Self-employed retirement plans Fontana, CA. The freedom of running your own company in Fontana, CA offers many benefits of having a self-directed career. Even so, this freedom sometimes brings with a lack of security, especially when it comes to planning for retirement, 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 looking into other possibilities. In addition to having a more comfortable retirement, partnering with a financial advisor in Fontana, CA to establish your self-employed retirement plan delivers significant tax advantages that enable both you and your business to thrive.
Few Fontana, CA financial advisory and retirement planning firms truly grasp the challenges faced by self-employed individuals quite like 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 we are deeply experienced in assisting business owners in their retirement planning needs. We know that your goals for your business and retirement aren’t limited to just monetary concerns, and we work tirelessly to offer personalized solutions aligned with your vision. Keep reading to learn more 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 speak with a self-employed financial advisor in Fontana, CA today.
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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 real benefits today. From flexible contributions to significant tax savings, partnering with a financial advisor in Fontana, CA helps you design your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) provides the freedom to adjust how much you save:
- Customizable Contributions: Set aside more during high-income years and reduce savings when revenues are down, ensuring your plan aligns with your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw tax-free later—a smart decision if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans provide powerful 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: You won't pay taxes on investment growth until you withdraw it, providing your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you could qualify for state-specific credits as a business owner. These regional incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can take advantage of a 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
Planning for a safe retirement isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Spreading your investments across different asset classes like stocks and bonds is a smart way to minimize exposure to risk while continuing to build your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net prevents you from using your retirement funds during tough times and incurring penalties.
Plan for the Future of Your Fontana, CA Business
A thoughtful retirement strategy also helps you 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 your personal assets and won’t be included in the sale. These accounts offer the reliable income you’ll need during retirement. Keep in mind that while selling your business results in a capital gain, retirement plan contributions are subject to yearly maximums (e.g., up to $7,000 for IRAs or up to $70,000 for Solo 401(k)s, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you are required to pay when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings provide financial security through the transition. You might want to seek advice from a financial advisor experienced in both succession and retirement strategies to reduce taxes during the sale.
With the proper savings strategy, you gain control over your financial future, reduce your tax burden, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Fontana, CA Now?
There’s no denying that time is one of the most crucial factors when it comes to saving for retirement. Getting a head start not only allows you to build a more substantial retirement fund but also minimizes the financial burden of catching up later in life. This is why it is beneficial to start now:
The Cost of Waiting
Waiting to start your retirement fund may cause a substantial impact on the savings you’ll have when you reach retirement age. The main reason is compound interest—the financial principle where your investments generate earnings, and those returns, in turn, earn 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 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 waits until age 40 but saves $7,500 annually to make up for lost time.
By age 65, assuming 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
Regular, modest investments contributed over time may result in substantial growth. Here’s a simple scenario showing the effect of consistent growth:
- Starting at age 25: If you invest $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: Investing 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 less effort required each year to meet your retirement goals.
*These calculations represent estimates generated with NerdWallet’s Compound Interest Calculator, assuming 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 meant to provide general guidance and cannot predict actual future outcomes. Your individual results may differ based on factors such as market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
For self-employed individuals in Fontana, CA, it is often the case that you put more emphasis on reinvesting in your business over saving for retirement. That said, starting a plan now gives you the chance to:
- Leverage growth that is tax-deferred or withdrawals without taxes later on.
- Benefit from adjustable savings that align with your earnings.
- Establish a safety net that ensures stability, no matter how your business evolves.
Starting early, the less you’ll be required to worry about playing catch-up later in life. Building your retirement savings today means gaining control over your financial future and allowing yourself the ability to concentrate on your objectives—both for your golden years and your Fontana, CA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for those working for themselves in Fontana, CA, each offering its own pros and cons. A financial advisor will guide you to evaluate the benefits and drawbacks of each plan and determine the one ideal for your circumstances. Typically, your self-employed retirement plan options in Fontana, CA consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that include key tax perks. In a conventional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but withdrawals in retirement are subject to income tax. In contrast, with Roth IRAs, you contribute from post-tax earnings, but qualified withdrawals in retirement, including earnings, are tax-free. In both accounts, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are available to anyone with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs offers a way to save for retirement that enables those who are self-employed to save a percentage of their net business profits. Contributions are strictly employer contributions an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role more than 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. It's your choice whether to contribute a flat-dollar amount or a percentage of wages to employee accounts. A SEP IRA may be ideal for companies with periods of inconsistent earnings. Compared to other retirement options, SEP IRAs lack expensive setup or ongoing fees.
SEPs function like traditional IRAs, where contributions are made with pre-tax money and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are capped at the lower 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, also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for companies that have no employees or if the only employee is your spouse. This type of plan function similarly to traditional employer-managed 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This allows for more savings than 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 offer the same tax benefits as their IRA contribution counterparts.
Eligibility: Solo 401(k)s are available solely to business owners and their spouses may establish 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:
- 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're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) are limited to 25% of your net self-employment income, which is calculated as net profits less half of your self-employment tax and the employee contributions 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 represents a type of retirement plan that provides a fixed, predetermined benefit to business owners upon retirement. As opposed to defined contribution plans, this plan is not influenced by market performance, but lets individuals clearly understand the precise amount they'll receive in retirement. This plan is best suited for higher-income professionals who are focused on saving a substantial amount for retirement and can commit to making larger deposits. Contributions are tax deferred, and withdrawals incur taxes as income upon retirement.
Eligibility: Entrepreneurs running an owner-only business or with a small staff of under five are eligible to open an individual defined benefit plan, but it's generally advised for individuals aged 50+ who earn at least $250,000 a year. Generally, good candidates for defined benefit plans tend to be:
- Business owners or partners who desire to contribute 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 wish to accelerate savings or boost savings within a short timeframe
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
A financial advisor in Fontana, CA focused on self-employed retirement strategies can be an essential partner for self-employed individuals. They bring the skills needed to understand the intricacies of saving for retirement and craft a customized plan that matches your objectives. A financial advisor in Fontana, CA will review your finances, determine how much risk you’re comfortable with, and help you in making informed decisions about saving and investing for retirement. Included in what we do for you includes:
- Guide you in choosing a plan that suits your unique requirements
- Further adapt the plan to your needs even further
- Create a written plan as required by IRS rules
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Review and modify your plan to keep it aligned with your goals
- Deliver continuous support and financial insights to help you navigate your retirement journey
- 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 aren’t equipped with the time or understanding to oversee their retirement savings strategy themselves can become overwhelmed by their options. Through our team at Correct Capital, our Fontana, CA financial advisors take on the bulk of your savings plan setup for you, working to make meeting your retirement goals as easy as possible for you. We can help you get set up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can determine if we're a good fit for you and your business. This brief introduction allows us to understand what you're looking for with zero commitment or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll gather information, including your employee count, your present financial standing, and your future objectives. This allows us to put together a tailored approach designed just for you.
- Review Your Plan: When we finalize a plan from the information you provide, we'll sit down with you and discuss your plan thoroughly to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll put everything in place so you can begin contributing. Throughout our relationship, we'll meet with you and track your progress to ensure it stays suited to your needs.
Our Fontana, CA financial advisors and retirement plan consultants are fiduciary advisors, which means they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in Fontana, 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 Fontana, CA
To you, your business is more than "just a business", and your Fontana, CA financial advisors need to offer more than basic financial recommendations. With Correct Capital, we make it a priority to understand our clients and their businesses to create personalized self-employed retirement plans. To every client in Fontana, CA, we provide our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To begin on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
