Self-employed retirement plans Hayward, CA. The freedom of being your own boss in Hayward, CA offers many benefits of working for yourself. However, this flexibility can come with a lack of security, particularly when it comes to planning for retirement, as you don't have access to 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 enjoying a more comfortable retirement, seeking advice from a financial advisor in Hayward, CA to create your self-employed retirement plan offers significant tax advantages that enable your business to grow and succeed.
Few Hayward, CA wealth management and retirement planning firms understand the needs of small business owners better than Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and we have a rich history of assisting business owners in their retirement planning needs. We recognize that your professional and personal aspirations aren’t limited to simple financial figures, and we work tirelessly to offer personalized solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Hayward, CA, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Hayward, CA today.
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Why Hayward, 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 immediate benefits today. From flexible contributions to significant tax savings, partnering with a financial advisor in Hayward, CA allows you to design your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) offers the flexibility to modify how much you save:
- Customizable Contributions: Set aside more during profitable years and reduce savings when revenues are down, so that your plan works with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw your savings tax-free down the road—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 provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, so you can keep more of your earnings.
- 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 might access extra deductions as a sole proprietor. These state-level incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can take advantage of a credit of up to 50% of the first $2,000 contributed a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Allocating your investments across a mix of asset classes like stocks and bonds is a smart way to reduce risk while continuing to build your savings.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net ensures you don’t tapping into your nest egg during financial hardships and risking extra costs.
Plan for the Future of Your Hayward, CA Business
A thoughtful retirement strategy enables you to think through what’s next with your Hayward, CA business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These plans ensure the financial stability you’ll need in the future. Remember that while selling a business often leads to a capital gain, contributions to retirement accounts are capped at annual limits (e.g., a maximum of $7,000 for IRAs or up to $70,000 for Solo 401(k)s, with catch-up contributions, based on plan compensation).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you might face when you transfer your business.
- Succession Planning: If you’re passing the business on, your nest egg offer financial security through the transition. You might want to seek advice from a financial advisor with expertise in succession and retirement planning to reduce taxes on the sale.
With the proper savings strategy, you manage your financial future, lower your tax bill, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Hayward, CA Now?
Time is one of the most valuable assets when it comes to saving for retirement. Starting early not only helps you grow a bigger financial cushion but also minimizes the pressure of saving aggressively in the future. This is why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings can have a major impact on the savings you’ll have when you retire. The main reason is compound interest—the financial principle where your investments grow, and those returns, subsequently, accumulate even more returns. The greater time span your money has to grow, the larger the effect of this compounding process.
Example: Alex and Taylor are both self-employed professionals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but saves $7,500 annually to make up for lost time.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and accumulates $691,184.39*.
- Taylor contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time often create impressive growth. Take a look at this scenario showing the power of compound interest:
- Starting at age 25: By investing $200 per month in a retirement plan with an average annual return 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.
*The numbers shown in this scenario represent estimates derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. This information is meant to provide general guidance and are not a promise of future results. Actual results may vary depending on factors such as market conditions, fees, and personal factors. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Hayward, CA, it can be tempting to focus more on reinvesting in your business rather than saving for retirement. That said, initiating a plan now enables you to:
- Benefit from tax-deferred growth or penalty-free withdrawals later on.
- Enjoy adjustable savings that adapt to your cash flow.
- Create a long-term safety measure that offers peace of mind, no matter how your business changes.
Starting early, the less you’ll be required to worry about playing catch-up later in life. Taking steps toward your retirement goals today means taking control of your financial future and giving yourself the freedom to turn your attention to your goals—both for your retirement years and your Hayward, CA business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for those working for themselves in Hayward, CA, each offering its own benefits and trade-offs. A financial advisor will guide you to evaluate the advantages and disadvantages of each plan and choose the one ideal for your unique situation. In most cases, your self-employed retirement plan options in Hayward, CA consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that provide distinct tax benefits. In a standard IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but withdrawals in retirement are taxed as income. In contrast, Roth IRA contributions using income already taxed, but eligible distributions during retirement, including earnings, are not taxed. In both types of accounts, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are open to those with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs is a retirement plan that allows entrepreneurs to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a independent business owner, you (the employee) would not be able to contribute above the 25% you (the employer) have designated. If you have employees, you must contribute the same amount for them as you do for yourself. It's your choice whether to contribute a fixed dollar figure or a percentage of wages to employee accounts. SEP IRAs is a good option for companies with periods of inconsistent earnings. Compared to other retirement options, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs operate like traditional IRAs, where you contribute pre-tax dollars 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 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), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan designed for companies that have no employees or if the only employee is your spouse. This type of plan operate much like employer-sponsored 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the additional opportunities may be offset 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: This plan is exclusively for business owners and their spouses can set up 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:
- Elective deferrals (as an employee) of up to 100% of your self-employment income, subject to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 for those aged 50 and above, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) cannot exceed 25% of your net earnings from self-employment, 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 for individuals aged 50+ (for 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan offers a structured retirement solution that delivers a set amount to business owners upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but enables participants to determine exactly how much they'll receive in retirement. This option is recommended for high-earning professionals who aim to accumulate a large amount for retirement and are prepared to contribute sizeable contributions. Contributions are tax deferred, and withdrawals incur taxes as income upon retirement.
Eligibility: Any self-employed individual operating a solo business or with a small staff of under five can open an individual defined benefit plan, but it's typically recommended for those over 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans are:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Organizations that already put in 3-4% and are willing to do more
- Organizations that have demonstrated consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The contribution limit is calculated by an actuary using your income, age, and retirement goals. Contribution limits change annually.
The Importance of a Financial Advisor in Hayward, CA for Your Self-Employed Retirement Plan
Working with a financial advisor in Hayward, CA experienced with retirement plans for the self-employed serves as an important asset for those working for themselves. They offer the knowledge to assist guide you through the challenges of retirement planning and craft a tailored strategy that aligns with your goals. A financial advisor in Hayward, CA will evaluate your financial situation, understand your risk tolerance, and assist you in selecting the best options about saving and investing for retirement. Included in what we do for you includes:
- Guide you in choosing a plan that suits your unique requirements
- 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 as needed
- Offer continued financial education and guidance as you continue on the road to retirement
- Maximize what you receive in retirement by maximizing your social security benefits
Self-Employed Retirement Plans in Hayward, CA: Correct Capital's Process
Self-employed individuals in Hayward, CA who aren’t equipped with the time or understanding to oversee their self-employed retirement plan themselves can become overwhelmed as they look at their available plans. With Correct Capital, our Hayward, CA financial advisors handle the lion's share of your retirement planning for you, to help make meeting your financial objectives as easy as possible for you. We are here to assist you in setting 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 will assess if we're a good fit for you and your business. This brief introduction helps us learn about your needs with no pressure or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including whether you have employees, your present financial standing, and your future objectives. This allows us to put together a personalized strategy suited specifically for your needs.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll schedule a meeting and discuss your plan step by step to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: When we finalize on your plan, we'll implement the necessary steps so you can initiate your savings journey. As time goes on, we'll meet with you and monitor your plan to make sure it remains aligned with your goals.
Our Hayward, CA financial advisors and retirement plan consultants serve 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 Hayward, 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 Hayward, CA
You don't see your business as "just a business", and your Hayward, CA financial advisors need to offer more than just good financial guidance. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to provide customized self-employed retirement plans. We offer all our Hayward, CA clients our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
