Self-employed retirement plans Glendale, AZ. The freedom of running your own company in Glendale, AZ is one of the greatest advantages of working for yourself. That said, this freedom sometimes brings with a lack of security, particularly in terms of retirement savings, as you don't have the benefit of 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 having a more secure retirement, partnering with a financial advisor in Glendale, AZ to set up your self-employed retirement plan offers significant tax advantages that allow you to move your business forward.
Few Glendale, AZ wealth management and retirement planning firms truly grasp the challenges faced by small business owners quite like Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and our firm are deeply experienced in assisting business owners in their retirement planning needs. We recognize that your business and retirement aspirations extend well past just monetary concerns, and we strive to offer tailored solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Glendale, AZ, or call Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Glendale, AZ today.
Why Glendale, AZ Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also provide tangible benefits today. Offering flexibility in contributions to significant tax savings, working with a financial advisor in Glendale, AZ allows you to design your retirement plan to align with your unique financial situation.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) offers the flexibility to adjust how much you save:
- Customizable Contributions: Set aside more during high-income years and scale back when your earnings dip, so your plan works with your current income.
- Roth Options: A Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw tax-free later—a smart decision if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to grow.
- State-Specific Incentives: Depending on where you live, you could qualify for state-specific credits as a self-employed individual. These state-level incentives make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax 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 requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Allocating your investments across a mix of asset classes like stocks and bonds can help mitigate financial risk while still growing your savings.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund prevents you from tapping into your nest egg during challenging periods and facing tax penalties.
Plan for the Future of Your Glendale, AZ Business
A thoughtful retirement strategy also helps you prepare for what’s next with your Glendale, AZ business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s stay in your name and won’t be included in the sale. These plans ensure the steady income you’ll need later on. Remember that while selling a business often leads to a capital gain, contributions to retirement accounts are capped at annual limits (e.g., up to $7,000 for IRAs or up to $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you might face when you transfer your business.
- Succession Planning: For those winding down or handing over their business, your nest egg offer a stable foundation during the change. You may also seek advice from a financial advisor experienced in both succession and retirement strategies to reduce taxes associated with the transaction.
With the best-fit retirement strategy, you can take control of your financial future, reduce your tax burden, and create a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Glendale, AZ Now?
Time remains one of the most valuable resources for building your retirement fund. Starting early 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 pays to take action now:
The Cost of Waiting
Putting off saving for retirement can have a major impact on the savings 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, subsequently, generate 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 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 delays savings until age 40 but contributes $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex contributes $180,000 and accumulates $691,184.39*.
- Taylor puts in $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments invested steadily often create impressive growth. Here’s a simple scenario showing the impact of compounding:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Contributing 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 less effort required each year to meet your retirement goals.
*These calculations represent 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 for illustrative purposes only and cannot predict actual future outcomes. Actual results may vary depending on variables including market conditions, fees, and personal factors. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Glendale, AZ, it can be tempting to focus more on reinvesting in your business rather than saving for retirement. That said, initiating a plan now gives you the chance to:
- Take advantage of tax-free future growth or penalty-free withdrawals down the road.
- Take advantage of flexible contributions that adapt to your cash flow.
- Establish a financial cushion that provides security, no matter how your business develops.
The sooner you start, the less you’ll have to worry about catching up later in life. Taking steps toward your retirement goals today means managing your financial future and creating for yourself the opportunity to focus on your dreams—both for your retirement years and your Glendale, AZ business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for those working for themselves in Glendale, AZ, each providing its own advantages and considerations. A financial advisor is available to help you evaluate the pros and cons of each plan and identify the one best suited for your circumstances. Generally speaking, your self-employed retirement plan options in Glendale, AZ consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that include distinct tax benefits. In a standard IRA, the money you contribute is often tax-deductible, and investment earnings grow tax-deferred, but money taken out during retirement are taxable. In contrast, Roth IRAs require contributions using income already taxed, but retirement withdrawals that qualify, including earnings, are not taxed. In both accounts, withdrawals come without penalties 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 capped at $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs is a retirement plan 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 sole proprietor, you (the employee) are limited to contributions from the employer role more than the 25% you (the employer) have designated. 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 is a good option for businesses that experience periods of inconsistent earnings. Unlike other plans, SEP IRAs lack costly startup or administrative fees.
SEPs function like standard 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 capped at the lower of:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the contribution you can make 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 savings option for the self-employed intended for companies that have no employees or if the only employee is your spouse. Solo 401(k)s operate much like traditional employer-managed 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the increased savings potential may be offset by more constrained investment avenues. In a solo 401(k) plan, 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: As a self-employed individual with a solo 401(k) plan, you are allowed to make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, capped at the annual contribution limit. The contribution limits for 2025 include $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) must not surpass 25% of your adjusted self-employment income, which is calculated as net profits less half of your self-employment tax and the elective deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (for 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans offers a structured retirement solution that delivers a fixed, predetermined benefit 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 what they'll receive in retirement. This option is ideal for high-earning entrepreneurs who aim to accumulate a significant sum for retirement and can commit to making substantial contributions. Contributions offer tax-deferred growth, and withdrawals are taxable as income in retirement.
Eligibility: Any self-employed individual running an owner-only business or employing fewer than five people are eligible to open an individual defined benefit plan, but it's typically advised for individuals aged 50+ who earn at least $250,000 a year. Typically, good candidates for defined benefit plans are:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% and are willing to do more
- Businesses showing consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or accelerate the retirement savings
Contribution Limits: The cap on contributions requires calculation from an actuary based on your income, age, and retirement goals. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Glendale, AZ for Your Self-Employed Retirement Plan
Partnering with an advisor in Glendale, AZ specialized in self-employed retirement plans serves as an important asset for those working for themselves. They have the expertise to help navigate the complexities of retirement planning and design a personalized approach that matches your objectives. An expert in your area will evaluate your financial situation, determine how much risk you’re comfortable with, and help you in choosing wisely about saving and investing for retirement. Part of what we do for you includes:
- Assist in selecting a plan that best fits your needs and goals
- Further adapt the plan to your specific situation even further
- Formalize a plan in writing in accordance with IRS guidelines
- Set up an asset trust plan
- Help you understand the plan's terms
- Track and fine-tune your plan as needed
- 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 Glendale, AZ: Correct Capital's Process
Glendale, AZ business owners who don’t have the time or expertise to manage their self-employed retirement plan themselves can become overwhelmed by their options. Through our team at Correct Capital, our Glendale, AZ financial advisors handle the lion's share of your savings plan setup for you, and strive to ensure meeting your retirement goals as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in four simple steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team will assess if we're a good fit for you and your business. This initial call allows us to learn about your needs with no pressure or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including your employee count, your current financial situation, and your long-term savings targets. This helps us create a tailored approach designed just for you.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll schedule a meeting and review your plan thoroughly to make sure it's clear and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed 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 keep it tailored to your evolving circumstances.
Our Glendale, AZ financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Glendale, 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 Glendale, AZ
You don't see your business as "just a business", and your Glendale, AZ financial advisors should provide more than just good financial guidance. At Correct Capital, we make it a priority to understand our clients and their businesses to provide customized self-employed retirement plans. To every client in Glendale, AZ, we provide our I.O.U. promise: all of the advice you get from us 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.
