Self-employed retirement plans Fort Worth, TX. The independence of being your own boss in Fort Worth, TX is one of the best aspects of being self-employed. Even so, this independence often comes with potential drawbacks, especially in terms of retirement savings, since you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many could benefit from looking into other possibilities. In addition to achieving a more comfortable retirement, seeking advice from a financial advisor in Fort Worth, TX to create your self-employed retirement plan can provide significant tax advantages that help your business to grow and succeed.
Few Fort Worth, TX financial advisory and retirement planning firms are as attuned to the requirements of entrepreneurs better than Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (check out our story here), and our firm are deeply experienced in assisting business owners in their retirement planning needs. We know that your goals for your business and retirement aren’t limited to just monetary concerns, and we strive to provide tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Fort Worth, TX, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Fort Worth, TX today.
Why Fort Worth, TX 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. Offering flexibility in contributions to significant tax savings, working with a financial advisor in Fort Worth, TX helps you customize your retirement plan to suit your individual circumstances.
Flexibility That Fits Your Income
For those with fluctuating income from year to year, a plan like a SEP IRA or Solo 401(k) provides the option to modify how much you save:
- Customizable Contributions: Save extra during successful years and reduce savings when income is lower, so that your plan works with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you pay taxes on contributions now, enabling 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
Plans designed for the self-employed offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, helping you keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you could qualify for state-specific credits as a business owner. These state-level incentives make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a credit of up to 50% of the first $2,000 they contribute a retirement plan, further reducing 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 linked to the way you invest:
- Diversified Portfolios: Allocating your investments across a mix of asset classes like stocks and bonds is a smart way to mitigate financial risk while still growing 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 financial hardships and incurring penalties.
Plan for the Future of Your Fort Worth, TX Business
A thoughtful retirement strategy enables you to plan ahead for what’s next with your Fort Worth, TX business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s remain yours and don’t transfer with the business. These accounts offer the reliable income you’ll need during retirement. It’s important to note that while the sale of a business usually creates a capital gain, deposits into these plans are capped at annual limits (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Using retirement contributions wisely helps lower the taxes you’ll owe when you sell your business.
- Succession Planning: For those winding down or handing over their business, your nest egg provide a stable foundation through the transition. You may also partner with a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens associated with the transaction.
With the best-fit retirement strategy, you can take control of your financial future, cut down your tax obligations, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Fort Worth, TX Now?
Time remains one of the most crucial assets for building your retirement fund. Getting a head start not only helps you grow a bigger financial cushion but also minimizes the stress of saving aggressively in the future. Here’s why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement may cause a major impact on the total you’ll have when you stop working. The main reason is compound interest—the concept where your investments earn returns, and those returns, then, accumulate even more returns. The longer your money has to grow, the greater the benefit of this compounding process.
Example: Alex and Taylor are both entrepreneurs. They each aim to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but saves $7,500 annually to make up for lost time.
By age 65, with an assumption of 7% annual return:
- Alex invests $180,000 and achieves a total of $691,184.39*.
- Taylor invests $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently can lead to significant growth. Take a look at this scenario showing the impact of compounding:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Saving the same $200 per month yields only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to achieve your retirement goals.
*The numbers shown in this scenario represent estimates derived from NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. The scenarios provided are for illustrative purposes only and do not guarantee future performance. Outcomes may change due to variables including market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Fort Worth, TX, 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:
- Leverage growth that is tax-deferred or penalty-free withdrawals later on.
- Take advantage of contribution flexibility that align with your earnings.
- Build a safety net that offers peace of mind, no matter how your business changes.
Starting early, the less you’ll have to worry about making up for lost time later in life. Saving for retirement now means taking control of your financial future and creating for yourself the ability to turn your attention to your dreams—both for your retirement years and your Fort Worth, TX business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for self-employed individuals in Fort Worth, TX, each providing its own advantages and considerations. A financial advisor is available to help you understand the pros and cons of each option and identify the one most suitable for your needs. In most cases, your self-employed retirement plan options in Fort Worth, TX are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that provide distinct tax benefits. In a conventional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but money taken out during retirement are subject to income tax. In contrast, Roth IRAs require contributions are made with after-tax income, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are open to those with an earned income.
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: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that permits those who are self-employed 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 beyond the 25% you (the employer) have designated. If you have employees, you must 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. This type of plan works well for businesses that experience periods of inconsistent earnings. Unlike other plans, SEP IRAs are free of expensive setup or ongoing fees.
SEPs work like traditional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Employers of any type, including 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 amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), commonly known as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan meant for businesses without employees or when the sole employee is your spouse. This type of plan are similar to standard 401(k) plans, and allow you to contribute as both the employer and the employee with pre-tax money. This provides more savings than SEPs or IRAs; however, the additional opportunities often come with 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 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-employed earnings, subject to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 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.
Total contributions are capped at $70,000, or $77,500 if you're over age 50 (in 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that provides a set amount to business owners 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 strategy is recommended for high-earning professionals who aim to accumulate a substantial amount for retirement and are prepared to contribute substantial contributions. Contributions are tax deferred, and withdrawals are taxed as income during retirement.
Eligibility: Self-employed professionals operating a solo business or with a small staff of under five can open an individual defined benefit plan, but it's most commonly suggested for individuals aged 50+ who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans are:
- Partners or owners who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- 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 aim to quickly build retirement savings or accelerate the retirement savings
Contribution Limits: The cap on contributions requires calculation from an actuary using your earnings, age, and retirement objectives. Allowable contributions change annually.
The Importance of a Financial Advisor in Fort Worth, TX for Your Self-Employed Retirement Plan
Partnering with an advisor in Fort Worth, TX experienced with retirement plans for the self-employed can be an essential partner for entrepreneurs. They bring the skills needed to guide you through the challenges of retirement planning and craft a tailored strategy that matches your objectives. An expert in your area will evaluate your financial situation, understand your risk tolerance, and guide you in making informed decisions about saving and investing for retirement. Included in what we do for you involves:
- Assist in selecting a plan that aligns with your objectives and circumstances
- Customize the plan to your specific situation even further
- Formalize a plan in writing in accordance with IRS guidelines
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Review and modify your plan as needed
- Deliver continuous support and financial insights throughout your retirement planning process
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Fort Worth, TX: Correct Capital's Process
Entrepreneurs in Fort Worth, TX who lack the time, interest, or knowledge to manage their self-employed retirement plan on their own may end up overwhelmed by their choices. At Correct Capital, our Fort Worth, TX financial advisors take on the majority of your retirement planning for you, to help make meeting your financial objectives 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: It only takes 20 minutes, a member of our advisor team will assess if we're a good fit for you and your business. This initial call allows us to learn about your needs with no pressure or significant effort on your part.
- Gather Information: Should we agree to proceed, we'll request information, including whether you have employees, your present financial standing, and your retirement goals. This enables us to craft a personalized strategy suited specifically for your needs.
- Review Your Plan: After we put together a plan using the information you provide, we'll meet with you and go over your plan in detail to help you fully grasp it and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can begin contributing. Throughout our relationship, we'll meet with you and monitor your plan to ensure it stays suited to your needs.
Our Fort Worth, TX financial advisors and retirement plan consultants are 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 Worth, TX include:
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
Call Correct Capital for Your Self-Employed Retirement Plan in Fort Worth, TX
You don't see your business as "just a business", and your Fort Worth, TX financial advisors need to offer more than basic financial recommendations. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to provide tailored self-employed retirement plans. All our clients in Fort Worth, TX benefit from our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To get started on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
