Self-employed retirement plans Fremont, CA. The independence of being your own boss in Fremont, CA offers many benefits of having a self-directed career. That said, this freedom often comes with potential drawbacks, particularly in terms of retirement savings, as you don't have the option of employer-sponsored retirement plans. 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, working with a financial advisor in Fremont, CA to create your self-employed retirement plan can provide significant tax advantages that enable you to move your business forward.
Few Fremont, CA investment consulting and retirement planning firms understand the needs of self-employed individuals quite like Correct Capital. Our founder's father was a small business owner himself (learn more about our story here), and our firm are deeply experienced in supporting entrepreneurs with their retirement planning needs. We understand that your business and retirement aspirations go far beyond just monetary concerns, and we work tirelessly to offer personalized solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Fremont, CA, or reach out to Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Fremont, CA today.
Why Fremont, CA 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. From flexible contributions to substantial tax savings, partnering with a financial advisor in Fremont, CA helps you design your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to adjust how much you save:
- Customizable Contributions: Contribute more during profitable years and cut back when revenues are down, ensuring 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 tax-free later—a wise move if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, helping you keep more of your earnings.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, which gives your money more time to accumulate.
- State-Specific Incentives: Based on your location, you could qualify for state-specific deductions as a sole proprietor. These regional incentives make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can claim a tax credit of up to 50% of the first $2,000 put into a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure retirement isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across varied asset classes like stocks and bonds serves to mitigate financial risk while helping to grow your savings.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business prevents you from dipping into savings during challenging periods and risking extra costs.
Plan for the Future of Your Fremont, CA Business
A thoughtful retirement strategy can assist you plan ahead for what’s next with your Fremont, CA business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s stay in your name and don’t transfer with the business. These plans can provide the financial stability you’ll need during retirement. 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 as much as $70,000 for Solo 401(k)s, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you might face when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings offer the funds you need through the transition. You may also seek advice from a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens on the sale.
With the proper savings strategy, you gain control over your financial future, lower your tax bill, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Fremont, CA Now?
Time remains one of the most crucial assets when it comes to saving for retirement. Beginning sooner rather than later not only lets you accumulate a more substantial retirement fund but also lowers the financial burden of catching up later in life. The following are reasons why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund can have a major impact on the savings you’ll have when you reach retirement age. The biggest reason is compound interest—the concept where your investments earn returns, and those returns, in turn, accumulate even more returns. The longer your money has to grow, the larger the effect of this growth.
Example: 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 postpones starting contributions to age 40 but puts away $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex contributes $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently may result in significant growth. Here’s a simple 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: Contributing the same $200 per month would result in only $235,412.97* by age 65—a difference of over $260,000, simply due to a 10-year delay.
The earlier you begin, the less you need to save each year to achieve your retirement goals.
*The numbers shown in this scenario represent estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. The scenarios provided are for illustrative purposes only and cannot predict actual future outcomes. Actual results may vary based on variables including market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Fremont, CA, it can be tempting to prioritize reinvesting in your business instead of saving for retirement. Even so, initiating a plan now allows you to:
- Leverage tax-free future growth or tax-free withdrawals in the future.
- Benefit from adjustable savings that adapt to your earnings.
- Create a financial cushion that ensures stability, no matter how your business evolves.
Getting started now, the less you’ll need to worry about making up for lost time later in life. Taking steps toward your retirement goals today means taking control of your financial future and giving yourself the ability to focus on your dreams—both for your golden years and your Fremont, CA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for self-employed individuals in Fremont, CA, each providing its own pros and cons. A financial advisor can help you evaluate the advantages and disadvantages of each plan and choose the one ideal for your unique situation. Typically, your self-employed retirement plan options in Fremont, CA consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that provide key tax perks. In a standard IRA, you can usually deduct your contributions from taxable income, and returns grow free of current taxes, but retirement distributions are taxable. In contrast, with Roth IRAs, you contribute are made with after-tax income, but qualified withdrawals in retirement, including earnings, are tax-free. In both cases, withdrawals don’t incur penalties as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, 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 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA is a retirement plan that permits those who are self-employed to set aside a portion of their self-employment income. Contributions can only be made by an employer, so, as a sole proprietor, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) have designated. If you have employees, it's required 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. This type of plan is a good option for companies with fluctuating revenue streams. Unlike other plans, SEP IRAs lack costly startup or administrative fees.
SEPs function like standard IRAs, where contributions are made with pre-tax money and withdrawals are taxed as income.
Eligibility: Both employers and self-employed individuals can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed meant for businesses with no employees or where the only employee is a spouse. This type of plan are similar to employer-sponsored 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This allows for more savings than SEPs or IRAs; however, the additional opportunities can be balanced by more constrained investment avenues. Using a solo 401(k), 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: As a self-employed individual with a solo 401(k) plan, you have the ability 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. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the deferrals you made.
Total contributions are capped at $70,000, or $77,500 for those aged 50 and older (in 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 fixed, predetermined benefit to self-employed individuals upon retirement. As opposed to defined contribution plans, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine what they'll receive in retirement. This plan is best suited for high-earning entrepreneurs who aim to accumulate a substantial amount for retirement and can commit to making larger deposits. Contributions are tax deferred, and withdrawals are taxed as income during retirement.
Eligibility: Any self-employed individual running an owner-only business or employing fewer than five people may establish an individual defined benefit plan, but it's typically recommended for those over 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans are:
- Business owners or partners who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% with plans to contribute more
- Businesses that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution requires calculation from an actuary based on your earnings, age, and retirement objectives. Allowable contributions change annually.
The Importance of a Financial Advisor in Fremont, CA for Your Self-Employed Retirement Plan
A financial advisor in Fremont, CA focused on self-employed retirement strategies can be an invaluable resource for self-employed individuals. They offer the knowledge to assist understand the intricacies of saving for retirement and design a tailored strategy that reflects your aspirations. An expert in your area will assess where you stand financially, understand your risk tolerance, and help you in selecting the best options about saving and investing for retirement. Included in what we do for you includes:
- Guide you in choosing a plan that best fits your needs and goals
- Further adapt the plan to your specific situation even further
- Formalize a plan in writing as required by IRS rules
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Monitor and adjust your plan to keep it aligned with your goals
- Provide ongoing education and advice throughout your retirement planning process
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Fremont, CA: Correct Capital's Process
Self-employed individuals in Fremont, CA who don’t have the time or expertise to handle their retirement savings strategy on their own can become overwhelmed as they look at their options. Through our team at Correct Capital, our Fremont, CA financial advisors handle the majority of your retirement planning for you, and strive to ensure meeting your future savings targets as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in four simple steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can determine if our services align for you and your business. This initial call allows us to get a sense of your goals with zero commitment or major time investment on your part.
- Gather Information: Should we agree to proceed, we'll request information, including how many employees you have (if any), your present financial standing, and your long-term savings targets. 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 sit down with you and review your plan in detail to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can start saving. As time goes on, we'll meet with you and monitor your plan to make sure it remains aligned with your goals.
Our Fremont, CA financial advisors and retirement plan consultants are fiduciary advisors, meaning they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Fremont, CA 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 Fremont, CA
Your business isn't "just a business" to you, and your Fremont, CA financial advisors should provide more than simply sound financial advice. With Correct Capital, we take the time to get to know our clients and their businesses to provide tailored self-employed retirement plans. We offer all our Fremont, CA clients our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
