Self-employed retirement plans Glendale, CA. The flexibility of running your own company in Glendale, CA is one of the greatest advantages of having a self-directed career. That said, this flexibility can come with a lack of security, notably when it comes to planning for retirement, because you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider exploring their options. In addition to having a financially stable retirement, working with a financial advisor in Glendale, CA to create your self-employed retirement plan offers significant tax advantages that allow you to move your business forward.
Few Glendale, CA financial advisory and retirement planning firms are as attuned to the requirements of small business owners better than Correct Capital. Our founder's father was a small business owner himself (learn more about our story here), and Correct Capital have a rich history of supporting entrepreneurs with their retirement planning needs. We understand that your goals for your business and retirement go far beyond simple financial figures, and we strive to provide tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Glendale, CA, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Glendale, CA today.
Why Glendale, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also provide real benefits today. From flexible contributions to significant tax savings, consulting a financial advisor in Glendale, CA allows you to create your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
For those with fluctuating income from year to year, a plan like a SEP IRA or Solo 401(k) provides the freedom to adjust how much you save:
- Customizable Contributions: Save extra during high-income years and scale back when your earnings dip, so that your plan aligns with your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, 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
Retirement plans for self-employed individuals offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, so you can keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to compound.
- State-Specific Incentives: In some states, you could qualify for additional credits as a self-employed individual. These regional incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can take advantage of a 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
Building a secure retirement isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Allocating your investments across varied asset classes like stocks and bonds is a smart way to mitigate financial risk while still growing your savings.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business prevents you from tapping into your nest egg during challenging periods and incurring penalties.
Plan for the Future of Your Glendale, CA Business
A thoughtful retirement strategy can assist you think through what’s next with your Glendale, CA business:
- Selling Your Business: If you’re planning to sell, plans like SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These plans can provide the reliable income you’ll need in the future. Keep in mind that while selling a business often leads to a capital gain, contributions to retirement accounts 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, based on plan compensation).
- Minimizing Taxes: Using retirement contributions wisely helps lower the taxes you might face when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings provide a stable foundation as you make this shift. You might want to seek advice from a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens during the sale.
With the best-fit retirement strategy, you gain control over your financial future, lower your tax bill, and create a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Glendale, CA Now?
Time is one of the most valuable resources when it comes to saving for retirement. Getting a head start not only helps you grow a bigger financial cushion but also reduces the financial burden of playing catch-up as you get older. This is why it is beneficial to start now:
The Cost of Waiting
Delaying your retirement savings may cause a major impact on the total you’ll have when you retire. The biggest reason is compound interest—the powerful process where your investments grow, and those returns, in turn, earn even more returns. The more time your money has to grow, the greater the effect of this compounding process.
Example: Alex and Taylor are both self-employed professionals. They each aim to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor waits until age 40 but saves $7,500 annually to catch up.
By age 65, using a projected 7% annual return:
- Alex invests $180,000 and achieves a total of $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Even modest contributions made consistently can lead to impressive growth. Here’s a simple scenario showing the effect of compound interest:
- Starting at age 25: Putting aside $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: Contributing the same $200 per month leaves you with only $235,412.97* by age 65—a gap of over $260,000, simply due to a 10-year delay.
The earlier you begin, the less you need to save each year to reach your retirement goals.
*The figures provided in this example are estimates generated with NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is intended as illustrative examples and do not guarantee future performance. Your individual results may differ depending on elements like market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Glendale, CA, it can be tempting to prioritize reinvesting in your business over saving for retirement. That said, initiating a plan now allows you to:
- Take advantage of tax-deferred growth or tax-free withdrawals later on.
- Benefit from flexible contributions that adapt to your income.
- Create a long-term safety measure that ensures stability, no matter how your business evolves.
Starting early, the less you’ll have to worry about making up for lost time later in life. Taking steps toward your retirement goals today means taking control of your financial future and giving yourself the ability to turn your attention to your goals—both for your future retirement and your Glendale, CA business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for entrepreneurs in Glendale, CA, each with its own benefits and trade-offs. A financial advisor will guide you to understand the pros and cons of each choice and choose the one ideal for your unique situation. Generally speaking, your self-employed retirement plan options in Glendale, CA include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that provide distinct tax benefits. In a standard IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but retirement distributions are taxable. In contrast, with Roth IRAs, you contribute using income already taxed, but retirement withdrawals that qualify, including earnings, are not taxed. In both cases, withdrawals come without penalties if you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are open to those with a source of income.
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 allows those who are self-employed to contribute a percentage of their net earnings. 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, you must contribute the same amount for them as you do for yourself. You have the flexibility to contribute a flat-dollar amount or a percentage of wages to employee accounts. A SEP IRA is a good option for entrepreneurs facing periods of inconsistent earnings. Unlike other plans, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs operate like traditional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Employers of any type, including self-employed individuals can open 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, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan meant for businesses without employees or where the only employee is a spouse. Solo 401(k)s operate much like standard 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This provides more savings compared to 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: This plan is exclusively for 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 have the ability to make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, subject to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your net earnings from self-employment, 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 individuals aged 50+ (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 guarantees a fixed, predetermined benefit to self-employed individuals upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but allows self-employed individuals to know exactly how much they'll have in retirement. This plan is best suited for high-earning professionals who are focused on saving a significant sum for retirement and are prepared to contribute sizeable contributions. Contributions offer tax-deferred growth, and withdrawals are taxable as income upon retirement.
Eligibility: Any self-employed individual 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 generally advised for those over 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans include:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% with plans to contribute more
- Organizations showing consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The cap on contributions must be determined by an actuary determined by your earnings, age, and retirement objectives. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Glendale, CA for Your Self-Employed Retirement Plan
Working with a financial advisor in Glendale, CA focused on self-employed retirement strategies is an essential partner for entrepreneurs. They offer the knowledge to assist navigate the complexities of retirement planning and develop a tailored strategy that aligns with your goals. An expert in your area will assess where you stand financially, determine how much risk you’re comfortable with, and guide you in selecting the best options about saving and investing for retirement. Part of what we do for you involves:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Further adapt the plan to fit you personally even further
- Adopt a written plan as required by IRS rules
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Track and fine-tune your plan when necessary
- Deliver continuous support and financial insights as you continue on the road to retirement
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Glendale, CA: Correct Capital's Process
Self-employed individuals in Glendale, CA who lack the time, interest, or knowledge to manage their own retirement planning independently often feel overwhelmed by their choices. Through our team at Correct Capital, our Glendale, CA financial advisors take on the lion's share of your savings plan setup for you, working to make meeting your financial objectives as easy as possible for you. We can help you get set up your self-employed retirement plan in four simple steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can help understand if we're a good fit for you and your business. This initial call helps us get a sense of your goals with no pressure or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll gather information, including how many employees you have (if any), your existing financial picture, and your future objectives. This helps us create a custom plan suited specifically for your needs.
- Review Your Plan: After we put together a plan based on the information you provide, we'll meet with you and review your plan thoroughly 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 put everything in place so you can initiate your savings journey. Throughout our relationship, we'll meet with you and track your progress to make sure it remains aligned with your goals.
Our Glendale, CA financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Glendale, CA include:
- Comprehensive Financial Planning
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
Call Correct Capital for Your Self-Employed Retirement Plan in Glendale, CA
Your business isn't "just a business" to you, and your Glendale, CA financial advisors should provide more than basic financial recommendations. With Correct Capital, we focus on building a relationship with our clients and their businesses to provide tailored self-employed retirement plans. All our clients in Glendale, CA benefit from our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To begin on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
