Self-employed retirement plans Gilbert, AZ. The freedom of running your own company in Gilbert, AZ is one of the greatest advantages of working for yourself. However, this independence often comes with a lack of security, especially regarding planning for retirement, because you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many should consider understanding their retirement options. In addition to enjoying a financially stable retirement, working with a financial advisor in Gilbert, AZ to set up your self-employed retirement plan can provide significant tax advantages that enable both you and your business to thrive.
Few Gilbert, AZ wealth management and retirement planning firms are as attuned to the requirements of entrepreneurs as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (check out our story here), and our firm are deeply experienced in supporting entrepreneurs with their retirement planning needs. We know that your goals for your business and retirement extend well past simple financial figures, and we work tirelessly to provide customized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Gilbert, AZ, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a small business financial advisor in Gilbert, AZ today.
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 deliver immediate benefits today. From flexible contributions to substantial tax savings, partnering with a financial advisor in Gilbert, AZ helps you customize your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) provides the option to tailor how much you save:
- Customizable Contributions: Save extra during profitable years and reduce savings when income is lower, so that your plan fits your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw your savings tax-free down the road—a smart decision if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA shrink your tax liability, allowing you to keep more of your earnings.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, providing your money more time to accumulate.
- State-Specific Incentives: Based on your location, you may be eligible for state-specific deductions as a self-employed individual. These state-level incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can take advantage of 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
Creating a stable future isn’t only about how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Allocating your investments across different stocks, bonds, and alternatives serves to mitigate financial risk while still growing your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund helps you avoid tapping into your nest egg during financial hardships and incurring penalties.
Plan for the Future of Your Gilbert, AZ Business
Preparing for retirement enables you to think through what’s next with your Gilbert, AZ business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain yours and are not part of the sale. These savings offer the financial stability you’ll need during retirement. It’s important to note that while selling a business often leads to a capital gain, deposits into these plans are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you’ll owe when you pass on your business.
- Succession Planning: If you’re passing the business on, your retirement savings provide financial security 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 proper savings strategy, you can take control of your financial future, lower your tax bill, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Gilbert, AZ Now?
Time is one of the most important assets in retirement planning. Getting a head start not only allows you to build a more substantial retirement fund but also minimizes the financial burden of playing catch-up as you get older. This is why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings may cause a substantial impact on the amount you’ll have when you reach retirement age. The biggest reason is compound interest—the concept where your investments grow, and those returns, subsequently, accumulate even more returns. The more time your money has to grow, the more significant the effect of this compounding process.
Example: Two individuals, Alex and Taylor are both self-employed professionals. Both of them want to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but saves $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently often create substantial growth. Here’s a simple scenario showing the impact of consistent growth:
- Starting at age 25: By investing $200 per month in a retirement plan with an projected return of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month would result in only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
Saving early, the lower your annual savings needs each year to reach your retirement goals.
*The figures provided in this example 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. These examples are meant to provide general guidance and are not a promise of future results. Actual results may vary depending on factors such as market conditions, fees, and your unique situation. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in Gilbert, AZ, it might seem easier to put more emphasis on reinvesting in your business rather than saving for retirement. Even so, initiating a plan now gives you the chance to:
- Take advantage of tax-free future growth or penalty-free withdrawals later on.
- Take advantage of adjustable savings that align with your earnings.
- Build a safety net that provides security, no matter how your business develops.
