Self-employed retirement plans Eugene, OR. The freedom of owning your own business in Eugene, OR is one of the greatest advantages of working for yourself. That said, this independence often comes with potential drawbacks, particularly regarding building your retirement fund, as you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off exploring their options. In addition to enjoying a more comfortable retirement, seeking advice from a financial advisor in Eugene, OR to create your self-employed retirement plan delivers significant tax advantages that allow your business to grow and succeed.
Few Eugene, OR financial advisory and retirement planning firms are as attuned to the requirements of small business owners better than Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and we have a rich history of helping businesses with their retirement planning needs. We know that your professional and personal aspirations aren’t limited to simple financial figures, and we work tirelessly to provide tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Eugene, OR, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Eugene, OR today.
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Why Eugene, OR Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also provide immediate benefits today. From flexible contributions to substantial tax savings, working with a financial advisor in Eugene, OR 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) provides the freedom to tailor how much you save:
- Customizable Contributions: Set aside more during high-income years and cut back when revenues are down, ensuring your plan works with your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw tax-free later—a smart decision if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Retirement plans for self-employed individuals deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, helping you keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to accumulate.
- State-Specific Incentives: In some states, you might access extra tax breaks as a sole proprietor. These state-level incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax credit of up to 50% of the first $2,000 they contribute 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: Spreading your investments across a mix of asset classes like stocks and bonds can help minimize exposure to risk while still growing your savings.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business ensures you don’t dipping into savings during challenging periods and risking extra costs.
Plan for the Future of Your Eugene, OR Business
Preparing for retirement can assist you prepare for what’s next with your Eugene, OR business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and are not part of the sale. These plans offer the steady income you’ll need later on. It’s important to note that while the sale of a business usually creates a capital gain, deposits into these plans are capped at annual limits (e.g., a maximum of $7,000 for IRAs or as much as $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 might face when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings ensure financial security during the change. You might want to work with a financial advisor who specializes in succession planning and retirement accounts to help with taxes during the sale.
With the right retirement plan, you manage your financial future, reduce your tax burden, and create a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Eugene, OR Now?
There’s no denying that time is one of the most valuable resources when it comes to saving for retirement. Getting a head start not only lets you accumulate a more substantial retirement fund but also lowers the financial burden of saving aggressively in the future. The following are reasons why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings could lead to a substantial impact on the amount you’ll have when you stop working. The primary reason is compound interest—the financial principle where your investments earn returns, and those returns, in turn, accumulate even more returns. The greater time span your money has to grow, the larger the benefit of this growth.
Example: Taylor and Alex are both self-employed individuals. They each aim to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but puts away $7,500 annually to catch up.
By age 65, using a projected 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time can lead to substantial growth. Consider this example showing the power 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 end up with $497,303.29* by age 65.
- Starting at age 35: Saving the same $200 per month would result in 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 less you need to save each year to reach your retirement goals.
*The figures provided in this example are estimates derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. This information is for illustrative purposes only and cannot predict actual future outcomes. Your individual results may differ depending on factors such as market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Eugene, OR, it can be tempting to prioritize reinvesting in your business instead of saving for retirement. That said, initiating a plan now gives you the chance to:
- Leverage growth that is tax-deferred or withdrawals without taxes later on.
- Enjoy adjustable savings that align with your earnings.
- Establish a financial cushion that ensures stability, no matter how your business evolves.
Getting started now, the less you’ll be required to worry about playing catch-up later in life. Building your retirement savings today means managing your financial future and giving yourself the ability to focus on your dreams—both for your retirement years and your Eugene, OR business.
Types of Self-Employed Retirement Plans
There are several retirement savings options available for entrepreneurs in Eugene, OR, each providing its own advantages and considerations. A financial advisor can help you learn about the advantages and disadvantages of each plan and identify the one most suitable for your unique situation. In most cases, your self-employed retirement plan options in Eugene, OR include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans 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 money taken out during retirement are taxable. In contrast, with Roth IRAs, you contribute from post-tax earnings, but qualified withdrawals in retirement, including earnings, are not taxed. In both accounts, withdrawals come without penalties 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 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 offers a way to save for retirement that permits self-employed individuals 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) cannot make additional contributions above 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 have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for entrepreneurs facing periods of inconsistent earnings. In contrast to some alternatives, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs work like traditional IRAs, where the contributions are tax-deferred and money withdrawn is subject to income tax.
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
If you’re self-employed, the contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan designed for businesses with no employees or when the sole employee is your spouse. This type of plan function similarly 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 increased savings potential often come with more restricted investment choices. Using a solo 401(k), you can make either traditional or Roth deferrals, which have the same tax benefits as their IRA contribution counterparts.
Eligibility: Only 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:
- Elective deferrals (as an employee) of up to 100% of your self-employment income, subject to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 for those aged 50 and above, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) cannot exceed 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.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (in 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that provides a pre-established payout to entrepreneurs upon retirement. As opposed to defined contribution plans, a defined benefit plan doesn't fluctuate based on investment returns, but lets individuals clearly understand what they'll get in retirement. This plan is ideal for wealthier self-employed individuals who are focused on saving a large amount for retirement and are prepared to contribute sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income upon retirement.
Eligibility: Any self-employed individual running an owner-only business or with less than five employees may establish an individual defined benefit plan, but it's most commonly recommended for those over 50 who make $250,000 or more annually. Generally, good candidates for defined benefit plans are:
- Business owners or partners who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Organizations that already put in 3-4% with plans to contribute more
- Organizations that have demonstrated consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution must be determined by an actuary using your income, age, and retirement goals. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in Eugene, OR for Your Self-Employed Retirement Plan
Working with a financial advisor in Eugene, OR focused on self-employed retirement strategies can be an invaluable resource for those working for themselves. They offer the knowledge to assist navigate the complexities of retirement planning and design a tailored strategy that reflects your aspirations. An expert in your area will assess where you stand financially, determine how much risk you’re comfortable with, 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
- Customize the plan to your needs even further
- Formalize a plan in writing as required by IRS rules
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan as needed
- Provide ongoing education and advice as you continue on the road to retirement
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Eugene, OR: Correct Capital's Process
Entrepreneurs in Eugene, OR who lack the time, interest, or knowledge to manage their retirement savings strategy independently may end up overwhelmed when faced with their available plans. With Correct Capital, our Eugene, OR financial advisors take on the bulk of your retirement strategy 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 just four steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can help understand if we're suited to your needs for you and your business. This short conversation helps us learn about your needs with no obligation or significant effort on your part.
- Gather Information: Should we agree to proceed, we'll ask for information, including whether you have employees, your current financial situation, and your future objectives. This allows us to put together a personalized strategy suited specifically for your needs.
- Review Your Plan: When we finalize a plan from the information you provide, we'll meet with you and discuss your plan step by step to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can begin contributing. Throughout our relationship, we'll meet with you and review your strategy to keep it tailored to your evolving circumstances.
Our Eugene, OR financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Eugene, OR 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 Eugene, OR
Your business isn't "just a business" to you, and your Eugene, OR financial advisors must deliver more than just good financial guidance. At Correct Capital, we make it a priority to understand our clients and their businesses to deliver personalized self-employed retirement plans. To every client in Eugene, OR, 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, call Correct Capital today at 877-930-401k or contact us online.
