Self-employed retirement plans in Glendale, MO. The flexibility involved with having your own business in Glendale, MO is a fantastic aspect of working for yourself. But more leeway can come with limited stability, particularly in terms of saving for retirement, employer-sponsored plans aren't an option. Only a fraction of self-employed people have a workplace retirement plan, but many would be wise to look into their options. In addition to a more comfortable retirement, partnering with a financial advisor to set up your self-employed retirement plan in Glendale, MO offers tax benefits that can help you improve your bottom line.
Few wealth management and retirement planning firms know what it's like to be self-employed or a small business owner than Correct Capital. In fact, we were inspired by a self-employed individual, our founder's father (you can learn more about our story on our website). We know that your business and retirement goals extend far beyond just profit, and we are committed to providing customized solutions that fit your goals. Read on to learn more about your self-employed retirement plan options in Glendale, MO, or call Correct Capital at 314-930-401(k) or fill out our online form to speak to a member of our advisory team today.
Types of Self-Employed Retirement Plans
There are a few different retirement savings plans that the self-employed can establish, and which is best for you depends on your unique situation. A Glendale, MO financial advisor can help you grasp the pros and cons of each option and opt for the most suitable one for your specific needs. Typically, your self-employed retirement plan options in Glendale, MO are comprised of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are investment accounts that allows you to set aside money for the future, with special tax considerations. In a traditional IRA, deposits are typically tax-deductible, and any gains on investments grow tax-deferred, but distributions in retirement are liable to income tax. On the other hand, Roth IRA deposits are made with money you've already paid taxes on, but you pay no taxes on withdrawals or investment gains. In both accounts, distributions can be made without penalty 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 can be set up by anyone with an earned income.
Contribution Limits: For 2023, annual contribution limits for IRAs are $6,500, or $7,500 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 self-employed individuals to contribute a share of of their net earnings from self-employment. Since you are self-employed, you (the employee) have a contribution limit of no more than the 25% already contributed by you (the employer). If you have employees, you must contribute an equal amount to their pensions. You may choose to contribute a flat-dollar amount or a percentage of wages to employee accounts. SEP IRAs may be an excellent self-employed retirement plan if your business experiences periods of variable income. SEP IRAs don't have expensive initial setup or administrative charges often associated with other retirement plans.
SEPs work like traditional IRAs, where deposits are made with money you've yet to pay taxes on and distributions are taxed as income.
Eligibility: Self-employed individuals and any employer, can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are whichever is the least out of:
- 25% of compensation, or
For the self-employed individual, the amount eligible to be contributed is based on a unique calculation.
Plan Overview: A Solo 401(k) plan, also known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan for businesses with no employees or who only employ a spouse. Solo 401(k)s work in the same same way as employer-sponsored 401(k) plans, and you can add funds as an employee and on your own behalf as the employer. This offers more savings than SEPs or IRAs, however the additional opportunities for saving are often counteracted by more limited investment options. In an individual 401(k) plan, you can make either traditional deferrals (with pre-tax money) or Roth deferrals (with after-tax money).
Eligibility: Only sole proprietors and their spouses can set up and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you can make two types of contributions:
- Elective deferrals (as an employee) of a maximum of 100% of your earned income from self-employment, up to the annual contribution limit. In 2023, those limits are $22,500, or $30,000 if you are 50 or older.
- Employer profit-sharing contributions (as an employer) which cannot exceed up to 25% of your net self-employment income, which is your net profit minus half of your self-employment tax and the elective deferrals you made.
The total contribution cannot exceed $66,000, or $73,500 if you're over age 50 (in 2023).
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement plan that provides a an assured monthly figure to self-employed individuals once they've retired. As opposed to other types of retirement plans, a defined benefit plan doesn't fluctuate based on investment gains, but allows self-employed people to know exactly how much they'll get in retirement. This plan is best suited for high-earning self-employed individuals who want to save a a large amount for retirement and want to add substantial contributions. Contributions are tax deferred and contributions are taxed at your income level in retirement.
Eligibility: Any self-employed individual who runs a business where they're the only owner or has less than five employees can open an individual defined benefit plan, but it's typically only well-suited for those over 50 who earn well into the six figures. Typically, good candidates for defined benefit plans are:
- Partners or owners who want to save more than $66,000 (or $73,500 over age 50)
- Companies already contributing 3-4% who are want to do more
- Companies who are sure of their profit patterns
- Partners or owners over age 40 who want to make up for earlier years when they couldn't save as much
Contribution Limits: The contribution limit is calculated by an actuary based on your income, age, and retirement goals. Contribution limits change every year.
Why You Need a Financial Advisor for Your Self-Employed Retirement Plan in Glendale, MO
A financial advisor in Glendale, MO specialized in self-employed retirement plans can be a valuable asset for self-employed individuals. They have the expertise to help you navigate the complexities of retirement planning and implement a personalized approach that aligns with your goals. A financial planner will analyze your financial situation, adjust for your risk tolerance, and help you make sound decisions about your financial future. Part of what we do for you includes:
- Help you pick a plan that best fits your needs and goals
- Tailor the plan to your needs even further
- Adopt a written plan in accordance with IRS guidelines
- Arrange a trust plan for assets
- Create a record keeping system
- Help you understand the plan's terms
- Monitor and adjust your plan as needed
- Offer continued financial education and support as you continue on the road to retirement
- Increase your retirement income by increasing your social security benefits
Self-Employed Retirement Plans in Glendale, MO: Correct Capital's Process
Glendale, MO business owners without the time, inclination, or knowledge to handle their self-employed retirement plan themselves can become stressed when looking at their options. At Correct Capital, our financial advisors handle the bulk of the retirement planning work on your behalf, and strive to make achieving your business and retirement goals as easy as we possibly can. We can help you establish and maintain your self-employed retirement plan in four simple steps:
- Schedule a Call — We only need a brief 20-minute call for a member of our advisor team to know if we're a good fit for you and your business. This short introduction allows us to get a feel for your needs with no major time investment on your part.
- Gather Information — If we seem like a good fit, we'll request information, including how many employees you have (if any), your current finances, and what kind of retirement you want to have. This allows us to put together a personalized 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 discuss the details of your plan to ensure you're comfortable with it.
- Implementation and Monitoring — Once we've agreed on your plan, we'll put everything in place so your savings can start growing immediately. As long as we work together, we'll meet with you and adjust your plan so it stays consistent with your needs.
Our financial advisors and retirement consultants are fiduciary advisors who have a legal and moral obligation to do what's best for you and only you. We are proud to provide transparent communication and top-notch service to assist you reach your self-employed retirement goals.
Other services we offer in Glendale, MO include:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
- Retirement Calculator
Call Correct Capital for Your Glendale, MO Self-Employed Retirement Plan
Your business isn't "just a business" to you, and your Glendale, MO financial advisors need to offer more than merely sage financial advice. Correct Capital takes pride in getting to know our clients and their business to deliver personalized self-employed retirement plans. We give all our Glendale, MO clients the same I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To get started on your self-employment retirement plan in Glendale, MO, call Correct Capital today at 314-930-401(k) or contact us online.