The sooner you start, the less you’ll need to worry about playing catch-up later in life. Saving for retirement now means gaining control over your financial future and allowing yourself the ability to turn your attention to your objectives—both for your retirement years and your Gilbert, AZ business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for self-employed individuals in Gilbert, AZ, each providing its own pros and cons. A financial advisor is available to help you learn about the pros and cons of each option and choose the one ideal for your unique situation. Generally speaking, your self-employed retirement plan options in Gilbert, AZ are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that provide specific tax advantages. In a standard IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but money taken out during retirement are taxed as income. In contrast, Roth IRA contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are tax-free. In both accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, both traditional and Roth IRAs are accessible for individuals with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $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 offers a way to save for retirement that permits entrepreneurs to set aside a portion of their self-employment income. Contributions can only be made by an employer, so, as a independent business owner, you (the employee) would not be able to contribute more than the 25% you (the employer) already contributed. If you have employees, it's required to contribute the same amount for them as you do for yourself. It's your choice whether to contribute a set monetary value or a percentage of wages to employee accounts. This type of plan works well for businesses that experience fluctuating revenue streams. In contrast to some alternatives, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs operate like conventional IRAs, where contributions are made with pre-tax money and retirement distributions are taxable.
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
For self-employed individuals, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan designed for businesses with no employees or where the only employee is a spouse. This type of plan operate much like employer-sponsored 401(k) plans, and allow you to contribute as both an employer and an employee with pre-tax money. This offers more savings than SEPs or IRAs; however, the extra savings options can be balanced 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 can set up 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, capped at 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.
- Profit-sharing contributions (as an employer) are limited to 25% of your net self-employment income, which is defined as net profit minus half of your self-employment tax and the elective deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 if you're over age 50 (as of 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan represents a type of retirement plan 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 lets individuals clearly understand exactly how much they'll get in retirement. This option is recommended for higher-income self-employed individuals who want to save a large amount for retirement and can commit to making larger deposits. Contributions offer tax-deferred growth, and withdrawals incur taxes as income upon retirement.
Eligibility: Any self-employed individual running an owner-only business or with less than five employees may establish an individual defined benefit plan, but it's typically recommended 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 individuals 50 and older)
- Organizations that already put in 3-4% with plans to contribute more
- Companies showing consistent profit patterns
- Business leaders over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution requires calculation from an actuary using your financial situation, age, and savings targets. Limits on contributions change annually.
The Importance of a Financial Advisor in Gilbert, AZ for Your Self-Employed Retirement Plan
Working with a financial advisor in Gilbert, AZ focused on self-employed retirement strategies can be an invaluable resource for entrepreneurs. They offer the knowledge to assist guide you through the challenges of retirement planning and craft a tailored strategy that matches your objectives. A financial advisor in Gilbert, AZ will evaluate your financial situation, determine how much risk you’re comfortable with, and help you in selecting the best options about saving and investing for retirement. Part of what we do for you includes:
- Help you choose a plan that suits your unique requirements
- Tailor the plan to your specific situation even further
- Adopt a written plan in accordance with IRS guidelines
- Set up an asset trust plan
- Help you understand the plan's terms
- Track and fine-tune your plan to keep it aligned with your goals
- 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 Gilbert, AZ: Correct Capital's Process
Gilbert, AZ business owners who don’t have the time or expertise to handle their retirement savings strategy independently can become overwhelmed by their options. At Correct Capital, our Gilbert, AZ financial advisors manage the bulk of your retirement planning for you, working to make meeting your financial objectives as hassle-free as possible for you. We can help you get set up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if our services align for you and your business. This brief introduction allows us to get a sense of your goals with no pressure or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including your employee count, your existing financial picture, and your retirement goals. This enables us to craft a tailored approach designed just for you.
- Review Your Plan: After we put together a plan from the information you provide, we'll meet with you and go over your plan step by step to ensure you understand it and understand how it best correlates to your needs.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can begin contributing. Over the course of our partnership, we'll check in and review your strategy to keep it tailored to your evolving circumstances.
Our Gilbert, AZ financial advisors and retirement plan consultants are fiduciary advisors, meaning they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Gilbert, AZ 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 Gilbert, AZ
Your business isn't "just a business" to you, and your Gilbert, AZ financial advisors need to offer more than just good financial guidance. At Correct Capital, we make it a priority to understand our clients and their businesses to create customized self-employed retirement plans. All our clients in Gilbert, AZ benefit from our I.O.U. promise: everything we recommend 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.
