Self-employed retirement plans Fort Wayne, IN. The freedom of being your own boss in Fort Wayne, IN offers many benefits of being self-employed. Even so, this freedom often comes with a lack of security, particularly when it comes to building your retirement fund, since you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many should consider looking into other possibilities. In addition to enjoying a financially stable retirement, working with a financial advisor in Fort Wayne, IN to create your self-employed retirement plan delivers significant tax advantages that allow both you and your business to thrive.
Few Fort Wayne, IN investment consulting and retirement planning firms truly grasp the challenges faced by small business owners better than Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and we are deeply experienced in assisting business owners in their retirement planning needs. We recognize that your business and retirement aspirations extend well past simple financial figures, and we work tirelessly to provide tailored 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 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 are essential for preparing you for the future, they also provide immediate benefits today. From flexible contributions to substantial tax savings, partnering with a financial advisor in Fort Wayne, IN allows you to customize your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) provides the freedom to tailor how much you save:
- Customizable Contributions: Contribute more during successful years and reduce savings when income is lower, so that your plan works with your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, 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
Plans designed for the self-employed deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, so you can keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to compound.
- State-Specific Incentives: Based on your location, you might access additional tax breaks as a self-employed individual. These local incentives make these plans even more beneficial.
- 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, 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 determined by your investment strategy:
- Diversified Portfolios: Allocating your investments across a mix of stocks, bonds, and other assets is a smart way to reduce risk while still growing your savings.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business helps you avoid tapping into your nest egg during tough times and facing tax penalties.
Plan for the Future of Your Fort Wayne, IN Business
Preparing for retirement also helps you plan ahead for what’s next with your Fort Wayne, IN business:
- Selling Your Business: When selling your business, accounts such as SEP IRAs or Solo 401(k)s stay in your name and won’t be included in the sale. These accounts ensure the steady income you’ll need in the future. It’s important to note that while the sale of a business usually creates a capital gain, contributions to retirement accounts are subject to yearly maximums (e.g., as much as $7,000 for IRAs or up to $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you’ll owe when you pass on your business.
- Succession Planning: If you’re passing the business on, your retirement accounts ensure financial security through the transition. You can also seek advice from a financial advisor with expertise in succession and retirement planning to minimize tax burdens associated with the transaction.
With the best-fit retirement strategy, you can take control of your financial future, lower your tax bill, and establish 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 crucial resources for building your retirement fund. Beginning sooner rather than later not only allows you to build a larger nest egg but also lowers the pressure of saving aggressively in the future. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Waiting to start your retirement fund may cause a substantial impact on the amount you’ll have when you reach retirement age. The primary reason is compound interest—the financial principle where your investments generate earnings, and those returns, subsequently, accumulate even more returns. The longer your money has to grow, the more significant the benefit of this compounding process.
Example: Two individuals, 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 delays savings until age 40 but puts away $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex invests $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Even modest contributions invested steadily often create substantial growth. Take a look at this scenario showing the impact 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: Investing the same $200 per month leaves you with only $235,412.97* by age 65—a difference 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.
*The numbers shown in this scenario represent estimates generated with NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are intended as illustrative examples and are not a promise of future results. Actual results may vary depending on factors such as market conditions, fees, and personal factors. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person 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 allows you to:
- Benefit from tax-free future growth or withdrawals without taxes down the road.
- Take advantage of contribution flexibility that align with your cash flow.
- Create a safety net that offers peace of mind, no matter how your business changes.
The sooner you start, the less you’ll be required to worry about catching up later in life. Building your retirement savings today means managing your financial future and creating for yourself the opportunity to turn your attention to your dreams—both for your future retirement and your Fort Wayne, IN business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for entrepreneurs in Fort Wayne, IN, each offering its own advantages and considerations. A financial advisor can help you learn about the advantages and disadvantages of each choice and determine the one ideal for your circumstances. Generally speaking, your self-employed retirement plan options in Fort Wayne, IN consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that include key tax perks. In a traditional IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but retirement distributions are taxed as income. In contrast, with Roth IRAs, you contribute from post-tax earnings, but qualified withdrawals in retirement, including earnings, are not taxed. In both accounts, withdrawals don’t incur penalties provided you are at least 59½.
Eligibility: Unlike plans linked to your job, both 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 offers a way to save for retirement that permits self-employed individuals to set aside a portion of their self-employment income. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) cannot make additional contributions above the 25% you (the employer) have designated. 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 flat-dollar amount or a percentage of wages to employee accounts. This type of plan may be ideal for companies with cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs work like conventional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed 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 amount eligible to be contributed 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 intended for businesses without employees or where the only employee is a spouse. These plans function similarly to employer-sponsored 401(k) plans, and let you make contributions as both the employer and the employee with pre-tax money. This offers more savings versus SEPs or IRAs; however, the extra savings options may be offset by more restricted investment choices. 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 can set up and contribute to a solo 401(k).
Contribution Limits: If you are self-employed with a solo 401(k) plan, you are allowed to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your self-employment income, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 if you attain age 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 deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (for 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans represents a type of retirement plan that guarantees a pre-established payout to self-employed individuals upon retirement. As opposed to defined contribution plans, this plan is not influenced by market performance, but enables participants to determine exactly how much they'll get in retirement. This strategy is ideal for wealthier professionals who aim to accumulate a substantial amount for retirement and are willing to make sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income in retirement.
Eligibility: Self-employed professionals running an owner-only business or employing fewer than five people may establish an individual defined benefit plan, but it's typically advised for those over 50 who make $250,000 or more annually. Generally, good candidates for defined benefit plans are:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% and are willing to do more
- Companies showing consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The cap on contributions must be determined by an actuary based on your financial situation, age, and savings targets. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Fort Wayne, IN for Your Self-Employed Retirement Plan
A financial advisor in Fort Wayne, IN experienced with retirement plans for the self-employed can be an essential partner for self-employed individuals. They bring the skills needed to understand the intricacies of saving for retirement and craft a personalized approach that reflects your aspirations. A financial advisor in Fort Wayne, IN will evaluate your financial situation, identify your risk preferences, and help you in choosing wisely about saving and investing for retirement. Included in what we do for you features:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Tailor the plan to your needs even further
- Create a written plan in accordance with IRS guidelines
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Review and modify your plan when necessary
- Offer continued financial education and guidance as you continue on the road to retirement
- 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 oversee their self-employed retirement plan themselves may end up overwhelmed when faced with their choices. Through our team at Correct Capital, our Fort Wayne, IN financial advisors handle the lion's share of your retirement planning for you, working to make meeting your future savings targets as easy as possible for you. We are here to assist you in setting up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: In just 20 minutes, a member of our advisor team will assess if our services align for you and your business. This short conversation allows us to get a sense of your goals with no pressure 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 present financial standing, and your future objectives. This helps us create a custom plan that aligns with your goals.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll meet with you and go over your plan in detail to help you fully grasp it and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll put everything in place so you can begin contributing. Throughout our relationship, we'll check in and monitor your plan to ensure it stays suited to your needs.
Our Fort Wayne, IN financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Fort Wayne, IN include:
- Family Wealth Planning
- 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
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 simply sound financial advice. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to provide customized self-employed retirement plans. All our clients in Fort Wayne, IN benefit from our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To get started on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
