Self-employed retirement plans Fort Collins, CO. The independence of owning your own business in Fort Collins, CO offers many benefits of working for yourself. That said, this flexibility can come with potential drawbacks, notably when it comes to building your retirement fund, as you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off understanding their retirement options. In addition to achieving a more comfortable retirement, partnering with a financial advisor in Fort Collins, CO to set up your self-employed retirement plan can provide significant tax advantages that help both you and your business to thrive.
Few Fort Collins, CO investment consulting and retirement planning firms understand the needs of entrepreneurs as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (check out our story here), and our firm are deeply experienced in assisting business owners in their retirement planning needs. We recognize that your professional and personal aspirations extend well past just monetary concerns, and we are dedicated to provide customized solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Fort Collins, CO, or call Correct Capital at 877-930-401k or contact us online to talk to a small business financial advisor in Fort Collins, CO today.
Why Fort Collins, CO 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. With customizable contribution options to substantial tax savings, consulting a financial advisor in Fort Collins, CO allows you to design your retirement plan to suit your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary annually, 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 successful years and reduce savings when income is lower, so that your plan aligns with your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw your savings tax-free down the road—a smart decision if you believe your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, 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 grow.
- State-Specific Incentives: Depending on where you live, you could qualify for additional credits as a business owner. These state-level incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can take advantage of a credit of up to 50% of the first $2,000 put into a retirement plan, helping to lower 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: Distributing your investments across varied stocks, bonds, and alternatives serves to reduce risk while still growing your savings.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund ensures you don’t using your retirement funds during challenging periods and risking extra costs.
Plan for the Future of Your Fort Collins, CO Business
A thoughtful retirement strategy enables you to plan ahead for what’s next with your Fort Collins, CO business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and won’t be included in the sale. These accounts can provide the reliable income you’ll need in the future. It’s important to note that while selling your business results in a capital gain, retirement plan contributions are capped at annual limits (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you might face when you pass on your business.
- Succession Planning: If you’re passing the business on, your retirement savings provide financial security through the transition. You might want to seek advice from a financial advisor with expertise in succession and retirement planning to minimize tax burdens during the sale.
With the right retirement plan, you manage your financial future, cut down your tax obligations, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Fort Collins, CO Now?
Time is one of the most crucial resources in retirement planning. Beginning sooner rather than later not only helps you grow a larger nest egg but also reduces the stress of playing catch-up as you get older. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement may cause a substantial impact on the total you’ll have when you retire. The primary reason is compound interest—the financial principle where your investments generate earnings, and those returns, then, generate even more returns. The greater time span your money has to grow, the larger the benefit of this growth.
Example: Alex and Taylor are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but saves $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex contributes $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 made consistently often create significant growth. Consider this example showing the impact of consistent growth:
- Starting at age 25: Putting aside $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: Contributing the same $200 per month yields only $235,412.97* by age 65—a gap of over $260,000, simply due to a 10-year delay.
Starting sooner, the less you need to save each year to meet your retirement goals.
*The figures provided in this example are estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. These examples are meant to provide general guidance and are not a promise of future results. Actual results may vary due to elements like market conditions, fees, and personal factors. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
For self-employed individuals in Fort Collins, CO, it is often the case that you focus more on reinvesting in your business rather than saving for retirement. However, beginning a plan now allows you to:
- Take advantage of growth that is tax-deferred or penalty-free withdrawals down the road.
- Take advantage of adjustable savings that adapt to your earnings.
- Establish a long-term safety measure that offers peace of mind, no matter how your business develops.
