Self-employed retirement plans Fort Wayne, IN. The freedom of owning your own business in Fort Wayne, IN offers many benefits of working for yourself. Even so, this freedom often comes with potential drawbacks, particularly when it comes to retirement savings, since you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, yet countless should consider exploring their options. In addition to having a financially stable retirement, partnering with a financial advisor in Fort Wayne, IN to set up your self-employed retirement plan can provide significant tax advantages that allow your business to grow and succeed.
Few Fort Wayne, IN wealth management 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 are deeply experienced in assisting business owners in their retirement planning needs. We understand that your professional and personal aspirations extend well past just monetary concerns, and we strive to create tailored solutions to meet your unique goals. Read on to discover about your self-employed retirement plan options in Fort Wayne, IN, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Fort Wayne, IN today.
Why Fort Wayne, IN Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also offer real benefits today. From flexible contributions to considerable tax savings, consulting a financial advisor in Fort Wayne, IN enables you to create your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) offers the option to adjust how much you save:
- Customizable Contributions: Save extra during high-income years and cut back when income is lower, so that your plan works with your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, allowing 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
Self-employed retirement plans deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, so you can keep more of your earnings.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, giving your money more time to compound.
- State-Specific Incentives: In some states, you could qualify for state-specific tax breaks as a self-employed individual. These state-level incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a credit of up to 50% of the first $2,000 contributed a retirement plan, further reducing 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 determined by your investment strategy:
- Diversified Portfolios: Allocating your investments across different asset classes like stocks and bonds can help minimize exposure to risk while continuing to build your nest egg.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business ensures you don’t tapping into your nest egg during tough times and incurring penalties.
Plan for the Future of Your Fort Wayne, IN Business
A thoughtful retirement strategy can assist you think through what’s next with your Fort Wayne, IN business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and don’t transfer with the business. These accounts can provide the steady income you’ll need later on. It’s important to note that while the sale of a business usually creates a capital gain, retirement plan contributions are capped at annual limits (e.g., up to $7,000 for IRAs or up to $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Strategically planning your contributions helps lower the taxes you might face when you pass on your business.
- Succession Planning: If you’re passing the business on, your retirement accounts provide the funds you need through the transition. You may also work with a financial advisor who specializes in succession planning and retirement accounts to help with taxes on the sale.
With the best-fit retirement strategy, you gain control over your financial future, reduce your tax burden, and build a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Fort Wayne, IN Now?
Time remains one of the most valuable resources in retirement planning. Starting early not only allows you to build a bigger financial cushion but also minimizes the financial burden of catching up later in life. The following are reasons why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement could lead to a major impact on the amount you’ll have when you retire. The primary reason is compound interest—the powerful process where your investments generate earnings, and those returns, in turn, earn even more returns. The longer your money has to grow, the more significant the benefit of this growth.
Example: Two individuals, Alex and Taylor are both self-employed professionals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor waits until age 40 but puts away $7,500 annually to make up for lost time.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time can lead to impressive growth. Consider this example showing the effect of compounding:
- Starting at age 25: By investing $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: Saving the same $200 per month leaves you with 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 reach your retirement goals.
*These calculations are estimates derived from 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 cannot predict actual future outcomes. Your individual results may differ based on elements like market conditions, fees, and your unique situation. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in Fort Wayne, IN, it can be tempting to focus more on reinvesting in your business over saving for retirement. However, starting a plan now gives you the chance to:
- Benefit from tax-deferred growth or tax-free withdrawals later on.
- Benefit from adjustable savings that adapt to your earnings.
- Establish a financial cushion that provides security, no matter how your business changes.
Starting early, the less you’ll have to worry about making up for lost time later in life. Taking steps toward your retirement goals today means gaining control over your financial future and giving yourself the opportunity to focus on your dreams—both for your golden years and your Fort Wayne, IN business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for those working for themselves in Fort Wayne, IN, each with its own benefits and trade-offs. A financial advisor is available to help you learn about the advantages and disadvantages of each plan and choose the one most suitable for your circumstances. Generally speaking, your self-employed retirement plan options in Fort Wayne, IN include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that offer key tax perks. In a standard IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but withdrawals in retirement are taxable. In contrast, with Roth IRAs, you contribute from post-tax earnings, but retirement withdrawals that qualify, including earnings, are tax-free. In both accounts, withdrawals don’t incur penalties if 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 capped at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA serves as a retirement savings option 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) cannot make additional contributions 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 have the flexibility to contribute a fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA may be ideal for companies with fluctuating revenue streams. In contrast to some alternatives, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs work 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 set up 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 allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed meant for businesses without employees or when the sole employee is your spouse. Solo 401(k)s are similar to employer-sponsored 401(k) plans, and allow you to contribute as both an employee or an employer with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the additional opportunities may be offset by more restricted investment choices. 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 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 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. The contribution limits for 2025 include $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 calculated as net profits less half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for individuals aged 50+ (in 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans offers a structured retirement solution that guarantees a fixed, predetermined benefit to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but allows self-employed individuals to know the precise amount they'll have in retirement. This option is best suited for high-earning professionals who aim to accumulate a large amount for retirement and can commit to making substantial contributions. Contributions are tax deferred, and withdrawals are taxed as income during retirement.
Eligibility: Any self-employed individual managing a one-person company or with less than five employees may establish an individual defined benefit plan, but it's most commonly advised for those over 50 who make $250,000 or more annually. In most cases, good candidates for defined benefit plans tend to be:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% and are willing to do more
- Companies showing consistent profit patterns
- Business leaders over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The contribution limit is calculated by an actuary determined by your financial situation, age, and savings targets. Contribution limits change annually.
The Importance of a Financial Advisor in Fort Wayne, IN for Your Self-Employed Retirement Plan
Working with a financial advisor in Fort Wayne, IN focused on self-employed retirement strategies serves as an important asset for self-employed individuals. They have the expertise to help navigate the complexities of retirement planning and develop a personalized approach that aligns with your goals. Your advisor in Fort Wayne, IN will review your finances, understand your risk tolerance, and assist you in choosing wisely about saving and investing for retirement. A key part of what we do for you involves:
- Assist in selecting a plan that best fits your needs and goals
- Tailor the plan to fit you personally even further
- Formalize a plan in writing that complies with IRS regulations
- Set up an asset trust plan
- Help you understand the plan's terms
- Monitor and adjust your plan to keep it aligned with your goals
- Deliver continuous support and financial insights throughout your retirement planning process
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Fort Wayne, IN: Correct Capital's Process
Entrepreneurs in Fort Wayne, IN who don’t have the time or expertise to oversee their retirement savings strategy themselves often feel overwhelmed by their options. At Correct Capital, our Fort Wayne, IN financial advisors take on the bulk of your savings plan setup for you, working to make meeting your future savings targets as easy as possible for you. We can help you get set up your self-employed retirement plan in four simple steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can determine if we're suited to your needs for you and your business. This initial call helps us learn about your needs with no obligation or major time investment on your part.
- Gather Information: Should we agree to proceed, we'll request information, including your employee count, your present financial standing, and your retirement goals. This helps us create a custom plan that aligns with your goals.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll schedule a meeting and review your plan thoroughly to ensure you understand it and understand how it best correlates to your needs.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can start saving. Throughout our relationship, we'll have regular meetings and track your progress to ensure it stays suited to your needs.
Our Fort Wayne, IN financial advisors and retirement plan consultants serve as 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 Fort Wayne, IN include:
- Investment Management
- 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 Wayne, IN
Your business isn't "just a business" to you, and your Fort Wayne, IN 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. All our clients in Fort Wayne, IN benefit from our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
