Self-employed retirement plans Fresno, CA. The flexibility of owning your own business in Fresno, CA is one of the greatest advantages of having a self-directed career. However, this flexibility can come with certain challenges, especially when it comes to planning for retirement, since you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, yet countless should consider exploring their options. In addition to achieving a more comfortable retirement, working with a financial advisor in Fresno, CA to set up your self-employed retirement plan delivers significant tax advantages that help you to move your business forward.
Few Fresno, CA wealth management and retirement planning firms understand the needs of small business owners better than Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (read more of our story here), and our firm have a rich history of assisting business owners in their retirement planning needs. We understand that your goals for your business and retirement aren’t limited to just monetary concerns, and we are dedicated to provide tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Fresno, CA, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Fresno, CA today.
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Why Fresno, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also offer real benefits today. With customizable contribution options to substantial tax savings, consulting a financial advisor in Fresno, CA allows you to design 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 modify how much you save:
- Customizable Contributions: Set aside more during high-income years and reduce savings when income is lower, ensuring your plan works with your cash flow.
- Roth Options: Opting for 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 expect your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) lower your taxable income, so you can keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to compound.
- State-Specific Incentives: Depending on where you live, you might access additional 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 claim a tax 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
Building a secure retirement requires more than how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Allocating your investments across varied asset classes like stocks and bonds can help reduce risk while still growing your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund ensures you don’t tapping into your nest egg during tough times and risking extra costs.
Plan for the Future of Your Fresno, CA Business
A thoughtful retirement strategy can assist you prepare for what’s next with your Fresno, CA business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s remain your personal assets and won’t be included in the sale. These plans can provide the reliable income you’ll need later on. Keep in mind that while the sale of a business usually creates a capital gain, retirement plan contributions 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, factoring in catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you’ll owe when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts ensure financial security through the transition. You might want to partner with a financial advisor experienced in both succession and retirement strategies to reduce taxes on the sale.
With the proper savings strategy, you can take control of 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 Fresno, CA Now?
Time remains one of the most important factors for building your retirement fund. Getting a head start not only allows you to build a more substantial retirement fund but also minimizes the pressure 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 savings you’ll have when you reach retirement age. The biggest reason is compound interest—the financial principle where your investments generate earnings, and those returns, subsequently, generate even more returns. The more time your money has to grow, the more significant the benefit of this growth.
Example: Alex and Taylor are both entrepreneurs. Their shared goal is to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but contributes $7,500 annually to catch up.
By age 65, using a projected 7% annual return:
- Alex invests $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
Even modest contributions invested steadily can lead to impressive growth. Here’s a simple scenario showing the effect of compound interest:
- Starting at age 25: If you invest $200 per month in a retirement plan with an average annual 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 shortfall of over $260,000, all because of a 10-year delay.
Starting sooner, the lower your annual savings needs each year to reach your retirement goals.
*These calculations are 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 for illustrative purposes only and do not guarantee future performance. Outcomes may change depending on factors such as market conditions, fees, and your unique situation. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Fresno, CA, it can be tempting to prioritize reinvesting in your business instead of saving for retirement. That said, beginning a plan now gives you the chance to:
- Leverage growth that is tax-deferred or withdrawals without taxes later on.
- Benefit from contribution flexibility that adapt to your cash flow.
- Create a safety net that offers peace of mind, no matter how your business evolves.
Starting early, 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 creating for yourself the ability to focus on your goals—both for your golden years and your Fresno, CA business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for self-employed individuals in Fresno, CA, each offering its own advantages and considerations. A financial advisor is available to help you learn about the advantages and disadvantages of each choice and choose the one ideal for your circumstances. In most cases, your self-employed retirement plan options in Fresno, CA include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that offer key tax perks. In a standard IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but withdrawals in retirement are taxable. In contrast, Roth IRA contributions using income already taxed, but eligible distributions during retirement, including earnings, are exempt from taxes. In both cases, withdrawals are penalty-free provided you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are available to anyone 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: The Simplified Employee Pension IRA is a retirement plan that permits entrepreneurs to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a sole proprietor, you (the employee) would not be able to contribute beyond the 25% you (the employer) allocate. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. You have the flexibility 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. Compared to other retirement options, SEP IRAs lack costly startup or administrative fees.
SEPs function like traditional IRAs, where contributions are made with pre-tax money and retirement distributions are taxable.
Eligibility: Employers of any type, including self-employed individuals can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 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 retirement savings plan designed 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 an employee or an employer with pre-tax money. This offers more savings compared to SEPs or IRAs; however, the extra savings options can be balanced by more constrained investment avenues. 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 can make two types of contributions:
- Deferrals as an employee of up to 100% of your earned income from self-employment, subject to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 if you attain age 60-63 in 2025.
- Contributions as an employer (as an employer) must not surpass 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the elective deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (as of 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 guarantees 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 the precise amount they'll get in retirement. This strategy is best suited for higher-income entrepreneurs who want to save a substantial amount for retirement and can commit to making substantial contributions. Contributions are tax deferred, and withdrawals are taxable as income in retirement.
Eligibility: Self-employed professionals managing a one-person company or with less than five employees are eligible to open an individual defined benefit plan, but it's typically advised for individuals aged 50+ who make $250,000 or more annually. Typically, good candidates for defined benefit plans tend to be:
- Partners or owners who want to invest more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% with plans to contribute more
- Businesses that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The cap on contributions is calculated by an actuary determined by your income, age, and retirement goals. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in Fresno, CA for Your Self-Employed Retirement Plan
Partnering with an advisor in Fresno, CA focused on self-employed retirement strategies serves as an invaluable resource for entrepreneurs. They have the expertise to help guide you through the challenges of retirement planning and craft a customized plan that matches your objectives. A financial advisor in Fresno, CA will review your finances, identify your risk preferences, and guide you in selecting the best options about saving and investing for retirement. Part of what we do for you features:
- Guide you in choosing a plan that best fits your needs and goals
- Tailor the plan to your needs even further
- Adopt a written plan as required by IRS rules
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan as needed
- Deliver continuous support and financial insights throughout your retirement planning process
- Boost your retirement earnings by making the most of your social security
Self-Employed Retirement Plans in Fresno, CA: Correct Capital's Process
Fresno, CA business owners who aren’t equipped with the time or understanding to handle their self-employed retirement plan on their own can become overwhelmed as they look at their choices. At Correct Capital, our Fresno, CA financial advisors take on the lion's share of your savings plan setup 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: A quick 20-minute call is all it takes, a member of our advisor team will assess if we're a good fit for you and your business. This short conversation allows us to understand what you're looking for with zero commitment or significant effort on your part.
- Gather Information: Should we agree to proceed, we'll request information, including how many employees you have (if any), your current financial situation, and your retirement goals. This helps us create a personalized strategy designed just for you.
- Review Your Plan: After we put together a plan from the information you provide, we'll schedule a meeting and go over your plan thoroughly to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can begin contributing. Over the course of our partnership, we'll meet with you and review your strategy to make sure it remains aligned with your goals.
Our Fresno, CA financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Fresno, 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 Fresno, CA
You don't see your business as "just a business", and your Fresno, CA 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 deliver personalized self-employed retirement plans. To every client in Fresno, CA, we provide our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To get started on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