The sooner you start, the less you’ll have to worry about making up for lost time later in life. Taking steps toward your retirement goals today means managing your financial future and giving yourself the freedom to concentrate on your objectives—both for your golden years and your Fort Collins, CO business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for those working for themselves in Fort Collins, CO, each with its own benefits and trade-offs. A financial advisor can help you evaluate the benefits and drawbacks of each option and identify the one most suitable for your unique situation. Typically, your self-employed retirement plan options in Fort Collins, CO consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that offer specific tax advantages. 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 subject to income tax. In contrast, with Roth IRAs, you contribute are made with after-tax income, 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: Unlike plans linked to your job, both traditional and Roth IRAs are accessible for individuals with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA is a retirement plan that enables self-employed individuals to save a percentage of their net business profits. Contributions must come from an employer, so, as a sole proprietor, 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 fixed dollar figure or a percentage of wages to employee accounts. SEP IRAs may be ideal for companies with periods of inconsistent earnings. Compared to other retirement options, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs operate like traditional IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
Eligibility: Both employers and self-employed individuals can establish 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
For self-employed individuals, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan meant for businesses without employees or if the only employee is your spouse. These plans operate much like traditional employer-managed 401(k) plans, and allow you to contribute as both an employer and an employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the increased savings potential often come with more constrained investment avenues. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which offer 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. For 2025, the limits will be $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 60-63 in 2025.
- Contributions as an employer (as an employer) must not surpass 25% of your net earnings from self-employment, which is calculated as net profits less half of your self-employment tax and the elective deferrals you made.
The total contribution cannot exceed $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 pre-established payout to self-employed individuals upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but enables participants to determine exactly how much they'll receive in retirement. This strategy is ideal for high-earning professionals who aim to accumulate a substantial amount for retirement and are prepared to contribute larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxable as income during retirement.
Eligibility: Entrepreneurs managing a one-person company or with a small staff of under five are eligible to open an individual defined benefit plan, but it's most commonly suggested for people above age 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans tend to be:
- 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 with proven consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The contribution limit must be determined by an actuary based on your earnings, age, and retirement objectives. Allowable contributions are adjusted each year.
The Importance of a Financial Advisor in Fort Collins, CO for Your Self-Employed Retirement Plan
A financial advisor in Fort Collins, CO experienced with retirement plans for the self-employed can be an important asset for those working for themselves. They bring the skills needed to navigate the complexities of retirement planning and design a tailored strategy that reflects your aspirations. Your advisor in Fort Collins, CO will evaluate your financial situation, understand your risk tolerance, and help you in choosing wisely about saving and investing for retirement. A key part of what we do for you includes:
- Assist in selecting a plan that suits your unique requirements
- Customize the plan to your specific situation even further
- Formalize a plan in writing that complies with IRS regulations
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Track and fine-tune your plan when necessary
- Provide ongoing education and advice as you continue on the road to retirement
- Boost your retirement earnings by optimizing your social security benefits
Self-Employed Retirement Plans in Fort Collins, CO: Correct Capital's Process
Fort Collins, CO business owners who don’t have the time or expertise to handle their own retirement planning on their own may end up overwhelmed when faced with their available plans. Through our team at Correct Capital, our Fort Collins, CO financial advisors take on the lion's share of your retirement planning for you, and strive to ensure meeting your financial objectives as easy as possible for you. We will guide you in creating your self-employed retirement plan in four simple steps:
- Schedule a Call: It only takes 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 get a sense of your goals with no pressure or extensive time commitment on your part.
- Gather Information: Should we agree to proceed, we'll ask for information, including your employee count, your current financial situation, and your long-term savings targets. This enables us to craft a custom plan designed just for you.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll schedule a meeting and review your plan in detail 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 put everything in place so you can begin contributing. As time goes on, we'll meet with you and monitor your plan to ensure it stays suited to your needs.
Our Fort Collins, CO financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are required by law and ethical standards to prioritize your needs above all else.
Other financial advisory services we offer in Fort Collins, CO include:
- Retirement Financial Planning
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Call Correct Capital for Your Self-Employed Retirement Plan in Fort Collins, CO
To you, your business is more than "just a business", and your Fort Collins, CO financial advisors must deliver more than simply sound financial advice. With Correct Capital, we take the time to get to know our clients and their businesses to provide personalized self-employed retirement plans. To every client in Fort Collins, CO, we provide our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
