Self-employed retirement plans Fort Collins, CO. The independence of running your own company in Fort Collins, CO offers many benefits of being self-employed. Even so, this independence sometimes brings with a lack of security, particularly in terms of planning for retirement, because you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off understanding their retirement options. In addition to enjoying a financially stable retirement, seeking advice from a financial advisor in Fort Collins, CO to create your self-employed retirement plan can provide significant tax advantages that allow both you and your business to thrive.
Few Fort Collins, CO investment consulting and retirement planning firms are as attuned to the requirements of self-employed individuals quite like Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and Correct Capital take pride in assisting business owners in their retirement planning needs. We recognize that your business and retirement aspirations extend well past just monetary concerns, and we work tirelessly to offer personalized solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Fort Collins, CO, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Fort Collins, CO today.
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Why Fort Collins, CO Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver tangible benefits today. Offering flexibility in contributions to substantial tax savings, working with a financial advisor in Fort Collins, CO enables you to design your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) offers the freedom to adjust how much you save:
- Customizable Contributions: Set aside more during high-income years and reduce savings when your earnings dip, so your plan works with your cash flow.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw your savings tax-free down the road—a smart decision if you expect your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, allowing you to keep more of your earnings.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to compound.
- State-Specific Incentives: Depending on where you live, you may be eligible for additional credits as a business owner. These local incentives can make these plans even more advantageous.
- 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 contributed a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement goes beyond just how much you save—it’s also about how you invest:
- Diversified Portfolios: Allocating your investments across different stocks, bonds, and alternatives serves to mitigate financial risk while continuing to build your savings.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business prevents you from using your retirement funds during challenging periods and facing tax penalties.
Plan for the Future of Your Fort Collins, CO Business
Preparing for retirement enables you to think through what’s next with your Fort Collins, CO business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s stay in your name and don’t transfer with the business. These accounts offer the financial stability you’ll need during retirement. Remember that while the sale of a business usually creates a capital gain, retirement plan contributions are restricted by contribution limits (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you might face when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts offer financial security as you make this shift. You can also partner with a financial advisor with expertise in succession and retirement planning to help with taxes on the sale.
With the proper savings strategy, you can take control of your financial future, cut down your tax obligations, and establish a strong framework 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 valuable factors for building your retirement fund. Starting early not only helps you grow a more substantial retirement fund but also minimizes the stress of catching up later in life. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement could lead to a substantial impact on the amount you’ll have when you stop working. The primary reason is compound interest—the concept where your investments grow, and those returns, then, accumulate even more returns. The greater time span your money has to grow, the more significant the benefit of compounding.
Example: Taylor and Alex are both self-employed professionals. They each aim to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor delays savings until age 40 but saves $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex puts in $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments invested steadily often create substantial growth. Take a look at this scenario 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 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 difference of over $260,000, just from a 10-year delay.
Saving early, the less you need to save each year to reach your retirement goals.
*These calculations are estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are meant to provide general guidance and are not a promise of future results. Your individual results may differ based on variables including market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Fort Collins, CO, it is often the case that you prioritize reinvesting in your business rather than saving for retirement. However, beginning a plan now enables you to:
- Leverage tax-deferred growth or penalty-free withdrawals later on.
- Take advantage of flexible contributions that adapt to your earnings.
- Build a long-term safety measure that ensures stability, no matter how your business develops.
The sooner you start, the less you’ll be required to worry about making up for lost time later in life. Building your retirement savings today means managing your financial future and creating for yourself the opportunity to concentrate on your goals—both for your retirement years and your Fort Collins, CO business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for those working for themselves in Fort Collins, CO, each offering its own advantages and considerations. A financial advisor can help you understand the benefits and drawbacks of each choice and determine the one best suited for your circumstances. Typically, your self-employed retirement plan options in Fort Collins, CO include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that include specific tax advantages. In a traditional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but money taken out during retirement are taxable. In contrast, with Roth IRAs, you contribute from post-tax earnings, but retirement withdrawals that qualify, including earnings, are not taxed. In both cases, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are available to anyone with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped 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 permits self-employed individuals to contribute a percentage of their net earnings. Contributions can only be made by 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. It's your choice whether to contribute a set monetary value or a percentage of wages to employee accounts. SEP IRAs may be ideal for companies with cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs function like conventional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed can set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the allowable contribution 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 intended for businesses with no employees or when the sole employee is your spouse. Solo 401(k)s are similar to standard 401(k) plans, and let you make contributions as both the employer and the employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the additional opportunities may be offset by more constrained investment avenues. Using a solo 401(k), 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: If you are self-employed 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-employed earnings, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 for those who turn 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your adjusted self-employment income, which is your 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 individuals aged 50+ (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that guarantees a fixed, predetermined benefit to business owners upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but enables participants to determine what they'll receive in retirement. This strategy is best suited for higher-income entrepreneurs who aim to accumulate a substantial amount for retirement and are willing to make sizeable contributions. Contributions offer tax-deferred growth, and withdrawals are taxable as income in retirement.
Eligibility: Self-employed professionals running an owner-only business or with a small staff of under five can open an individual defined benefit plan, but it's most commonly advised for individuals aged 50+ who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans tend to be:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% with plans to contribute more
- Companies with proven consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The cap on contributions is calculated by an actuary using your financial situation, age, and savings targets. Contribution limits change annually.
The Importance of a Financial Advisor in Fort Collins, CO for Your Self-Employed Retirement Plan
Working with a financial advisor in Fort Collins, CO specialized in self-employed retirement plans serves as an important asset for self-employed individuals. They offer the knowledge to assist guide you through the challenges of retirement planning and design a tailored strategy that aligns with your goals. Your advisor in Fort Collins, CO will assess where you stand financially, understand your risk tolerance, and assist you in making informed decisions about saving and investing for retirement. A key part of what we do for you includes:
- Assist in selecting a plan that aligns with your objectives and circumstances
- Customize the plan to your needs even further
- Adopt a written plan as required by IRS rules
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Track and fine-tune your plan to keep it aligned with your goals
- Provide ongoing education and advice throughout your retirement planning process
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Fort Collins, CO: Correct Capital's Process
Self-employed individuals in Fort Collins, CO who aren’t equipped with the time or understanding to handle their retirement savings strategy independently can become overwhelmed by their available plans. At Correct Capital, our Fort Collins, CO financial advisors manage the lion's share of your retirement strategy for you, working to make meeting your retirement goals as hassle-free as possible for you. We are here to assist you in setting 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 will assess if our services align for you and your business. This brief introduction allows us to get a sense of your goals with zero commitment or extensive time commitment on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including how many employees you have (if any), your current financial situation, and your future objectives. This enables us to craft a tailored approach suited specifically for your needs.
- Review Your Plan: When we finalize a plan using the information you provide, we'll schedule a meeting and go over your plan step by step to help you fully grasp 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 initiate your savings journey. Throughout our relationship, we'll check in and track your progress to keep it tailored to your evolving circumstances.
Our Fort Collins, CO financial advisors and retirement plan consultants are fiduciary advisors, meaning they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Fort Collins, CO 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 Fort Collins, CO
Your business isn't "just a business" to you, and your Fort Collins, CO financial advisors need to offer more than basic financial recommendations. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to create customized self-employed retirement plans. To every client in Fort Collins, CO, 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.
