Self-employed retirement plans Glendale, CA. The freedom of running your own company in Glendale, CA is one of the greatest advantages of being self-employed. However, this freedom can come with potential drawbacks, especially regarding planning for retirement, as you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, yet countless should consider understanding their retirement options. In addition to having a more secure retirement, seeking advice from a financial advisor in Glendale, CA to establish your self-employed retirement plan can provide significant tax advantages that enable both you and your business to thrive.
Few Glendale, CA wealth management and retirement planning firms truly grasp the challenges faced by entrepreneurs better than Correct Capital. Our founder's father was a small business owner himself (check out our story here), and we 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 basic numbers, and we are dedicated to provide personalized solutions to meet your unique goals. 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 speak with a self-employed financial advisor in Glendale, CA today.
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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 deliver tangible benefits today. With customizable contribution options to substantial tax savings, consulting a financial advisor in Glendale, CA enables you to customize your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
If your income changes annually, a plan like a SEP IRA or Solo 401(k) offers the freedom to tailor how much you save:
- Customizable Contributions: Contribute more during successful years and scale back when your earnings dip, ensuring your plan aligns with your current income.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw without tax penalties in the future—an advantageous choice if you expect your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans provide powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to grow.
- State-Specific Incentives: Based on your location, you could qualify for additional tax breaks as a self-employed individual. These local incentives help 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 contributed a retirement plan, cutting down 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 stocks, bonds, and alternatives can help minimize exposure to risk while still growing your savings.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net prevents you from tapping into your nest egg during tough times and facing tax penalties.
Plan for the Future of Your Glendale, CA Business
A thoughtful retirement strategy enables you to plan ahead for what’s next with your Glendale, CA business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and won’t be included in the sale. These savings offer the steady income you’ll need in the future. Keep in mind that while selling your business results in a capital gain, retirement plan contributions are subject to yearly maximums (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, factoring in 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: For those winding down or handing over their business, your retirement accounts provide financial security during the change. You can also work with a financial advisor with expertise in succession and retirement planning to reduce taxes associated with the transaction.
With the right retirement plan, you can take control of your financial future, cut down your tax obligations, 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 assets in retirement planning. Starting early not only lets you accumulate a larger nest egg but also reduces the pressure of catching up later in life. Here’s why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement may cause a significant impact on the total you’ll have when you retire. The primary reason is compound interest—the financial principle where your investments earn returns, and those returns, subsequently, earn even more returns. The more time your money has to grow, the greater the effect of this growth.
Example: Taylor and Alex are both entrepreneurs. 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 catch up.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time often create substantial growth. Take a look at this scenario showing the power of compounding:
- Starting at age 25: If you invest $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Investing 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.
The earlier you begin, the less you need to save each year to meet your retirement goals.
*These calculations are estimates derived from NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. The scenarios provided are for illustrative purposes only and are not a promise of future results. Outcomes may change based on elements like market conditions, fees, and personal factors. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Glendale, CA, it can be tempting to put more emphasis on reinvesting in your business instead of saving for retirement. That said, starting a plan now gives you the chance to:
- Benefit from tax-deferred growth or penalty-free withdrawals later on.
- Benefit from contribution flexibility that change with your earnings.
- Build a financial cushion that offers peace of mind, no matter how your business develops.
The sooner you start, the less you’ll need to worry about catching up later in life. Building your retirement savings today means taking control of your financial future and giving yourself the opportunity to turn your attention to your objectives—both for your future retirement and your Glendale, CA business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for those working for themselves in Glendale, CA, each providing its own pros and cons. A financial advisor will guide you to understand the benefits and drawbacks of each choice and choose the one best suited for your unique situation. Generally speaking, your self-employed retirement plan options in Glendale, CA consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that offer specific tax advantages. In a traditional 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 tax-free. In both accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, IRAs, including traditional and Roth options are accessible for individuals with an earned 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 serves as a retirement savings option that allows those who are self-employed to set aside a portion of their self-employment income. Contributions are strictly employer contributions an employer, so, as a independent business owner, 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 are obligated to contribute the same amount for them as you do for yourself. You may choose to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for companies with cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs are free of expensive setup or ongoing fees.
SEPs operate like standard IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed 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
If you’re self-employed, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), commonly known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan intended for businesses without employees or when the sole employee is your spouse. This type of plan function similarly to traditional employer-managed 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This provides more savings than SEPs or IRAs; however, the extra savings options can be balanced by more limited investment options. With this type of plan, 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 may establish 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:
- Deferrals as an employee 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 for those aged 50 and above, or $34,750 for those who turn 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your net self-employment income, which is calculated as net profits less half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 if you're over age 50 (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that guarantees a pre-established payout to entrepreneurs upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but lets individuals clearly understand what they'll have in retirement. This option is best suited for high-earning self-employed individuals who are focused on saving a large amount for retirement and are willing to make larger deposits. Contributions are tax deferred, and withdrawals incur taxes as income in retirement.
Eligibility: Any self-employed individual running an owner-only business or with a small staff of under five can open an individual defined benefit plan, but it's generally advised for those over 50 who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans include:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 for individuals 50 and older)
- Businesses currently investing 3-4% but are open to increasing contributions
- Companies with proven consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The cap on contributions requires calculation from an actuary using your income, age, and retirement goals. Contribution limits change annually.
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 can be an important asset for self-employed individuals. They have the expertise to help understand the intricacies of saving for retirement and craft a personalized approach that reflects your aspirations. A financial advisor in Glendale, CA will review your finances, identify your risk preferences, and help you in making informed decisions about saving and investing for retirement. A key part of what we do for you includes:
- Guide you in choosing a plan that best fits your needs and goals
- Tailor the plan to your needs even further
- Create a written plan that complies with IRS regulations
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Monitor and adjust your plan when necessary
- Offer continued financial education and guidance to help you navigate your retirement journey
- Boost your retirement earnings by optimizing your social security benefits
Self-Employed Retirement Plans in Glendale, CA: Correct Capital's Process
Entrepreneurs in Glendale, CA who don’t have the time or expertise to oversee their self-employed retirement plan independently often feel overwhelmed when faced with their available plans. With Correct Capital, our Glendale, CA financial advisors manage the majority of your retirement planning for you, to help make meeting your retirement goals as straightforward as possible for you. We can help you get set up your self-employed retirement plan in four simple steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team can help understand if our services align for you and your business. This brief introduction allows us to understand what you're looking for with zero commitment or extensive time commitment on your part.
- Gather Information: Should we agree to proceed, we'll request information, including whether you have employees, your existing financial picture, and your long-term savings targets. This helps us create a tailored approach suited specifically for your needs.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll schedule a meeting and go over your plan step by step to make sure it's clear 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 start saving. Throughout our relationship, we'll meet with you and monitor your plan to ensure it stays suited to your needs.
Our Glendale, CA 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, CA 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 Glendale, CA
Your business isn't "just a business" to you, and your Glendale, CA financial advisors must deliver more than basic financial recommendations. At Correct Capital, we make it a priority to understand our clients and their businesses to create personalized self-employed retirement plans. To every client in Glendale, CA, we provide 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.
