Self-employed retirement plans Fort Worth, TX. The independence of being your own boss in Fort Worth, TX is one of the greatest advantages of being self-employed. That said, this flexibility sometimes brings with potential drawbacks, particularly when it comes to building your retirement fund, as you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off understanding their retirement options. In addition to enjoying a financially stable retirement, seeking advice from a financial advisor in Fort Worth, TX to create your self-employed retirement plan delivers significant tax advantages that help both you and your business to thrive.
Few Fort Worth, TX wealth management and retirement planning firms are as attuned to the requirements of self-employed individuals as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (learn more about our story here), and we take pride in supporting entrepreneurs with their retirement planning needs. We know that your goals for your business and retirement extend well past just monetary concerns, and we are dedicated to offer personalized solutions aligned with your vision. 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 speak with a entrepreneurial financial advisor in Fort Worth, TX today.
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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 offer tangible benefits today. With customizable contribution options to significant tax savings, working with a financial advisor in Fort Worth, TX helps you design your retirement plan to align with 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) gives you the option to tailor how much you save:
- Customizable Contributions: Set aside more during profitable years and cut back when revenues are down, so that your plan fits your current income.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw tax-free later—a smart decision if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, allowing you to keep more of your hard-earned money.
- 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 state-specific deductions as a self-employed individual. These local incentives help make these plans even more beneficial.
- 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 they contribute 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 about how you invest:
- Diversified Portfolios: Distributing your investments across different asset classes like stocks and bonds serves to reduce risk while helping to grow your savings.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net helps you avoid tapping into your nest egg during financial hardships and facing tax penalties.
Plan for the Future of Your Fort Worth, TX Business
Preparing for retirement also helps you think through what’s next with your Fort Worth, TX business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s remain your personal assets and don’t transfer with the business. These savings can provide the steady income you’ll need later on. Remember that while selling your business results in a capital gain, contributions to retirement accounts are restricted by contribution limits (e.g., as much as $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, factoring in catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you might face when you pass on your business.
- Succession Planning: For those winding down or handing over their business, your retirement savings ensure the funds you need as you make this shift. You may also partner with a financial advisor experienced in both succession and retirement strategies to help with taxes on the sale.
With the proper savings strategy, you gain control over 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 Worth, TX Now?
Time is one of the most important assets when it comes to saving for retirement. Starting early not only allows you to build a larger nest egg but also minimizes the financial burden of saving aggressively in the future. Here’s why it makes sense to begin today:
The Cost of Waiting
Waiting to start your retirement fund could lead to a significant impact on the amount you’ll have when you stop working. The main reason is compound interest—the concept where your investments generate earnings, and those returns, in turn, earn even more returns. The more time your money has to grow, the more significant the effect of this compounding process.
Example: Taylor and Alex are both self-employed individuals. 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 puts away $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex contributes $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
Small, consistent savings made consistently often create significant growth. Consider this example showing the power of compounding:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an average annual return 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 difference of over $260,000, all because of a 10-year delay.
Saving early, the lower your annual savings needs each year to reach your retirement goals.
*These calculations are based on estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. This information is meant to provide general guidance and are not a promise of future results. Actual results may vary depending on 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
For self-employed individuals in Fort Worth, TX, it might seem easier to focus more on reinvesting in your business rather than saving for retirement. Even so, initiating a plan now allows you to:
- Take advantage of tax-free future growth or penalty-free withdrawals in the future.
- Benefit from contribution flexibility that align with your income.
- Create a safety net that ensures stability, no matter how your business evolves.
The sooner you start, the less you’ll be required to worry about making up for lost time later in life. Building your retirement savings today means managing your financial future and giving yourself the freedom to turn your attention to your goals—both for your retirement years and your Fort Worth, TX business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for entrepreneurs in Fort Worth, TX, each providing its own pros and cons. A financial advisor will guide you to learn about the advantages and disadvantages of each plan and choose the one ideal for your needs. Typically, your self-employed retirement plan options in Fort Worth, TX consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that provide distinct tax benefits. In a standard IRA, the money you contribute is often tax-deductible, and investment earnings grow tax-deferred, but money taken out during retirement are subject to income tax. In contrast, with Roth IRAs, you contribute from post-tax earnings, but qualified withdrawals in retirement, including earnings, are tax-free. In both accounts, withdrawals are penalty-free 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 open to those with a source of 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 is a retirement plan that enables self-employed individuals to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role above 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. It's your choice whether to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for companies with cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs lack expensive setup or ongoing fees.
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 are the lesser 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: Solo 401(k)s, also called an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan designed for companies that have no employees or where the only employee is a spouse. This type of plan are similar to traditional employer-managed 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This provides more savings versus SEPs or IRAs; however, the extra savings options often come with more restricted investment choices. With this type of plan, you can make either traditional or Roth deferrals, which share the same tax benefits as their IRA contribution counterparts.
Eligibility: Solo 401(k)s are available solely to 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 can make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 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 employee contributions you made.
The total contribution cannot exceed $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: The defined benefit plan is a retirement option that delivers a pre-established payout to entrepreneurs upon retirement. As opposed to defined contribution plans, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine exactly how much they'll have in retirement. This option is recommended for higher-income self-employed individuals who want to save a substantial amount for retirement and are prepared to contribute sizeable contributions. Contributions offer tax-deferred growth, and withdrawals are taxed as income during retirement.
Eligibility: Any self-employed individual running an owner-only business or employing fewer than five people are eligible to open an individual defined benefit plan, but it's generally recommended for people above age 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans include:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% with plans to contribute more
- Businesses that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The cap on contributions must be determined by an actuary using your financial situation, age, and savings targets. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Fort Worth, TX for Your Self-Employed Retirement Plan
A financial advisor in Fort Worth, TX specialized in self-employed retirement plans can be an essential partner for those working for themselves. They have the expertise to help navigate the complexities of retirement planning and design a tailored strategy that aligns with your goals. An expert in your area will assess where you stand financially, understand your risk tolerance, and help you in making informed decisions 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
- Further adapt the plan to your needs even further
- Formalize a plan in writing in accordance with IRS guidelines
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Review and modify your plan to keep it aligned with your goals
- Provide ongoing education and advice as you continue on the road to retirement
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Fort Worth, TX: Correct Capital's Process
Fort Worth, TX business owners who don’t have the time or expertise to manage their own retirement planning themselves can become overwhelmed when faced with their options. At Correct Capital, our Fort Worth, TX financial advisors manage the bulk of your savings plan setup 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: It only takes 20 minutes, a member of our advisor team can determine if we're a good fit for you and your business. This brief introduction helps us get a sense of your goals with no pressure or extensive time commitment on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including whether you have employees, your existing financial picture, and your future objectives. This enables us to craft a custom plan designed just for you.
- Review Your Plan: After we put together a plan based on the information you provide, we'll meet with you and go over your plan step by step to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll implement the necessary steps so you can begin contributing. Over the course of our partnership, we'll have regular meetings and track your progress to ensure it stays suited to your needs.
Our Fort Worth, TX financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to 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:
- 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 Worth, TX
You don't see your business as "just a business", and your Fort Worth, TX financial advisors must deliver more than just good financial guidance. With Correct Capital, we take the time to get to know our clients and their businesses to create tailored self-employed retirement plans. To every client in Fort Worth, TX, we provide our I.O.U. promise: all guidance we provide 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.
