when your earnings dip, so your plan aligns with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw without tax penalties in the future—a smart decision if you expect your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals provide powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, helping you keep more of your earnings.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, providing your money more time to compound.
- State-Specific Incentives: Based on your location, you could qualify for additional tax breaks as a business owner. These state-level incentives can 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 contributed a retirement plan, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure retirement requires more than how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Allocating your investments across varied asset classes like stocks and bonds can help minimize exposure to risk while continuing to build your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund prevents you from using your retirement funds during challenging periods and risking extra costs.
Plan for the Future of Your Escondido, CA Business
A thoughtful retirement strategy also helps you prepare for what’s next with your Escondido, CA 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 plans ensure the financial stability 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 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, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you might face when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings provide a stable foundation during the change. You can also partner with a financial advisor experienced in both succession and retirement strategies to minimize tax burdens associated with the transaction.
With the right retirement plan, you gain control over your financial future, lower your tax bill, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Escondido, CA Now?
Time is one of the most important resources in retirement planning. Beginning sooner rather than later not only helps you grow a larger nest egg but also reduces the stress of catching up later in life. The following are reasons why it is beneficial to start now:
The Cost of Waiting
Delaying your retirement savings may cause a significant 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, in turn, earn even more returns. The greater time span your money has to grow, the larger the benefit of this growth.
Example: Two individuals, Alex and Taylor are both self-employed professionals. Both of them want to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor delays savings until age 40 but puts away $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor contributes $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments invested steadily can lead to substantial growth. Consider this example showing the effect of compound interest:
- Starting at age 25: By investing $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll accumulate $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 lower your annual savings needs each year to achieve your retirement goals.
*The figures provided in this example are based on estimates generated with NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is for illustrative purposes only and do not guarantee future performance. Outcomes may change depending on variables including 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 Escondido, CA, it is often the case that you focus more on reinvesting in your business over saving for retirement. However, beginning a plan now enables you to:
- Leverage growth that is tax-deferred or withdrawals without taxes later on.
- Take advantage of contribution flexibility that change with your income.
- Create a safety net that offers peace of mind, no matter how your business develops.
Getting started now, the less you’ll be required to worry about catching up later in life. Building your retirement savings today means gaining control over your financial future and giving yourself the freedom to concentrate on your objectives—both for your retirement years and your Escondido, CA business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for entrepreneurs in Escondido, CA, each with its own pros and cons. A financial advisor will guide you to learn about the pros and cons of each plan and determine the one best suited for your unique situation. Generally speaking, your self-employed retirement plan options in Escondido, CA include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that provide distinct tax benefits. In a conventional IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but retirement distributions are subject to income tax. In contrast, with Roth IRAs, you contribute using income already taxed, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both cases, withdrawals are penalty-free if you are at least 59½.
Eligibility: Unlike plans linked to your job, traditional and Roth IRAs are accessible for individuals with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs serves as a retirement savings option that enables those who are self-employed to save a percentage of their net business profits. Contributions can only be made by 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 may choose 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. Unlike other plans, SEP IRAs are free of expensive setup or ongoing fees.
SEPs function like conventional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 25% of compensation, or
- $70,000 for 2025
For self-employed individuals, the amount eligible to be contributed 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 self-employed retirement plan meant for companies that have no employees or where the only employee is a spouse. This type of plan are similar to employer-sponsored 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This provides more savings than SEPs or IRAs; however, the additional opportunities can be balanced by more limited investment options. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which have the same tax benefits as their IRA contribution counterparts.
Eligibility: This plan is exclusively for business owners and their spouses can set up and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you have the ability to make two types of contributions:
- Deferrals as an employee of up to 100% of your earned income from self-employment, capped at the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 for those aged 50 and above, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your adjusted self-employment income, which is defined as net profit minus half of your self-employment tax and the elective 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 individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that provides a set amount to business owners upon retirement. Unlike defined contribution plans mentioned above, this plan is not influenced by market performance, but allows self-employed individuals to know the precise amount they'll have in retirement. This option is recommended for wealthier self-employed individuals who are focused on saving a substantial amount for retirement and can commit to making larger deposits. Contributions offer tax-deferred growth, and withdrawals incur taxes as income during retirement.
Eligibility: Any self-employed individual running an owner-only business or employing fewer than five people may establish an individual defined benefit plan, but it's generally recommended for those over 50 who make $250,000 or more annually. Generally, good candidates for defined benefit plans include:
- Business owners or partners who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% but are open to increasing contributions
- Businesses with proven consistent profit patterns
- Entrepreneurs 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 based on your earnings, age, and retirement objectives. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Escondido, CA for Your Self-Employed Retirement Plan
Working with a financial advisor in Escondido, CA experienced with retirement plans for the self-employed is an invaluable resource for entrepreneurs. They have the expertise to help navigate the complexities of retirement planning and design a personalized approach that reflects your aspirations. Your advisor in Escondido, CA will assess where you stand financially, identify your risk preferences, and assist you in selecting the best options about saving and investing for retirement. A key part of what we do for you involves:
- Help you choose a plan that best fits your needs and goals
- Tailor the plan to your needs even further
- Create a written plan as required by IRS rules
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Track and fine-tune your plan when necessary
- Provide ongoing education and advice to help you navigate your retirement journey
- Boost your retirement earnings by making the most of your social security
Self-Employed Retirement Plans in Escondido, CA: Correct Capital's Process
Escondido, CA business owners who aren’t equipped with the time or understanding to handle their retirement savings strategy themselves can become overwhelmed as they look at their options. With Correct Capital, our Escondido, CA financial advisors manage the majority of your retirement planning for you, to help make meeting your retirement goals as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: In just 20 minutes, a member of our advisor team can determine if we're a good fit for you and your business. This brief introduction lets us understand what you're looking for with no pressure or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including whether you have employees, your present financial standing, and your future objectives. This enables us to craft a tailored approach designed just for you.
- 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 in detail to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can start saving. As time goes on, we'll meet with you and monitor your plan to make sure it remains aligned with your goals.
Our Escondido, CA financial advisors and retirement plan consultants are fiduciary advisors, meaning they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Escondido, CA include:
- 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 Escondido, CA
Your business isn't "just a business" to you, and your Escondido, CA financial advisors should provide more than basic financial recommendations. At Correct Capital, we make it a priority to understand our clients and their businesses to create personalized self-employed retirement plans. All our clients in Escondido, CA benefit from our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To begin on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
