Self-employed retirement plans Fort Collins, CO. The freedom of owning your own business in Fort Collins, CO offers many benefits of being self-employed. Even so, this freedom sometimes brings with certain challenges, notably in terms of building your retirement fund, because you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many could benefit from understanding their retirement options. In addition to enjoying a more comfortable retirement, seeking advice from a financial advisor in Fort Collins, CO to create your self-employed retirement plan offers significant tax advantages that help both you and your business to thrive.
Few Fort Collins, CO financial advisory and retirement planning firms are as attuned to the requirements of entrepreneurs as well as Correct Capital. Our founder's father was a small business owner himself (read more of our story here), and we take pride in helping businesses with their retirement planning needs. We understand that your business and retirement aspirations go far beyond just monetary concerns, and we strive to create personalized solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Fort Collins, CO, 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 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 deliver real benefits today. With customizable contribution options to considerable tax savings, consulting a financial advisor in Fort Collins, CO allows you to create your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
For those with fluctuating income over time, 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 cut back when revenues are down, so that your plan fits your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, so you can withdraw without tax penalties in the future—a smart decision if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, so you can keep more of your earnings.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, which gives your money more time to grow.
- State-Specific Incentives: Based on your location, you may be eligible for state-specific tax breaks as a business owner. These regional incentives can make these plans even more valuable.
- 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, 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 is a smart way to mitigate financial risk while continuing to build your retirement fund.
- 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
A thoughtful retirement strategy also helps you plan ahead for what’s next with your Fort Collins, CO business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and don’t transfer with the business. These accounts offer the reliable income you’ll need during retirement. Keep in mind that while the sale of a business usually creates a capital gain, contributions to retirement accounts are capped at annual limits (e.g., a maximum of $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: Strategically planning your contributions can reduce the taxes you might face when you pass on your business.
- Succession Planning: For those winding down or handing over their business, your nest egg offer a stable foundation through the transition. You may also seek advice from a financial advisor experienced in both succession and retirement strategies to reduce taxes on the sale.
With the proper savings strategy, you can take control of your financial future, reduce your tax burden, and establish a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Fort Collins, CO Now?
There’s no denying that time is one of the most important resources for building your retirement fund. Getting a head start not only lets you accumulate a more substantial retirement fund but also lowers the pressure of playing catch-up as you get older. The following are reasons why it is beneficial to start now:
The Cost of Waiting
Delaying your retirement savings could lead to a substantial impact on the savings you’ll have when you stop working. The main reason is compound interest—the powerful process where your investments earn returns, and those returns, in turn, generate even more returns. The longer your money has to grow, the more significant the benefit of this growth.
Example: Taylor and Alex are both entrepreneurs. Their shared goal is to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor delays savings until age 40 but saves $7,500 annually to make up for lost time.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings invested steadily can lead to significant growth. Consider this example showing the effect of consistent growth:
- Starting at age 25: If you invest $200 per month in a retirement plan with an average annual return of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Saving the same $200 per month would result in only $235,412.97* by age 65—a difference of over $260,000, all because of a 10-year delay.
Starting sooner, the lower your annual savings needs each year to achieve your retirement goals.
*These calculations represent estimates derived from NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is intended as illustrative examples and cannot predict actual future outcomes. Actual results may vary depending on variables including market conditions, fees, and personal factors. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Fort Collins, CO, it can be tempting to put more emphasis on reinvesting in your business instead of saving for retirement. That said, beginning a plan now allows you to:
- Benefit from growth that is tax-deferred or withdrawals without taxes in the future.
- Enjoy flexible contributions that adapt to your cash flow.
- Build a financial cushion that ensures stability, no matter how your business develops.
The sooner you start, the less you’ll have to worry about playing catch-up later in life. Taking steps toward your retirement goals today means taking control of your financial future and giving yourself the ability to focus on your goals—both for your retirement years and your Fort Collins, CO business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for entrepreneurs in Fort Collins, CO, each with its own pros and cons. A financial advisor will guide you to evaluate the pros and cons of each choice and choose the one most suitable for your needs. In most cases, your self-employed retirement plan options in Fort Collins, CO consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that provide key tax perks. In a conventional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are taxable. In contrast, Roth IRAs require contributions using income already taxed, but qualified withdrawals in retirement, including earnings, are tax-free. In both cases, withdrawals come without 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 accessible for individuals with a source of income.
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: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that allows self-employed individuals to save a percentage of their net business profits. 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) allocate. If you have employees, you must 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. This type of plan works well for companies with fluctuating revenue streams. Unlike other plans, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs operate like standard IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can open 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 amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed meant for businesses without employees or if the only employee is your spouse. This type of plan are similar to standard 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This offers more savings compared to SEPs or IRAs; however, the increased savings potential may be offset by more constrained investment avenues. With this type of plan, you can make either traditional or Roth deferrals, which have 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: For self-employed individuals 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-employed earnings, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Employer profit-sharing contributions (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 individuals aged 50+ (in 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan is a retirement option that provides a set amount 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 option is ideal for wealthier entrepreneurs who are focused on saving a significant sum for retirement and are prepared to contribute sizeable contributions. Contributions are tax deferred, and withdrawals are taxable as income during 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 most commonly suggested for individuals aged 50+ who earn at least $250,000 a year. Generally, good candidates for defined benefit plans tend to be:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Organizations that already put in 3-4% but are open to increasing contributions
- Organizations with proven consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution requires calculation from an actuary based on your earnings, age, and retirement objectives. Contribution limits change annually.
The Importance of a Financial Advisor in Fort Collins, CO for Your Self-Employed Retirement Plan
Partnering with an advisor in Fort Collins, CO experienced with retirement plans for the self-employed is an invaluable resource for self-employed individuals. They have the expertise to help understand the intricacies of saving for retirement and design a customized plan that aligns with your goals. Your advisor in Fort Collins, CO will review your finances, identify your risk preferences, and assist you in making informed decisions about saving and investing for retirement. A key part of what we do for you features:
- Help you choose a plan that suits your unique requirements
- Further adapt the plan to your specific situation even further
- Adopt a written plan in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Ensure you comprehend the plan's terms
- Track and fine-tune your plan when necessary
- Offer continued financial education and guidance to help you navigate your retirement journey
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Fort Collins, CO: Correct Capital's Process
Fort Collins, CO business owners who aren’t equipped with the time or understanding to handle their own retirement planning themselves may end up overwhelmed by their options. At Correct Capital, our Fort Collins, CO financial advisors take on the lion's share of your retirement planning 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 we're suited to your needs for you and your business. This brief introduction lets us get a sense of your goals with no pressure or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including your employee count, your present financial standing, and your future objectives. This helps us create a custom plan that aligns with your goals.
- Review Your Plan: After we put together a plan from the information you provide, we'll sit down with you and discuss your plan thoroughly to help you fully grasp it and understand how it best correlates to your needs.
- Implementation and Monitoring: After we agree on your plan, we'll implement the necessary steps so you can begin contributing. Throughout our relationship, we'll have regular meetings and monitor your plan to make sure it remains aligned with your goals.
Our Fort Collins, CO financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are committed by law and ethics to act in your best interest.
Other financial advisory services we offer in Fort Collins, CO include:
- 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
- High-Net-Worth Wealth Management
Call Correct Capital for Your Self-Employed Retirement Plan in Fort Collins, CO
You don't see your business as "just a business", and your Fort Collins, CO financial advisors need to offer more than basic financial recommendations. At Correct Capital, we make it a priority to understand our clients and their businesses to create tailored self-employed retirement plans. We offer all our Fort Collins, CO clients our I.O.U. promise: everything we recommend 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.
