Self-employed retirement plans Garland, TX. The freedom of running your own company in Garland, TX offers many benefits of being self-employed. That said, this flexibility can come with certain challenges, notably regarding building your retirement fund, as you don't have access to a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider understanding their retirement options. In addition to having a financially stable retirement, partnering with a financial advisor in Garland, TX to create your self-employed retirement plan delivers significant tax advantages that help your business to grow and succeed.
Few Garland, TX investment consulting and retirement planning firms are as attuned to the requirements of self-employed individuals quite like Correct Capital. The father of our founder was a small business owner himself (check out our story here), and we take pride in supporting entrepreneurs with their retirement planning needs. We understand that your goals for your business and retirement aren’t limited to basic numbers, and we are dedicated to provide personalized solutions that reflect your objectives. Continue exploring to find out about your self-employed retirement plan options in Garland, TX, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Garland, TX today.
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Why Garland, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also offer real benefits today. With customizable contribution options to substantial tax savings, working with a financial advisor in Garland, TX allows you to customize your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) offers the flexibility to modify how much you save:
- Customizable Contributions: Save extra during profitable years and cut back when revenues are down, so your plan fits your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw without tax penalties in the future—a smart decision if you believe your tax rate is likely to rise 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 hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, giving your money more time to compound.
- State-Specific Incentives: In some states, you could qualify for additional tax breaks as a self-employed individual. These local incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax credit of up to 50% of the first $2,000 they contribute a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Allocating your investments across different stocks, bonds, and alternatives can help mitigate financial risk while helping to grow your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund prevents you from dipping into savings during challenging periods and risking extra costs.
Plan for the Future of Your Garland, TX Business
Retirement planning also helps you plan ahead for what’s next with your Garland, TX business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and are not part of the sale. These savings ensure the financial stability you’ll need in the future. Keep in mind that while selling your business results in a capital gain, retirement plan contributions are restricted by contribution limits (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, factoring in catch-up contributions, according to plan rules).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you might face when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg ensure financial security through the transition. You may also partner with a financial advisor who specializes in succession planning and retirement accounts to help with taxes associated with the transaction.
With the right retirement plan, you gain control over your financial future, reduce your tax burden, and create 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 crucial resources when it comes to saving for retirement. Beginning sooner rather than later not only lets you accumulate a bigger financial cushion 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
Putting off saving for retirement can have a substantial impact on the amount you’ll have when you reach retirement age. The primary reason is compound interest—the powerful process where your investments generate earnings, and those returns, in turn, accumulate even more returns. The greater time span your money has to grow, the more significant the effect of this growth.
Example: Alex and Taylor are both self-employed professionals. Their shared goal is 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 saves $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time often create substantial growth. Here’s a simple scenario showing the effect of compounding:
- Starting at age 25: If you invest $200 per month in a retirement plan with an expected yearly growth rate 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, simply due to a 10-year delay.
Starting sooner, the less you need to save each year to meet your retirement goals.
*The numbers shown in this scenario are based on estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. The scenarios provided are for illustrative purposes only and cannot predict actual future outcomes. Actual results may vary based on factors such as market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in Garland, TX, it can be tempting to put more emphasis on reinvesting in your business instead of saving for retirement. Even so, starting a plan now gives you the chance to:
- Benefit from tax-deferred growth or penalty-free withdrawals later on.
- Benefit from adjustable savings that adapt to your income.
- Build a financial cushion that offers peace of mind, no matter how your business develops.
The sooner you start, the less you’ll have to worry about making up for lost time later in life. Saving for retirement now means gaining control over your financial future and creating for yourself the ability 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 offering its own advantages and considerations. A financial advisor can help you evaluate the advantages and disadvantages of each option and choose the one most suitable for your unique situation. Typically, your self-employed retirement plan options in Garland, TX are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that provide distinct tax benefits. In a conventional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but withdrawals in retirement are subject to income tax. In contrast, with Roth IRAs, you contribute from post-tax earnings, but retirement withdrawals that qualify, including earnings, are not taxed. In both types of accounts, withdrawals are penalty-free provided you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, IRAs, including traditional and Roth options are available to anyone with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs serves as a retirement savings option that allows self-employed individuals to set aside a portion of their self-employment income. Contributions are strictly employer contributions an employer, so, as a independent business owner, you (the employee) cannot make additional contributions more than the 25% you (the employer) have designated. If you have employees, you are obligated 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. A SEP IRA is a good option for businesses that experience periods of inconsistent earnings. Compared to other retirement options, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs operate like standard IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
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
For self-employed individuals, the contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed intended for companies that have no employees or where the only employee is a spouse. This type of plan are similar to traditional employer-managed 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the extra savings options may be offset by more constrained investment avenues. Using a solo 401(k), you can make either traditional or Roth deferrals, which have 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 self-employment income, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) cannot exceed 25% of your adjusted self-employment income, which is defined as net profit minus half of your self-employment tax and the elective deferrals you made.
Total contributions are capped at $70,000, or $77,500 for individuals aged 50+ (in 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans is a retirement option that delivers a fixed, predetermined benefit to business owners upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but enables participants to determine exactly how much they'll receive in retirement. This plan is recommended for wealthier self-employed individuals who want to save a significant sum for retirement and are prepared to contribute substantial contributions. Contributions are tax deferred, and withdrawals are taxable as income in retirement.
Eligibility: Self-employed professionals running an owner-only business or employing fewer than five people are eligible to open an individual defined benefit plan, but it's most commonly advised for people above age 50 who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans include:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 for individuals 50 and older)
- Businesses currently investing 3-4% and are willing to do more
- Businesses showing consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The contribution limit must be determined by an actuary determined by your income, age, and retirement goals. Limits on contributions change annually.
The Importance of a Financial Advisor in Garland, TX for Your Self-Employed Retirement Plan
A financial advisor in Garland, TX experienced with retirement plans for the self-employed is an important asset for entrepreneurs. They bring the skills needed to understand the intricacies of saving for retirement and design a tailored strategy that reflects your aspirations. A financial advisor in Garland, TX will evaluate your financial situation, understand your risk tolerance, and assist you in making informed decisions about saving and investing for retirement. Part of what we do for you includes:
- Assist in selecting a plan that suits your unique requirements
- Further adapt the plan to fit you personally even further
- Formalize a plan in writing as required by IRS rules
- Set up an asset trust plan
- Help 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
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Garland, TX: Correct Capital's Process
Entrepreneurs in Garland, TX who aren’t equipped with the time or understanding to manage their retirement savings strategy independently may end up overwhelmed when faced with their available plans. With Correct Capital, our Garland, TX financial advisors take on the majority of your retirement strategy for you, working to make meeting your future savings targets as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team will assess if our services align for you and your business. This brief introduction helps us understand what you're looking for with no pressure or major time investment on your part.
- Gather Information: Should we agree to proceed, we'll ask for information, including your employee count, your existing financial picture, 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 schedule a meeting and discuss your plan in detail to help you fully grasp it and show how it aligns with your goals.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can start saving. As time goes on, we'll check in and track your progress to ensure it stays suited to your needs.
Our Garland, TX financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Garland, TX 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 Garland, TX
You don't see your business as "just a business", and your Garland, TX financial advisors need to offer more than just good financial guidance. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to deliver tailored self-employed retirement plans. All our clients in Garland, TX benefit from 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.
