Self-employed retirement plans Eugene, OR. The independence of owning your own business in Eugene, OR offers many benefits of being self-employed. That said, this independence can come with potential drawbacks, notably when it comes to retirement savings, since you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from exploring their options. In addition to achieving a more comfortable retirement, partnering with a financial advisor in Eugene, OR to set up your self-employed retirement plan offers significant tax advantages that help you to move your business forward.
Few Eugene, OR investment consulting and retirement planning firms truly grasp the challenges faced by small business owners as well as Correct Capital. Our founder's father was a small business owner himself (learn more about our story here), and our firm have a rich history of supporting entrepreneurs with their retirement planning needs. We know that your business and retirement aspirations extend well past just monetary concerns, and we are dedicated to provide tailored solutions to meet your unique goals. Read on to discover about your self-employed retirement plan options in Eugene, OR, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Eugene, OR today.
Why Eugene, OR Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also offer immediate benefits today. Offering flexibility in contributions to significant tax savings, partnering with a financial advisor in Eugene, OR allows you to design your retirement plan to align with your unique financial situation.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) provides the freedom to tailor how much you save:
- Customizable Contributions: Save extra during profitable years and cut back when revenues are down, so your plan aligns with your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw tax-free later—an advantageous choice if you anticipate 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 Solo 401(k) lower your taxable income, so you can keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to grow.
- State-Specific Incentives: Based on your location, you might access additional credits as a sole proprietor. These regional incentives can make these plans even more beneficial.
- 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, further reducing 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 determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across a mix of asset classes like stocks and bonds can help mitigate financial risk while still growing your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business ensures you don’t tapping into your nest egg during financial hardships and incurring penalties.
Plan for the Future of Your Eugene, OR Business
A thoughtful retirement strategy 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 remain your personal assets and won’t be included in the sale. These accounts offer the steady income you’ll need in the future. It’s important to note that while selling your business results in 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 minimizes the taxes you are required to pay when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings ensure financial security as you make this shift. You may also seek advice from a financial advisor who specializes in succession planning and retirement accounts to reduce taxes on the sale.
With the proper savings strategy, you can take control of your financial future, lower your tax bill, and create a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Eugene, OR Now?
Time is one of the most crucial resources for building your retirement fund. Starting early not only lets you accumulate a more substantial retirement fund but also reduces the financial burden of catching up later in life. The following are reasons why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement can have a significant impact on the amount you’ll have when you reach retirement age. The biggest reason is compound interest—the concept where your investments earn returns, and those returns, then, generate even more returns. The more time your money has to grow, the greater the impact of this compounding process.
Example: Alex and Taylor are both entrepreneurs. Both of them want 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, assuming 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but achieves a total of only $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 compound interest:
- Starting at age 25: By investing $200 per month in a retirement plan with an projected return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Saving the same $200 per month leaves you with only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
Saving early, the lower your annual savings needs each year to meet your retirement goals.
*These calculations are based on 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 intended as illustrative examples and are not a promise of future results. Your individual results may differ based on variables including market conditions, fees, and personal factors. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Eugene, OR, it might seem easier to prioritize reinvesting in your business over saving for retirement. Even so, starting a plan now gives you the chance to:
- Benefit from growth that is tax-deferred or tax-free withdrawals in the future.
- Benefit from flexible contributions that align with your income.
- Create a safety net that offers peace of mind, no matter how your business develops.
Starting early, the less you’ll need to worry about catching up later in life. Saving for retirement now means managing your financial future and creating for yourself the opportunity to concentrate on your objectives—both for your golden years and your Eugene, OR business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for entrepreneurs in Eugene, OR, each providing its own pros and cons. A financial advisor is available to help you learn about the pros and cons of each plan and choose the one ideal for your circumstances. Generally speaking, your self-employed retirement plan options in Eugene, OR include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that offer distinct tax benefits. In a traditional IRA, you can usually deduct your contributions from taxable income, and returns grow free of current taxes, but withdrawals in retirement are subject to income tax. In contrast, Roth IRAs require contributions using income already taxed, but qualified withdrawals in retirement, including earnings, are not taxed. In both types of accounts, withdrawals come without penalties if you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are available to anyone 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: SEP IRAs offers a way to save for retirement that permits entrepreneurs to set aside a portion of their self-employment income. Contributions must come from an employer, so, as a sole proprietor, you (the employee) cannot make additional contributions above the 25% you (the employer) already contributed. If you have employees, it's required to 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. SEP IRAs may be ideal for entrepreneurs facing fluctuating revenue streams. Unlike other plans, SEP IRAs lack expensive setup or ongoing fees.
SEPs operate like conventional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Employers of any type, including self-employed individuals can set up 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 amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan designed for businesses with no employees or where the only employee is a spouse. Solo 401(k)s operate much like traditional employer-managed 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the extra savings options often come with more constrained investment avenues. 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 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 have the ability to make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employment income, capped at the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you are 50 or older, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) cannot exceed 25% of your adjusted self-employment income, which is defined as net profit minus half of your self-employment tax and the deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 if you're over age 50 (in 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan offers a structured retirement solution that guarantees a pre-established payout to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, this plan is not influenced by market performance, but enables participants to determine what they'll have in retirement. This strategy is ideal for high-earning professionals who aim to accumulate a substantial amount for retirement and can commit to making larger deposits. Contributions are tax deferred, and withdrawals are taxable as income in retirement.
Eligibility: Any self-employed individual managing a one-person company or with a small staff of under five can open an individual defined benefit plan, but it's typically advised for individuals aged 50+ who make $250,000 or more annually. Typically, good candidates for defined benefit plans include:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 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 cap on contributions requires calculation from an actuary using your financial situation, age, and savings targets. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Eugene, OR for Your Self-Employed Retirement Plan
A financial advisor in Eugene, OR focused on self-employed retirement strategies can be an invaluable resource for entrepreneurs. They offer the knowledge to assist navigate the complexities of retirement planning and craft a customized plan that aligns with your goals. Your advisor in Eugene, OR will review your finances, identify your risk preferences, and assist you in making informed decisions about saving and investing for retirement. Part of what we do for you features:
- Help you choose a plan that aligns with your objectives and circumstances
- Further adapt the plan to your specific situation even further
- Create a written plan as required by IRS rules
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Monitor and adjust your plan as needed
- Deliver continuous support and financial insights to help you navigate your retirement journey
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Eugene, OR: Correct Capital's Process
Entrepreneurs in Eugene, OR who aren’t equipped with the time or understanding to handle their retirement savings strategy on their own often feel overwhelmed by their available plans. With Correct Capital, our Eugene, OR financial advisors take on the bulk of your savings plan setup for you, working to make meeting your financial objectives as hassle-free as possible for you. We can help you get set 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 can help understand if we're a good fit for you and your business. This initial call helps us understand what you're looking for with no pressure or significant effort on your part.
- Gather Information: Should we agree to proceed, we'll request information, including your employee count, your current financial situation, and your retirement goals. This enables us to craft 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 review your plan step by step to ensure you understand it and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can initiate your savings journey. As time goes on, we'll have regular meetings and track your progress to make sure it remains aligned with your goals.
Our Eugene, OR financial advisors and retirement plan consultants act as 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 Eugene, OR include:
- 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 Eugene, OR
Your business isn't "just a business" to you, and your Eugene, OR financial advisors should provide more than basic financial recommendations. With Correct Capital, we focus on building a relationship with our clients and their businesses to deliver tailored self-employed retirement plans. To every client in Eugene, OR, we provide our I.O.U. promise: everything we recommend 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.
