Self-employed retirement plans Fort Wayne, IN. The freedom of owning your own business in Fort Wayne, IN offers many benefits of being self-employed. Even so, this independence can come with potential drawbacks, especially regarding planning for retirement, because you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider looking into other possibilities. In addition to having a more secure retirement, partnering with a financial advisor in Fort Wayne, IN to set up your self-employed retirement plan delivers significant tax advantages that enable both you and your business to thrive.
Few Fort Wayne, IN wealth management and retirement planning firms understand the needs of self-employed individuals better than Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and Correct Capital have a rich history of helping businesses with their retirement planning needs. We recognize that your business and retirement aspirations go far beyond simple financial figures, and we work tirelessly to provide personalized solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Fort Wayne, IN, or call Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Fort Wayne, IN today.
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Why Fort Wayne, IN 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 tangible benefits today. With customizable contribution options to substantial tax savings, partnering with a financial advisor in Fort Wayne, IN allows you to design 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 flexibility to tailor how much you save:
- Customizable Contributions: Save extra during successful years and cut back when your earnings dip, so that your plan works with your current income.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw without tax penalties in the future—a smart decision if you expect your tax rate will increase in the future.
Save Money on Taxes
Retirement plans for self-employed individuals deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you might access state-specific deductions as a self-employed individual. These local incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can apply for a credit of up to 50% of the first $2,000 contributed a retirement plan, cutting down 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 determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across varied stocks, bonds, and other assets serves to 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 prevents you from using your retirement funds during tough times and incurring penalties.
Plan for the Future of Your Fort Wayne, IN Business
Preparing for retirement can assist you prepare for what’s next with your Fort Wayne, IN business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and are not part of the sale. These savings can provide the reliable income you’ll need later on. It’s important to note that while selling your business results in a capital gain, contributions to retirement accounts are restricted by contribution limits (e.g., up to $7,000 for IRAs or as much as $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 might face when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg ensure financial security as you make this shift. You might want to seek advice from a financial advisor with expertise in succession and retirement planning to reduce taxes on the sale.
With the best-fit retirement strategy, you can take control of your financial future, reduce your tax burden, and build a secure foundation 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 crucial factors for building your retirement fund. Starting early not only lets you accumulate a bigger financial cushion but also lowers the pressure of playing catch-up as you get older. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Waiting to start your retirement fund can have a major impact on the amount you’ll have when you reach retirement age. The main reason is compound interest—the financial principle where your investments earn returns, and those returns, subsequently, earn even more returns. The more time your money has to grow, the more significant the benefit of this growth.
Example: Alex and Taylor are both self-employed individuals. Both of them want to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but puts away $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and achieves a total of $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently can lead to substantial growth. Consider this example showing the effect of consistent growth:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an average annual return of 7%, you’ll end up with $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.
Starting sooner, the less you need to save each year to meet your retirement goals.
*These calculations represent estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. The scenarios provided are meant to provide general guidance and are not a promise of future results. Your individual results may differ depending on elements like market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Fort Wayne, IN, it is often the case that you prioritize reinvesting in your business instead of saving for retirement. That said, beginning a plan now enables you to:
- Take advantage of growth that is tax-deferred or tax-free withdrawals in the future.
- Enjoy flexible contributions that adapt to your cash flow.
- 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 be required to worry about catching up later in life. Saving for retirement now means taking control of your financial future and giving yourself the opportunity to turn your attention to your objectives—both for your golden years and your Fort Wayne, IN business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for entrepreneurs in Fort Wayne, IN, each offering its own advantages and considerations. A financial advisor will guide you to understand the benefits and drawbacks of each option and identify the one most suitable for your needs. Generally speaking, your self-employed retirement plan options in Fort Wayne, IN are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement 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 taxed as income. In contrast, Roth IRAs require contributions using income already taxed, but retirement withdrawals that qualify, including earnings, are not taxed. In both accounts, withdrawals don’t incur penalties if you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are open to those with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $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 offers a way to save for retirement that allows 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) are limited to contributions from the employer role above the 25% you (the employer) have designated. 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 fixed dollar figure or a percentage of wages to employee accounts. SEP IRAs works well for businesses that experience fluctuating revenue streams. In contrast to some alternatives, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs operate like conventional IRAs, where the contributions are tax-deferred and withdrawals are taxed as income.
Eligibility: Employers of any type, including self-employed individuals 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, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan designed for businesses without employees or when the sole 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 provides more savings compared to SEPs or IRAs; however, the increased savings potential may be offset by more limited investment options. 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: Only business owners and their spouses may establish 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:
- Employee contributions 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 if you're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your net self-employment income, which is calculated as net profits less half of your self-employment tax and the elective deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 if you're over age 50 (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that guarantees a pre-established payout to self-employed individuals upon retirement. In contrast to the plans discussed earlier, a defined benefit plan doesn't fluctuate based on investment returns, but lets individuals clearly understand what they'll have in retirement. This strategy is ideal for high-earning professionals who want to save a substantial amount for retirement and are willing to make substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income during retirement.
Eligibility: Any self-employed individual running an owner-only business or with less than five employees are eligible to open an individual defined benefit plan, but it's typically recommended for those over 50 who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans include:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% and are willing to do more
- Businesses that have demonstrated consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The contribution limit requires calculation from an actuary based on your financial situation, age, and savings targets. Limits on contributions 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 specialized in self-employed retirement plans is an important asset for self-employed individuals. They have the expertise to help navigate the complexities of retirement planning and design a customized plan that matches your objectives. A financial advisor in Fort Wayne, IN will assess where you stand financially, understand your risk tolerance, and help you in selecting the best options about saving and investing for retirement. A key part of what we do for you features:
- Assist in selecting a plan that best fits your needs and goals
- Customize the plan to your needs even further
- Formalize a plan in writing as required by IRS rules
- Organize a trust plan to manage your assets
- Help you understand the plan's terms
- Track and fine-tune your plan as needed
- 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
Self-employed individuals in Fort Wayne, IN who don’t have the time or expertise to handle their retirement savings strategy independently can become overwhelmed when faced with their available plans. With Correct Capital, our Fort Wayne, IN financial advisors handle the lion's share of your retirement planning for you, and strive to ensure meeting your future savings targets as easy as possible for you. We can help you get set up your self-employed retirement plan in just four steps:
- Schedule a Call: In just 20 minutes, 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 no pressure or major time investment on your part.
- Gather Information: Should we agree to proceed, we'll request information, including whether you have employees, your existing financial picture, and your long-term savings targets. This enables us to craft a custom plan designed just for you.
- Review Your Plan: When we finalize a plan from the information you provide, we'll sit down with you and review 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 set everything up so you can initiate your savings journey. As time goes on, we'll have regular meetings and track your progress to keep it tailored to your evolving circumstances.
Our Fort Wayne, IN financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Fort Wayne, IN 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 Wayne, IN
Your business isn't "just a business" to you, and your Fort Wayne, IN financial advisors need to offer more than just good financial guidance. With Correct Capital, we focus on building a relationship with our clients and their businesses to deliver personalized self-employed retirement plans. To every client in Fort Wayne, IN, 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.
