Self-employed retirement plans Fontana, CA. The independence of running your own company in Fontana, CA is one of the best aspects of having a self-directed career. That said, this flexibility sometimes brings with a lack of security, notably in terms of building your retirement fund, since you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off exploring their options. In addition to having a financially stable retirement, seeking advice from a financial advisor in Fontana, CA to create your self-employed retirement plan delivers significant tax advantages that allow both you and your business to thrive.
Few Fontana, CA wealth management and retirement planning firms truly grasp the challenges faced by entrepreneurs as well as Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and we are deeply experienced in supporting entrepreneurs with their retirement planning needs. We recognize that your business and retirement aspirations extend well past basic numbers, 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 Fontana, 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 Fontana, CA today.
Why Fontana, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver tangible benefits today. From flexible contributions to considerable tax savings, working with a financial advisor in Fontana, CA allows you to create your retirement plan to suit your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary from year to year, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to tailor how much you save:
- Customizable Contributions: Save extra during high-income years and scale back when income is lower, so your plan works with your cash flow.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw without tax penalties in the future—a wise move if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) 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, which gives your money more time to accumulate.
- State-Specific Incentives: Based on your location, you may be eligible for state-specific credits as a self-employed individual. These regional incentives help make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax credit of up to 50% of the first $2,000 put into a retirement plan, cutting down 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: Spreading your investments across different asset classes like stocks and bonds serves to mitigate financial risk while still growing your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business prevents you from tapping into your nest egg during financial hardships and risking extra costs.
Plan for the Future of Your Fontana, CA Business
A thoughtful retirement strategy enables you to think through what’s next with your Fontana, CA business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain yours and don’t transfer with the business. These accounts ensure the reliable income you’ll need later on. It’s important to note that while selling your business results in a capital gain, deposits into these plans are subject to yearly maximums (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: Using retirement contributions wisely minimizes the taxes you are required to pay when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts ensure the funds you need during the change. You can also seek advice from a financial advisor experienced in both succession and retirement strategies to help with taxes on the sale.
With the best-fit retirement strategy, you manage your financial future, lower your tax bill, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Fontana, CA Now?
Time is one of the most valuable resources when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a more substantial retirement fund but also reduces the stress of catching up later in life. This is why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings may cause a major impact on the amount you’ll have when you stop working. The biggest reason is compound interest—the concept where your investments grow, and those returns, in turn, accumulate even more returns. The greater time span your money has to grow, the greater the impact of this compounding process.
Example: Alex and Taylor are both self-employed individuals. They each aim to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but saves $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex puts in $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
Small, consistent savings contributed over time often create significant growth. Here’s a simple scenario showing the power of compound interest:
- Starting at age 25: If you invest $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month leaves you with only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
Starting sooner, the lower your annual savings needs each year to meet your retirement goals.
*The figures provided in this example are estimates generated with 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. The scenarios provided are intended as illustrative examples 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 custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Fontana, CA, it is often the case that you prioritize reinvesting in your business rather than saving for retirement. However, beginning a plan now allows you to:
- Leverage tax-deferred growth or penalty-free withdrawals later on.
- Benefit from flexible contributions that align with your cash flow.
- 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 catching up later in life. Saving for retirement now means taking control of your financial future and giving yourself the opportunity to concentrate on your goals—both for your retirement years and your Fontana, CA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for entrepreneurs in Fontana, CA, each offering its own advantages and considerations. A financial advisor is available to help you evaluate the pros and cons of each option and determine the one ideal for your needs. Generally speaking, your self-employed retirement plan options in Fontana, CA consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that provide specific tax advantages. In a standard IRA, the money you contribute is often tax-deductible, and investment earnings grow tax-deferred, but money taken out during retirement are taxed as income. In contrast, Roth IRA contributions are made with after-tax income, but retirement withdrawals that qualify, including earnings, are not taxed. In both cases, withdrawals don’t incur penalties as long as you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, both 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're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs is a retirement plan that allows self-employed individuals 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 more than the 25% you (the employer) already contributed. If you have employees, you are obligated 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. A SEP IRA works well for businesses that experience cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs lack expensive setup or ongoing fees.
SEPs work like conventional IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
Eligibility: Any employer, including the self-employed can open 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 contribution you can make 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 meant for businesses with no employees or if the only employee is your spouse. These plans operate much like traditional employer-managed 401(k) plans, and let you make contributions as both the employer and the employee with pre-tax money. This provides more savings versus SEPs or IRAs; however, the increased savings potential 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 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:
- Employee contributions of up to 100% of your self-employed earnings, up to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you're over 50, or $34,750 for those who turn 60-63 in 2025.
- Contributions as an employer (as an employer) cannot exceed 25% of your net earnings from self-employment, 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 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 fixed, predetermined benefit to self-employed individuals upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but allows self-employed individuals to know what they'll get in retirement. This option is recommended for high-earning entrepreneurs who aim to accumulate a large amount for retirement and can commit to making sizeable contributions. Contributions are tax deferred, and withdrawals incur taxes as income upon 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 most commonly advised for those over 50 who earn at least $250,000 a year. Generally, good candidates for defined benefit plans are:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Businesses currently investing 3-4% and are willing to do more
- Businesses showing consistent profit patterns
- Business leaders over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution is calculated by an actuary based on your income, age, and retirement goals. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Fontana, CA for Your Self-Employed Retirement Plan
Partnering with an advisor in Fontana, CA specialized in self-employed retirement plans serves as an important asset for those working for themselves. They bring the skills needed to guide you through the challenges of retirement planning and design a tailored strategy that reflects your aspirations. An expert in your area will evaluate your financial situation, understand your risk tolerance, and assist you in selecting the best options about saving and investing for retirement. A key part of what we do for you features:
- Assist in selecting a plan that aligns with your objectives and circumstances
- Tailor the plan to fit you personally even further
- Adopt a written plan as required by IRS rules
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Track and fine-tune your plan as needed
- Provide ongoing education and advice as you continue on the road to retirement
- Maximize what you receive in retirement by making the most of your social security
Self-Employed Retirement Plans in Fontana, CA: Correct Capital's Process
Self-employed individuals in Fontana, CA who don’t have the time or expertise to handle their own retirement planning on their own often feel overwhelmed by their choices. At Correct Capital, our Fontana, CA financial advisors take on the majority of your savings plan setup for you, to help 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: It only takes 20 minutes, a member of our advisor team can help understand if we're suited to your needs for you and your business. This brief introduction allows us to get a sense of your goals with no obligation or extensive time commitment on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including how many employees you have (if any), your present financial standing, and your future objectives. This enables us to craft a custom plan suited specifically for your needs.
- Review Your Plan: When we finalize a plan from the information you provide, we'll meet with you and go over your plan step by step to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll put everything in place so you can begin contributing. Over the course of our partnership, we'll check in and monitor your plan to keep it tailored to your evolving circumstances.
Our Fontana, CA financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Fontana, CA include:
- Family Wealth Planning
- 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
Call Correct Capital for Your Self-Employed Retirement Plan in Fontana, CA
Your business isn't "just a business" to you, and your Fontana, CA financial advisors need to offer more than simply sound financial advice. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to provide personalized self-employed retirement plans. All our clients in Fontana, CA benefit from our I.O.U. promise: all guidance we provide 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.
