Self-employed retirement plans Garland, TX. The freedom of being your own boss in Garland, TX is one of the best aspects of working for yourself. However, this freedom sometimes brings with a lack of security, especially regarding 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, yet countless should consider understanding their retirement options. In addition to enjoying a more secure retirement, partnering with a financial advisor in Garland, TX to set up your self-employed retirement plan delivers significant tax advantages that allow both you and your business to thrive.
Few Garland, TX wealth management and retirement planning firms understand the needs of small business owners better than Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and Correct Capital have a rich history of assisting business owners in their retirement planning needs. We recognize that your goals for your business and retirement go far beyond just monetary concerns, and we strive to provide tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Garland, TX, or call Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Garland, TX today.
Why Garland, TX 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. From flexible contributions to significant tax savings, consulting a financial advisor in Garland, TX enables you to create your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) provides the option to adjust how much you save:
- Customizable Contributions: Contribute more during successful years and reduce savings when income is lower, so that your plan fits 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 wise move if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, so you can keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, which gives your money more time to compound.
- State-Specific Incentives: In some states, you might access additional tax breaks as a sole proprietor. These regional incentives help 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, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure 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 can help reduce risk while still growing your savings.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund prevents you from using your retirement funds during challenging periods and risking extra costs.
Plan for the Future of Your Garland, TX Business
A thoughtful retirement strategy enables you to think through what’s next with your Garland, TX business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and won’t be included in the sale. These plans offer the reliable income you’ll need during retirement. Keep in mind that while the sale of a business usually creates a capital gain, deposits into these plans are restricted by contribution limits (e.g., a maximum of $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you might face when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement savings offer a stable foundation during the change. You can also partner with a financial advisor with expertise in succession and retirement planning to help with taxes associated with the transaction.
With the right retirement plan, you can take control of your financial future, cut down your tax obligations, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Garland, TX Now?
There’s no denying that time is one of the most important factors for building your retirement fund. Beginning sooner rather than later not only allows you to build a bigger financial cushion but also minimizes the financial burden of playing catch-up as you get older. Here’s why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings could lead to a substantial impact on the amount you’ll have when you stop working. The biggest reason is compound interest—the concept 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 effect of compounding.
Example: Taylor and Alex are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor delays savings until age 40 but contributes $7,500 annually to catch up.
By age 65, using a projected 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time often create impressive growth. Take a look at this scenario showing the power of consistent growth:
- Starting at age 25: By investing $200 per month in a retirement plan with an projected return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month yields only $235,412.97* by age 65—a difference of over $260,000, just from a 10-year delay.
Saving early, the less effort required each year to meet your retirement goals.
*The figures provided in this example are estimates derived from NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are intended as illustrative examples and cannot predict actual future outcomes. Outcomes may change depending on factors such as market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Garland, TX, it is often the case that you focus more on reinvesting in your business over saving for retirement. That said, starting a plan now allows you to:
- Take advantage of growth that is tax-deferred or penalty-free withdrawals in the future.
- Benefit from adjustable savings 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. Building your retirement savings today means taking control of your financial future and giving yourself the opportunity to focus on your goals—both for your future retirement and your Garland, TX business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for entrepreneurs in Garland, TX, each providing its own benefits and trade-offs. A financial advisor will guide you to evaluate the pros and cons of each option and identify the one best suited for your unique situation. Typically, your self-employed retirement plan options in Garland, TX consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that offer distinct tax benefits. In a traditional IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but retirement distributions are subject to income tax. In contrast, Roth IRAs require contributions are made with after-tax income, but qualified withdrawals in retirement, including earnings, are not taxed. 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're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA is a retirement plan that enables those who are self-employed to set aside a portion of their self-employment income. Contributions must come from 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) have designated. If you have employees, it's required to contribute the same amount for them as you do for yourself. You may choose to contribute a set monetary value or a percentage of wages to employee accounts. SEP IRAs may be ideal for entrepreneurs facing periods of inconsistent earnings. Compared to other retirement options, SEP IRAs lack expensive setup or ongoing fees.
SEPs work like traditional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Both employers and self-employed individuals 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: Solo 401(k)s, also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed meant for businesses without employees or where the only employee is a spouse. Solo 401(k)s operate much like 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 can be balanced by more constrained investment avenues. Using a solo 401(k), you can make either traditional or Roth deferrals, which offer the same tax benefits as their IRA contribution counterparts.
Eligibility: Solo 401(k)s are available solely to business owners and their spouses are eligible to open 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 self-employed earnings, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 for those aged 50 and above, or $34,750 for those who turn 60-63 in 2025.
- Contributions as an employer (as an employer) cannot exceed 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.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (as of 2025), $81,250 for those aged 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 business owners upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but lets individuals clearly understand exactly how much they'll get in retirement. This option is best suited for high-earning self-employed individuals who want to save a significant sum for retirement and can commit to making larger deposits. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income in retirement.
Eligibility: Self-employed professionals running an owner-only business or with a small staff of under five are eligible to open an individual defined benefit plan, but it's most commonly advised for individuals aged 50+ who earn at least $250,000 a year. 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 individuals 50 and older)
- 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 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. Contribution limits change annually.
The Importance of a Financial Advisor in Garland, TX for Your Self-Employed Retirement Plan
A financial advisor in Garland, TX specialized in self-employed retirement plans serves as an invaluable resource for those working for themselves. They offer the knowledge to assist guide you through the challenges of retirement planning and craft a personalized approach that matches your objectives. A financial advisor in Garland, TX will evaluate your financial situation, identify your risk preferences, and help you in choosing wisely about saving and investing for retirement. Included in what we do for you involves:
- Guide you in choosing a plan that suits your unique requirements
- Further adapt the plan to fit you personally even further
- Create a written plan as required by IRS rules
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Monitor and adjust your plan when necessary
- Provide ongoing education and advice to help you navigate your retirement journey
- Boost your retirement earnings by making the most of your social security
Self-Employed Retirement Plans in Garland, TX: Correct Capital's Process
Garland, TX business owners who don’t have the time or expertise to oversee their self-employed retirement plan themselves may end up overwhelmed by their options. Through our team at Correct Capital, our Garland, TX financial advisors take on the majority of your savings plan setup for you, and strive to ensure 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 just four steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can help understand if our services align for you and your business. This initial call lets us get a sense of your goals with zero commitment or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including whether you have employees, your present financial standing, and your retirement goals. This allows us to put together a custom plan that aligns with your goals.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll sit down with you and go over 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 implement the necessary steps so you can initiate your savings journey. Throughout our relationship, we'll have regular meetings and review your strategy to ensure it stays suited to your needs.
Our Garland, TX financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Garland, TX 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 Garland, TX
Your business isn't "just a business" to you, and your Garland, TX financial advisors must deliver more than simply sound financial advice. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to provide personalized self-employed retirement plans. We offer all our Garland, TX clients 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, reach out to Correct Capital at 877-930-401k or contact us online.
