Self-employed retirement plans Gilbert, AZ. The freedom of being your own boss in Gilbert, AZ offers many benefits of being self-employed. However, this flexibility can come with potential drawbacks, especially in terms of planning for retirement, since you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from looking into other possibilities. In addition to enjoying a more comfortable retirement, seeking advice from a financial advisor in Gilbert, AZ to set up your self-employed retirement plan can provide significant tax advantages that allow your business to grow and succeed.
Few Gilbert, AZ wealth management and retirement planning firms are as attuned to the requirements of self-employed individuals 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 we have a rich history of assisting business owners in their retirement planning needs. We know that your business and retirement aspirations extend well past basic numbers, and we work tirelessly to provide tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Gilbert, AZ, or call Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Gilbert, AZ today.
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Why Gilbert, AZ 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 tangible benefits today. Offering flexibility in contributions to significant tax savings, working with a financial advisor in Gilbert, AZ allows you to create your retirement plan to fit 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) gives you the option to adjust how much you save:
- Customizable Contributions: Contribute more during high-income years and cut back when your earnings dip, ensuring your plan fits your financial situation.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw your savings tax-free down the road—an advantageous choice if you believe your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, so you can keep more of your hard-earned money.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, providing your money more time to grow.
- State-Specific Incentives: Based on your location, you may be eligible for state-specific credits as a sole proprietor. These state-level incentives help make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a credit of up to 50% of the first $2,000 they contribute a retirement plan, helping to lower 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 about how you invest:
- Diversified Portfolios: Spreading your investments across different asset classes like stocks and bonds can help reduce risk while still growing your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net ensures you don’t tapping into your nest egg during challenging periods and incurring penalties.
Plan for the Future of Your Gilbert, AZ Business
A thoughtful retirement strategy can assist you think through what’s next with your Gilbert, AZ business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These plans ensure the reliable income you’ll need later on. It’s important to note that while the sale of a business usually creates a capital gain, deposits into these plans 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: Using retirement contributions wisely helps lower the taxes you’ll owe when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg provide a stable foundation during the change. You can also partner with a financial advisor experienced in both succession and retirement strategies to reduce taxes during the sale.
With the proper savings strategy, you can take control of your financial future, lower your tax bill, and establish a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Gilbert, AZ Now?
Time remains one of the most valuable factors when it comes to saving for retirement. Getting a head start not only helps you grow a bigger financial cushion but also reduces the pressure of catching up later in life. This is why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings can have a substantial impact on the total you’ll have when you stop working. The main reason is compound interest—the concept where your investments generate earnings, and those returns, then, generate even more returns. The greater time span your money has to grow, the larger the effect of this growth.
Example: Taylor and Alex are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor delays savings until age 40 but saves $7,500 annually to make up for lost time.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and achieves a total of $691,184.39*.
- Taylor invests $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time can lead to impressive growth. Consider this example showing the power of compound interest:
- 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: Contributing the same $200 per month yields only $235,412.97* by age 65—a difference of over $260,000, all because of a 10-year delay.
Starting sooner, the less effort required each year to achieve your retirement goals.
*These calculations are estimates calculated using 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 for illustrative purposes only and are not a promise of future results. Actual results may vary due to elements like market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
For self-employed individuals in Gilbert, AZ, it might seem easier to put more emphasis on reinvesting in your business instead of saving for retirement. Even so, beginning a plan now enables you to:
- Benefit from tax-free future growth or tax-free withdrawals later on.
- Enjoy contribution flexibility that change with your cash flow.
- Create a financial cushion that provides security, no matter how your business develops.
