Self-employed retirement plans Grand Prairie, TX. The flexibility of owning your own business in Grand Prairie, TX offers many benefits of working for yourself. Even so, this flexibility sometimes brings with potential drawbacks, particularly regarding planning for retirement, because you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off exploring their options. In addition to achieving a more comfortable retirement, working with a financial advisor in Grand Prairie, TX to set up your self-employed retirement plan can provide significant tax advantages that allow your business to grow and succeed.
Few Grand Prairie, TX investment consulting and retirement planning firms are as attuned to the requirements of self-employed individuals as well as Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and we are deeply experienced in assisting business owners in their retirement planning needs. We understand that your business and retirement aspirations aren’t limited to just monetary concerns, and we are dedicated to offer customized solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Grand Prairie, TX, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Grand Prairie, TX today.
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Why Grand Prairie, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver real benefits today. With customizable contribution options to significant tax savings, partnering with a financial advisor in Grand Prairie, TX helps you customize your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary from year to year, a plan like a SEP IRA or Solo 401(k) provides the option to adjust how much you save:
- Customizable Contributions: Set aside more during profitable years and cut back when your earnings dip, ensuring your plan aligns with your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw without tax penalties in the future—a wise move if you expect your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA shrink your tax liability, helping you keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to compound.
- State-Specific Incentives: In some states, you may be eligible for extra tax breaks as a business owner. These local incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a credit of up to 50% of the first $2,000 contributed a retirement plan, helping to lower 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 linked to the way you invest:
- Diversified Portfolios: Distributing your investments across different asset classes like stocks and bonds serves to reduce risk while helping to grow your savings.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund helps you avoid dipping into savings during tough times and risking extra costs.
Plan for the Future of Your Grand Prairie, TX Business
A thoughtful retirement strategy enables you to think through what’s next with your Grand Prairie, TX business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These plans offer the financial stability you’ll need later on. Remember that while selling your business results in a capital gain, deposits into these plans are capped at annual limits (e.g., a maximum of $7,000 for IRAs or up to $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 are required to pay when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement savings ensure the funds you need through the transition. You can also partner with a financial advisor experienced in both succession and retirement strategies to minimize tax burdens associated with the transaction.
With the right retirement plan, you gain control over your financial future, lower your tax bill, and build a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Grand Prairie, TX Now?
Time remains one of the most valuable resources when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a more substantial retirement fund but also lowers the financial burden of saving aggressively in the future. Here’s why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings can have a significant impact on the amount you’ll have when you reach retirement age. The biggest 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 more significant the benefit of compounding.
Example: Alex and Taylor are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor delays savings until age 40 but puts away $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions made consistently may result in substantial growth. Here’s a simple scenario showing the power of consistent growth:
- Starting at age 25: If you invest $200 per month in a retirement plan with an average annual return of 7%, you’ll grow to approximately $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.
Starting sooner, the less effort required each year to reach your retirement goals.
*The figures provided in this example are based on estimates derived from NerdWallet’s Compound Interest Calculator, with the assumption of 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. Your individual results may differ depending on variables including market conditions, fees, and personal factors. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Grand Prairie, TX, it is often the case that you prioritize reinvesting in your business instead of saving for retirement. However, beginning a plan now allows you to:
- Leverage growth that is tax-deferred or withdrawals without taxes later on.
- Enjoy contribution flexibility that adapt to your earnings.
- Establish a financial cushion that ensures stability, no matter how your business evolves.
Starting early, the less you’ll have to worry about playing catch-up later in life. Building your retirement savings today means managing your financial future and allowing yourself the ability to turn your attention to your objectives—both for your retirement years and your Grand Prairie, TX business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for self-employed individuals in Grand Prairie, TX, each with its own advantages and considerations. A financial advisor can help you evaluate the pros and cons of each choice and identify the one most suitable for your unique situation. Generally speaking, your self-employed retirement plan options in Grand Prairie, TX consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that provide 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 IRA contributions are made with after-tax income, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both accounts, withdrawals come without penalties if you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are accessible for individuals with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs is a retirement plan that permits self-employed individuals to contribute a percentage of their net earnings. Contributions are strictly employer contributions an employer, so, as a self-employed individual, you (the employee) cannot make additional contributions 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 is a good option for entrepreneurs facing fluctuating revenue streams. Compared to other retirement options, SEP IRAs are free of the high fees associated with starting or maintaining other plans.
SEPs function like standard IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
Eligibility: Any employer, including the self-employed can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 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: The Solo 401(k), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan intended for companies that have no employees or when the sole employee is your spouse. These plans operate much like employer-sponsored 401(k) plans, and allow you to contribute as both the employer and the employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the additional opportunities often come with more restricted investment choices. In a solo 401(k) 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 can set up 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:
- Deferrals as an employee of up to 100% of your earned income from self-employment, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) are limited to 25% of your net self-employment income, which is calculated as net profits less half of your self-employment tax and the elective deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (as of 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 self-employed individuals upon retirement. In contrast to the plans discussed earlier, a defined benefit plan doesn't fluctuate based on investment returns, but lets individuals clearly understand exactly how much they'll receive in retirement. This option is best suited for high-earning professionals who aim to accumulate a large amount for retirement and can commit to making larger deposits. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income in retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees may establish an individual defined benefit plan, but it's typically recommended for individuals aged 50+ who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans are:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% with plans to contribute more
- Organizations 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 contribution limit must be determined by an actuary using your financial situation, age, and savings targets. Allowable contributions are adjusted each year.
The Importance of a Financial Advisor in Grand Prairie, TX for Your Self-Employed Retirement Plan
Partnering with an advisor in Grand Prairie, TX specialized in self-employed retirement plans is an essential partner for entrepreneurs. They offer the knowledge to assist navigate the complexities of retirement planning and develop a tailored strategy that reflects your aspirations. An expert in your area will review your finances, identify your risk preferences, and help you in making informed decisions about saving and investing for retirement. Included in what we do for you includes:
- Assist in selecting a plan that suits your unique requirements
- Tailor the plan to fit you personally even further
- Adopt a written plan that complies with IRS regulations
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Track and fine-tune your plan when necessary
- Offer continued financial education and guidance throughout your retirement planning process
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Grand Prairie, TX: Correct Capital's Process
Grand Prairie, TX business owners who lack the time, interest, or knowledge to handle their self-employed retirement plan themselves can become overwhelmed as they look at their options. Through our team at Correct Capital, our Grand Prairie, TX financial advisors take on the lion's share of your retirement planning for you, and strive to ensure meeting your financial objectives as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team will assess if we're suited to your needs for you and your business. This short conversation lets us get a sense of your goals with no obligation or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including how many employees you have (if any), your present financial standing, and your long-term savings targets. This enables us to craft a personalized strategy suited specifically for your needs.
- Review Your Plan: After we put together a plan using the information you provide, we'll meet with you and go over your plan step by step to help you fully grasp it and show how it aligns with your goals.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can start saving. Over the course of our partnership, we'll check in and monitor your plan to keep it tailored to your evolving circumstances.
Our Grand Prairie, TX financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are required by law and ethical standards to prioritize your needs above all else.
Other financial advisory services we offer in Grand Prairie, TX 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 Grand Prairie, TX
Your business isn't "just a business" to you, and your Grand Prairie, TX financial advisors should provide more than simply sound financial advice. With Correct Capital, we focus on building a relationship with our clients and their businesses to create tailored self-employed retirement plans. To every client in Grand Prairie, TX, we provide our 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, contact Correct Capital now at 877-930-401k or contact us online.
