Self-employed retirement plans Fremont, CA. The flexibility of being your own boss in Fremont, CA offers many benefits of having a self-directed career. However, this flexibility often comes with potential drawbacks, particularly regarding building your retirement fund, as you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off understanding their retirement options. In addition to having a more comfortable retirement, seeking advice from a financial advisor in Fremont, CA to set up your self-employed retirement plan delivers significant tax advantages that enable both you and your business to thrive.
Few Fremont, CA investment consulting and retirement planning firms understand the needs of self-employed individuals as well as Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and we have a rich history of assisting business owners in their retirement planning needs. We know that your goals for your business and retirement extend well past just monetary concerns, and we work tirelessly to provide personalized solutions that reflect your objectives. Continue exploring to find out about your self-employed retirement plan options in Fremont, CA, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Fremont, CA today.
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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 immediate benefits today. From flexible contributions to considerable tax savings, working with a financial advisor in Fremont, CA allows you to customize your retirement plan to align with your individual circumstances.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to tailor how much you save:
- Customizable Contributions: Save extra during profitable years and cut back when income is lower, so your plan works with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw your savings tax-free down the road—a smart decision if you expect your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed provide 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: Investments grow tax-free until withdrawal, giving your money more time to compound.
- State-Specific Incentives: Based on your location, you may be eligible for extra credits as a self-employed individual. These state-level incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can take advantage of a credit of up to 50% of the first $2,000 contributed 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 determined by your investment strategy:
- Diversified Portfolios: Allocating your investments across different stocks, bonds, and other assets serves to reduce risk while still growing your savings.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund ensures you don’t dipping into savings during challenging periods and facing tax penalties.
Plan for the Future of Your Fremont, CA Business
Retirement planning also helps you plan ahead for what’s next with your Fremont, CA business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain your personal assets and don’t transfer with the business. These plans offer the reliable income 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., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you are required to pay when you pass on your business.
- Succession Planning: If you’re passing the business on, your nest egg offer financial security during the change. You might want to 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 can take control of your financial future, lower your tax bill, and create a strong framework 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 important resources in retirement planning. Beginning sooner rather than later not only allows you to build a more substantial retirement fund but also minimizes the stress of playing catch-up as you get older. This is why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings could lead to a major impact on the savings you’ll have when you stop working. The main reason is compound interest—the concept where your investments earn returns, and those returns, then, earn even more returns. The greater time span your money has to grow, the greater the benefit of this compounding process.
Example: Alex and Taylor are both self-employed professionals. Both of them want 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 make up for lost time.
By age 65, with an assumption of 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time can lead to significant growth. Here’s a simple scenario showing the power of compounding:
- Starting at age 25: If you invest $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: Saving the same $200 per month would result in only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to reach your retirement goals.
*The numbers shown in this scenario are based on estimates derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. These examples are intended as illustrative examples 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 guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Fremont, CA, it might seem easier to prioritize reinvesting in your business instead of saving for retirement. That said, initiating a plan now gives you the chance to:
- Take advantage of growth that is tax-deferred or withdrawals without taxes in the future.
- Take advantage of adjustable savings that change with your cash flow.
- Establish a financial cushion that offers peace of mind, no matter how your business changes.
Getting started now, the less you’ll need 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 focus on your objectives—both for your retirement years and your Fremont, CA business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for entrepreneurs in Fremont, CA, each with its own benefits and trade-offs. A financial advisor is available to help you evaluate the advantages and disadvantages of each plan and choose the one best suited for your circumstances. Generally speaking, your self-employed retirement plan options in Fremont, CA consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that include specific tax advantages. In a conventional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but retirement distributions are taxable. In contrast, Roth IRA contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are not taxed. In both accounts, withdrawals don’t incur penalties 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 taxable earnings.
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 is a retirement plan that allows those who are self-employed to save a percentage of their net business profits. Contributions are strictly employer contributions an employer, so, as a independent business owner, you (the employee) would not be able to contribute more than 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. It's your choice whether to contribute a set monetary value 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 don’t have costly startup or administrative fees.
SEPs work like conventional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can establish 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
If you’re self-employed, the contribution you can make 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 businesses without employees or when the sole employee is your spouse. This type of plan function similarly to employer-sponsored 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 can be balanced by more limited investment options. 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: 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 can make two types of contributions:
- Employee contributions of up to 100% of your earned income from self-employment, capped at 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.
- Profit-sharing contributions (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 deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for individuals aged 50+ (for 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans offers a structured retirement solution that provides a fixed, predetermined benefit to self-employed individuals upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but allows self-employed individuals to know the precise amount they'll get in retirement. This plan is best suited for higher-income entrepreneurs who are focused on saving a significant sum for retirement and can commit to making substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income upon retirement.
Eligibility: Entrepreneurs managing a one-person company or with a small staff of under five can open an individual defined benefit plan, but it's most commonly recommended for those over 50 who make $250,000 or more annually. In most cases, good candidates for defined benefit plans include:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% but are open to increasing contributions
- Organizations with proven consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The cap on contributions 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 Fremont, CA for Your Self-Employed Retirement Plan
Partnering with an advisor in Fremont, CA experienced with retirement plans for the self-employed serves as an essential partner for those working for themselves. They offer the knowledge to assist understand the intricacies of saving for retirement and develop a tailored strategy that matches your objectives. Your advisor in Fremont, CA will review your finances, understand your risk tolerance, and guide you in selecting the best options about saving and investing for retirement. Part of what we do for you includes:
- Help you choose a plan that suits your unique requirements
- Further adapt the plan to fit you personally even further
- Formalize a plan in writing in accordance with IRS guidelines
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Track and fine-tune your plan as needed
- Deliver continuous support and financial insights to help you navigate your retirement journey
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Fremont, CA: Correct Capital's Process
Fremont, CA business owners who aren’t equipped with the time or understanding to handle their self-employed retirement plan independently often feel overwhelmed as they look at their options. Through our team at Correct Capital, our Fremont, CA financial advisors handle the lion's share of your retirement planning for you, to help make meeting your retirement goals as hassle-free as possible for you. We are here to assist you in setting up your self-employed retirement plan in just four steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can help understand if our services align for you and your business. This short conversation lets us understand what you're looking for with no pressure or extensive time commitment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including whether you have employees, your current financial situation, and your future objectives. This helps us create a tailored approach that aligns with your goals.
- Review Your Plan: After we put together a plan based on the information you provide, we'll schedule a meeting and review your plan step by step to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: When we finalize on your plan, we'll implement the necessary steps so you can initiate your savings journey. Throughout our relationship, we'll have regular meetings and track your progress to keep it tailored to your evolving circumstances.
Our Fremont, CA financial advisors and retirement plan consultants are 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 Fremont, CA 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 Fremont, CA
You don't see your business as "just a business", and your Fremont, CA financial advisors must deliver more than basic financial recommendations. With Correct Capital, we make it a priority to understand our clients and their businesses to provide customized self-employed retirement plans. We offer all our Fremont, CA clients our I.O.U. promise: all guidance we provide 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.