The sooner you start, the less you’ll be required to worry about making up for lost time later in life. Building your retirement savings today means gaining control over your financial future and giving yourself the ability to focus on your objectives—both for your future retirement and your Gilbert, AZ business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for self-employed individuals in Gilbert, AZ, each with its own advantages and considerations. A financial advisor will guide you to learn about the advantages and disadvantages of each plan and identify the one most suitable for your needs. Typically, your self-employed retirement plan options in Gilbert, AZ consist of:
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, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but money taken out during retirement are taxable. In contrast, Roth IRA contributions using income already taxed, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both cases, withdrawals are penalty-free as long as 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 accessible for individuals with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs offers a way to save for retirement that allows those who are self-employed to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) allocate. 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. This type of plan is a good option for companies with fluctuating revenue streams. Compared to other retirement options, SEP IRAs lack costly startup or administrative fees.
SEPs function 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 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
For self-employed individuals, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan meant for businesses without employees or if the only employee is your spouse. This type of plan operate much like traditional employer-managed 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the additional opportunities can be balanced by more constrained investment avenues. 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 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:
- Elective deferrals (as an employee) of up to 100% of your self-employment income, up to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 for those who turn 60-63 in 2025.
- Profit-sharing contributions (as an employer) cannot exceed 25% of your net self-employment income, which is your net profit minus half of your self-employment tax and the employee contributions you made.
Total contributions are capped at $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 represents a type of retirement plan that guarantees a set amount to entrepreneurs upon retirement. In contrast to the plans discussed earlier, 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 recommended for high-earning entrepreneurs who are focused on saving a substantial amount for retirement and are prepared to contribute substantial contributions. Contributions are tax deferred, and withdrawals are taxable as income upon retirement.
Eligibility: Any self-employed individual managing a one-person company or employing fewer than five people can open an individual defined benefit plan, but it's most commonly suggested for those over 50 who make $250,000 or more annually. In most cases, good candidates for defined benefit plans are:
- Business owners or partners who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% but are open to increasing contributions
- Organizations with proven consistent profit patterns
- Business leaders over age 40 who aim to quickly build retirement savings or accelerate the retirement savings
Contribution Limits: The contribution limit is calculated by an actuary determined by your financial situation, age, and savings targets. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Gilbert, AZ for Your Self-Employed Retirement Plan
Working with a financial advisor in Gilbert, AZ specialized in self-employed retirement plans can be an invaluable resource for self-employed individuals. They bring the skills needed to guide you through the challenges of retirement planning and design a personalized approach that matches your objectives. Your advisor in Gilbert, AZ will evaluate your financial situation, determine how much risk you’re comfortable with, and guide you in choosing wisely about saving and investing for retirement. Included in what we do for you features:
- Guide you in choosing a plan that best fits your needs and goals
- Further adapt the plan to fit you personally even further
- Adopt a written plan in accordance with IRS guidelines
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Track and fine-tune your plan when necessary
- Deliver continuous support and financial insights throughout your retirement planning process
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Gilbert, AZ: Correct Capital's Process
Gilbert, AZ business owners who lack the time, interest, or knowledge to handle their self-employed retirement plan on their own often feel overwhelmed as they look at their available plans. At Correct Capital, our Gilbert, AZ financial advisors handle the majority of your retirement planning for you, and strive to ensure meeting your financial objectives as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: In just 20 minutes, a member of our advisor team can determine if our services align for you and your business. This brief introduction lets us get a sense of your goals with no obligation or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including your employee count, your current financial situation, and your long-term savings targets. This allows us to put together a custom plan designed just for you.
- Review Your Plan: After we put together a plan from the information you provide, we'll sit down with you and discuss your plan step by step to make sure it's clear and explain its fit to your circumstances.
- 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 check in and monitor your plan to ensure it stays suited to your needs.
Our Gilbert, AZ financial advisors and retirement plan consultants are 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 Gilbert, AZ 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 Gilbert, AZ
You don't see your business as "just a business", and your Gilbert, AZ financial advisors must deliver more than just good financial guidance. At Correct Capital, we make it a priority to understand our clients and their businesses to create tailored self-employed retirement plans. We offer all our Gilbert, AZ clients our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To begin on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
