Self-employed retirement plans Fresno, CA. The independence of running your own company in Fresno, CA is one of the greatest advantages of being self-employed. However, this flexibility sometimes brings with a lack of security, particularly in terms of planning for retirement, since you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many should consider looking into other possibilities. In addition to achieving a more secure retirement, partnering with a financial advisor in Fresno, CA to create 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 truly grasp the challenges faced by small business owners better than Correct Capital. Our founder's father was a small business owner himself (check out our story here), and we have a rich history of assisting business owners in their retirement planning needs. We know that your professional and personal aspirations go far beyond simple financial figures, and we strive to provide personalized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Fresno, CA, or call Correct Capital at 877-930-401k or contact us online to talk to a small business financial advisor in Fresno, CA today.
Why Fresno, 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 offer real benefits today. From flexible contributions to substantial tax savings, consulting a financial advisor in Fresno, CA enables you to design 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 freedom to adjust how much you save:
- Customizable Contributions: Save extra during successful years and cut back when revenues are down, ensuring your plan works with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you settle taxes at the time of contribution, so you can withdraw your savings tax-free down the road—a wise move if you expect your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, allowing you to 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: In some states, you could qualify for state-specific deductions as a sole proprietor. These state-level incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can take advantage of a credit of up to 50% of the first $2,000 contributed a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future goes beyond just how much you save—it’s also about how you invest:
- Diversified Portfolios: Distributing your investments across varied stocks, bonds, and other assets can help mitigate financial risk while still growing your savings.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net helps you avoid dipping into savings during tough times and risking extra costs.
Plan for the Future of Your Fresno, CA Business
Retirement planning also helps 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 yours and are not part of the sale. These savings ensure the reliable income you’ll need during retirement. It’s important to note that while selling a business often leads to a capital gain, contributions to retirement accounts are capped at annual limits (e.g., as much as $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Strategically planning your contributions helps lower the taxes you are required to pay when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg provide a stable foundation as you make this shift. You may also seek advice from a financial advisor who specializes in succession planning and retirement accounts to help with taxes during the sale.
With the right retirement plan, you can take control of your financial future, reduce your tax burden, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Fresno, CA Now?
There’s no denying that time is one of the most important assets for building your retirement fund. Beginning sooner rather than later not only helps you grow a bigger financial cushion but also minimizes the stress of catching up later in life. This is why it is beneficial to start now:
The Cost of Waiting
Waiting to start your retirement fund can have a significant impact on the amount you’ll have when you stop working. The biggest reason is compound interest—the powerful process where your investments grow, and those returns, in turn, earn even more returns. The greater time span your money has to grow, the larger the impact of this compounding process.
Example: Alex and Taylor are both self-employed individuals. They each aim to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but puts away $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently can lead to impressive growth. Take a look at this scenario showing the power of compound interest:
- 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 leaves you with only $235,412.97* by age 65—a gap of over $260,000, all because of a 10-year delay.
Saving early, the lower your annual savings needs each year to achieve your retirement goals.
*The figures provided in this example 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 do not guarantee future performance. Actual results may vary depending on variables including market conditions, fees, and personal factors. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Fresno, CA, it can be tempting to put more emphasis on reinvesting in your business instead of saving for retirement. That said, beginning a plan now enables you to:
- Take advantage of tax-free future growth or penalty-free withdrawals in the future.
- Take advantage of contribution flexibility that align with your cash flow.
- Establish a long-term safety measure that ensures stability, no matter how your business evolves.
Getting started now, the less you’ll have to worry about catching up later in life. Taking steps toward your retirement goals today means gaining control over your financial future and creating for yourself the freedom to concentrate on your goals—both for your retirement years and your Fresno, CA business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for self-employed individuals in Fresno, CA, each with its own advantages and considerations. A financial advisor can help you understand the advantages and disadvantages of each plan and identify the one best suited for your needs. Generally speaking, your self-employed retirement plan options in Fresno, CA include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that offer distinct tax benefits. In a standard IRA, you can usually deduct your contributions from taxable income, and returns grow free of current taxes, but withdrawals in retirement are taxable. In contrast, Roth IRAs require contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are tax-free. 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 open to those with an earned income.
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 enables entrepreneurs to set aside a portion of their self-employment income. Contributions must come from an employer, so, as a independent business owner, you (the employee) cannot make additional contributions beyond the 25% you (the employer) already contributed. 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. SEP IRAs may be ideal for entrepreneurs facing fluctuating revenue streams. In contrast to some alternatives, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs function like standard IRAs, where the contributions are tax-deferred and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed can set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 25% of compensation, or
- $70,000 for 2025
As a self-employed person, the contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed meant for companies that have no employees or if the only employee is your spouse. Solo 401(k)s function similarly to traditional employer-managed 401(k) plans, and allow you to contribute as both an employee or an employer with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the additional opportunities may be offset by more limited investment options. 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: This plan is exclusively for 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 are allowed to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you're over 50, or $34,750 if you attain age 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your net earnings from self-employment, 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 those aged 50 and older (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that delivers a set amount to self-employed individuals 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 get in retirement. This strategy is ideal for higher-income professionals who want to save a substantial amount for retirement and can commit to making sizeable contributions. Contributions are tax deferred, and withdrawals are taxable as income during retirement.
Eligibility: Entrepreneurs managing a one-person company or with less than five employees may establish an individual defined benefit plan, but it's most commonly recommended for people above age 50 who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans are:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% with plans to contribute more
- Businesses with proven consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The maximum allowable contribution must be determined by an actuary using your financial situation, age, and savings targets. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Fresno, CA for Your Self-Employed Retirement Plan
A financial advisor in Fresno, CA focused on self-employed retirement strategies is an essential partner for entrepreneurs. They offer the knowledge to assist navigate the complexities of retirement planning and craft a customized plan that aligns with your goals. 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. Included in what we do for you includes:
- Guide you in choosing a plan that suits your unique requirements
- Customize the plan to fit you personally even further
- Formalize a plan in writing in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Help you understand the plan's terms
- Review and modify your plan to keep it aligned with your goals
- Offer continued financial education and guidance as you continue on the road to retirement
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Fresno, CA: Correct Capital's Process
Self-employed individuals in Fresno, CA who don’t have the time or expertise to manage their self-employed retirement plan independently often feel overwhelmed when faced with their choices. With Correct Capital, our Fresno, CA financial advisors handle the bulk of your retirement planning for you, and strive to ensure meeting your financial objectives as easy as possible for you. We will guide you in creating 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 will assess if we're suited to your needs for you and your business. This initial call lets us learn about your needs with no obligation or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including how many employees you have (if any), your present financial standing, and your future objectives. This enables us to craft a tailored approach suited specifically for your needs.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll sit down with you and review your plan thoroughly to help you fully grasp it and understand how it best correlates to your needs.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can initiate your savings journey. As time goes on, we'll meet with you and review your strategy to ensure it stays suited to your needs.
Our Fresno, CA financial advisors and retirement plan consultants are fiduciary advisors, meaning they are committed by law and ethics to act in your best interest.
Other financial advisory services we offer in Fresno, CA include:
- Financial Planning for Business Owners
- Comprehensive Financial Planning
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
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 must deliver more than just good financial guidance. At Correct Capital, we focus on building a relationship with our clients and their businesses to create personalized self-employed retirement plans. To every client in Fresno, CA, we provide our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To begin on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
