Self-employed retirement plans Greensboro, NC. The flexibility of being your own boss in Greensboro, NC offers many benefits of working for yourself. Even so, this freedom can come with a lack of security, particularly when it comes to retirement savings, as you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many should consider looking into other possibilities. In addition to having a more comfortable retirement, working with a financial advisor in Greensboro, NC to set up your self-employed retirement plan can provide significant tax advantages that help both you and your business to thrive.
Few Greensboro, NC investment consulting and retirement planning firms truly grasp the challenges faced by small business owners as well as Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and our firm are deeply experienced in helping businesses with their retirement planning needs. We understand that your business and retirement aspirations extend well past basic numbers, and we are dedicated to offer personalized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Greensboro, NC, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Greensboro, NC today.
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Why Greensboro, NC 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 tangible benefits today. From flexible contributions to considerable tax savings, partnering with a financial advisor in Greensboro, NC helps you customize your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income over time, 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 your plan works with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, so you can withdraw tax-free later—an advantageous choice if you believe your tax rate is likely to rise in the future.
Save Money on Taxes
Plans designed for the self-employed offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) 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 accumulate.
- State-Specific Incentives: Based on your location, you could qualify for additional tax breaks as a business owner. These local incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals 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 linked to the way you invest:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and other assets serves to mitigate financial risk while helping to grow your savings.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund ensures you don’t tapping into your nest egg during tough times and facing tax penalties.
Plan for the Future of Your Greensboro, NC Business
Retirement planning enables you to plan ahead for what’s next with your Greensboro, NC business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and don’t transfer with the business. These plans offer the steady income you’ll need during retirement. Remember that while selling a business often leads to a capital gain, retirement plan contributions are subject to yearly maximums (e.g., up to $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you are required to pay when you transfer your business.
- Succession Planning: If you’re passing the business on, your nest egg offer a stable foundation through the transition. You can also work with a financial advisor who specializes in succession planning and retirement accounts to help with taxes associated with the transaction.
With the proper savings strategy, you manage your financial future, lower your tax bill, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Greensboro, NC Now?
Time is one of the most crucial assets in retirement planning. Getting a head start not only allows you to build a bigger financial cushion but also minimizes the financial burden of catching up later in life. Here’s why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings may cause a substantial impact on the amount you’ll have when you stop working. The biggest reason is compound interest—the financial principle where your investments grow, and those returns, then, accumulate even more returns. The longer your money has to grow, the greater the impact of this compounding process.
Example: Two individuals, Alex and Taylor are both self-employed individuals. They each aim to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor delays savings until age 40 but contributes $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Small, consistent savings invested steadily can lead to substantial growth. Take a look at this scenario showing the effect of compound interest:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month would result in only $235,412.97* by age 65—a gap of over $260,000, simply due to a 10-year delay.
Starting sooner, the less you need to save each year to meet your retirement goals.
*These calculations represent estimates derived from 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 intended as illustrative examples and cannot predict actual future outcomes. Outcomes may change based on elements like market conditions, fees, and individual circumstances. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Greensboro, NC, it can be tempting to put more emphasis on reinvesting in your business rather than saving for retirement. That said, initiating a plan now enables you to:
- Take advantage of tax-free future growth or withdrawals without taxes down the road.
- Benefit from contribution flexibility that align with your earnings.
- Establish a long-term safety measure that provides security, no matter how your business changes.
The sooner you start, the less you’ll need to worry about making up for lost time later in life. Saving for retirement now means managing your financial future and allowing yourself the freedom to focus on your objectives—both for your golden years and your Greensboro, NC business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for those working for themselves in Greensboro, NC, each providing its own pros and cons. A financial advisor will guide you to learn about the advantages and disadvantages of each choice and determine the one best suited for your circumstances. In most cases, your self-employed retirement plan options in Greensboro, NC are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that provide distinct tax benefits. In a conventional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but retirement distributions 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 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, both traditional and Roth IRAs are accessible for individuals with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA serves as a retirement savings option that allows entrepreneurs to set aside a portion of their self-employment income. Contributions must come from an employer, so, as a self-employed individual, you (the employee) would not be able to contribute 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. SEP IRAs may be ideal for companies with cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs function like standard IRAs, where you contribute pre-tax dollars 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 allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed intended for companies that have no employees or if the only employee is your spouse. This type of plan function similarly to standard 401(k) plans, and allow you to contribute as both an employee or an employer with pre-tax money. This provides more savings versus SEPs or IRAs; however, the additional opportunities may be offset 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: Only business owners and their spouses are eligible to open and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you are allowed to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 for those who turn 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your adjusted self-employment income, which is defined as 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 (in 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan represents a type of retirement plan that provides a fixed, predetermined benefit to self-employed individuals upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but enables participants to determine the precise amount they'll get in retirement. This strategy is ideal for wealthier self-employed individuals who want to save a significant sum for retirement and are prepared to contribute larger deposits. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income during retirement.
Eligibility: Entrepreneurs running an owner-only business or with less than five employees can open an individual defined benefit plan, but it's most commonly suggested for people above age 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)
- Companies already contributing 3-4% and are willing to do more
- Businesses that have demonstrated consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution must be determined by an actuary using your earnings, age, and retirement objectives. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Greensboro, NC for Your Self-Employed Retirement Plan
Working with a financial advisor in Greensboro, NC focused on self-employed retirement strategies can be an essential partner for those working for themselves. They have the expertise to help guide you through the challenges of retirement planning and develop a customized plan that aligns with your goals. An expert in your area will evaluate your financial situation, determine how much risk you’re comfortable with, and assist you in making informed decisions about saving and investing for retirement. Included in what we do for you involves:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Customize the plan to fit you personally even further
- Adopt a written plan as required by IRS rules
- Set up an asset trust plan
- Help you understand the plan's terms
- Monitor and adjust your plan when necessary
- Deliver continuous support and financial insights to help you navigate your retirement journey
- Maximize what you receive in retirement by making the most of your social security
Self-Employed Retirement Plans in Greensboro, NC: Correct Capital's Process
Self-employed individuals in Greensboro, NC who lack the time, interest, or knowledge to handle their retirement savings strategy independently often feel overwhelmed when faced with their options. Through our team at Correct Capital, our Greensboro, NC financial advisors manage the lion's share of your savings plan setup for you, working to make meeting your financial objectives 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: A quick 20-minute call is all it takes, a member of our advisor team can determine if our services align for you and your business. This initial call lets us learn about your needs with no obligation or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll request information, including how many employees you have (if any), your current financial situation, and your long-term savings targets. This helps us create a tailored approach designed just for you.
- Review Your Plan: After we put together a plan based on the information you provide, we'll sit down with you and review your plan step by step to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll implement the necessary steps so you can initiate your savings journey. Throughout our relationship, we'll have regular meetings and track your progress to keep it tailored to your evolving circumstances.
Our Greensboro, NC 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 Greensboro, NC 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 Greensboro, NC
You don't see your business as "just a business", and your Greensboro, NC financial advisors must deliver more than just good financial guidance. At Correct Capital, we take the time to get to know our clients and their businesses to create customized self-employed retirement plans. We offer all our Greensboro, NC clients our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To begin on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
