Self-employed retirement plans Glendale, CA. The independence of owning your own business in Glendale, CA is one of the best aspects of having a self-directed career. However, this flexibility can come with a lack of security, especially when it comes to retirement savings, as you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off looking into other possibilities. In addition to enjoying a more comfortable retirement, working with a financial advisor in Glendale, CA to create your self-employed retirement plan can provide significant tax advantages that allow your business to grow and succeed.
Few Glendale, CA financial advisory and retirement planning firms are as attuned to the requirements of entrepreneurs as well as Correct Capital. Our founder's father was a small business owner himself (learn more about our story here), and Correct Capital take pride in assisting business owners in their retirement planning needs. We know that your professional and personal aspirations go far beyond just monetary concerns, and we work tirelessly to offer customized solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Glendale, CA, or call 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 immediate benefits today. With customizable contribution options to considerable tax savings, partnering with a financial advisor in Glendale, CA helps you design your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
If your income changes annually, a plan like a SEP IRA or Solo 401(k) offers the option to adjust how much you save:
- Customizable Contributions: Contribute more during successful years and reduce savings when income is lower, so that your plan works with your cash flow.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw your savings tax-free down the road—a wise move if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, so you can keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you may be eligible for extra credits as a business owner. These state-level incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax credit of up to 50% of the first $2,000 put into a retirement plan, cutting down 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: Spreading your investments across different stocks, bonds, and alternatives serves to mitigate financial risk while still growing your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund prevents you from using your retirement funds during challenging periods and incurring penalties.
Plan for the Future of Your Glendale, CA Business
Retirement planning also helps you plan ahead for what’s next with your Glendale, CA business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain yours and won’t be included in the sale. These savings ensure the steady income you’ll need in the future. Keep in mind that while the sale of a business usually creates 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, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you’ll owe when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg offer a stable foundation through the transition. You may also partner with a financial advisor experienced in both succession and retirement strategies to reduce taxes on the sale.
With the right retirement plan, you manage your financial future, reduce your tax burden, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Glendale, CA 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 minimizes the stress of saving aggressively in the future. Here’s why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement may cause a significant impact on the savings you’ll have when you reach retirement age. The primary reason is compound interest—the financial principle where your investments generate earnings, and those returns, in turn, earn even more returns. The more time your money has to grow, the more significant the impact of this growth.
Example: Two individuals, Alex and Taylor are both self-employed individuals. They each aim 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 puts away $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex puts in $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
Regular, modest investments contributed over time may result in substantial 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 projected return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month yields only $235,412.97* by age 65—a gap of over $260,000, simply due to a 10-year delay.
Saving early, the less effort required each year to achieve your retirement goals.
*These calculations are 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. This information is meant to provide general guidance and are not a promise of future results. Outcomes may change based 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, CA, it can be tempting to prioritize reinvesting in your business over saving for retirement. That said, initiating a plan now allows you to:
- Leverage tax-free future growth or tax-free withdrawals down the road.
- Take advantage of flexible contributions that adapt to your cash flow.
- Create a long-term safety measure that ensures stability, no matter how your business develops.
Starting early, the less you’ll need to worry about playing catch-up later in life. Saving for retirement now means managing your financial future and creating for yourself the freedom to turn your attention to your goals—both for your golden years and your Glendale, CA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for self-employed individuals in Glendale, CA, each with its own benefits and trade-offs. A financial advisor can help you understand the advantages and disadvantages of each plan and determine the one most suitable for your unique situation. Generally speaking, your self-employed retirement plan options in Glendale, CA are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that provide specific tax advantages. In a conventional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but retirement distributions are taxable. In contrast, Roth IRA contributions using income already taxed, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals don’t incur penalties as long as you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are available to anyone with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you're 50 or older.
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 must come from an employer, so, as a independent business owner, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) allocate. 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 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 don’t have the high fees associated with starting or maintaining other plans.
SEPs work like traditional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can establish 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 amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses with no employees or if the only employee is your spouse. This type of plan function similarly to traditional employer-managed 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This provides more savings than SEPs or IRAs; however, the increased savings potential can be balanced by more limited investment options. 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: 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: If you are self-employed 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-employment income, capped at the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you're over 50, or $34,750 for those who turn 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your net earnings from self-employment, 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 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: The defined benefit plan represents a type of retirement plan that guarantees a set amount to business owners upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but allows self-employed individuals to know the precise amount they'll get in retirement. This option is ideal for wealthier self-employed individuals who are focused on saving a substantial amount for retirement and are prepared to contribute 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 a small staff of under five may establish an individual defined benefit plan, but it's generally suggested for people above age 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans include:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% and are willing to do more
- Organizations that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The contribution limit requires calculation from an actuary using your financial situation, age, and savings targets. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Glendale, CA for Your Self-Employed Retirement Plan
A financial advisor in Glendale, CA focused on self-employed retirement strategies can be an important asset for those working for themselves. They have the expertise to help guide you through the challenges of retirement planning and craft a personalized approach that aligns with your goals. Your advisor in Glendale, CA will review your finances, identify your risk preferences, and help you in choosing wisely about saving and investing for retirement. Part of what we do for you includes:
- Guide you in choosing a plan that suits your unique requirements
- Further adapt the plan to your needs even further
- Formalize a plan in writing that complies with IRS regulations
- Organize a trust plan to manage your assets
- 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 to help you navigate your retirement journey
- 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 aren’t equipped with the time or understanding to handle their self-employed retirement plan independently can become overwhelmed when faced with their available plans. With Correct Capital, our Glendale, CA financial advisors manage the majority of your retirement strategy for you, working to make meeting your retirement goals as easy as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team can determine if we're a good fit for you and your business. This brief introduction helps us learn about your needs with zero commitment or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including how many employees you have (if any), your existing financial picture, and your long-term savings targets. This helps us create a tailored approach that aligns with your goals.
- Review Your Plan: After we put together a plan using the information you provide, we'll schedule a meeting and review your plan in detail to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can start saving. As time goes on, we'll check in and review your strategy to make sure it remains aligned with your goals.
Our Glendale, CA financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are committed by law and ethics to act in your best interest.
Other financial advisory services we offer in Glendale, CA 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, CA
You don't see your business as "just a business", and your Glendale, CA financial advisors should provide more than simply sound financial advice. With Correct Capital, we take the time to get to know our clients and their businesses to provide customized self-employed retirement plans. All our clients in Glendale, CA benefit from our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To get started on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
