Self-employed retirement plans Hialeah, FL. The flexibility of owning your own business in Hialeah, FL offers many benefits of working for yourself. However, this flexibility often comes with certain challenges, notably in terms of retirement savings, as you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many could benefit from understanding their retirement options. In addition to enjoying a financially stable retirement, seeking advice from a financial advisor in Hialeah, FL to create your self-employed retirement plan delivers significant tax advantages that help your business to grow and succeed.
Few Hialeah, FL investment consulting and retirement planning firms understand the needs of entrepreneurs better than Correct Capital. Our founder's father was a small business owner himself (learn more about our story here), and our firm are deeply experienced in assisting business owners in their retirement planning needs. We know that your professional and personal aspirations aren’t limited to just monetary concerns, and we work tirelessly to provide personalized solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Hialeah, FL, or reach out to Correct Capital at 877-930-401k or contact us online to talk to a entrepreneurial financial advisor in Hialeah, FL today.
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Why Hialeah, FL Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also provide immediate benefits today. Offering flexibility in contributions to substantial tax savings, working with a financial advisor in Hialeah, FL helps you create 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) provides the flexibility to adjust how much you save:
- Customizable Contributions: Save extra during successful years and cut back when your earnings dip, so that your plan works with your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw without tax penalties in the future—an advantageous choice if you believe your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, so you can keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, which gives your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for extra deductions as a business owner. These regional 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 put into a retirement plan, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement goes beyond just how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Allocating your investments across a mix of asset classes like stocks and bonds can help minimize exposure to risk while still growing your savings.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business prevents you from dipping into savings during challenging periods and risking extra costs.
Plan for the Future of Your Hialeah, FL Business
A thoughtful retirement strategy can assist you plan ahead for what’s next with your Hialeah, FL business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s remain yours and are not part of the sale. These plans can provide the steady income you’ll need during retirement. Remember that while selling your business results in a capital gain, deposits into these plans are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, based on plan compensation).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you are required to pay when you transfer your business.
- Succession Planning: For those winding down or handing over their business, your nest egg provide the funds you need during the change. You can also work with a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens during the sale.
With the right retirement plan, you manage your financial future, reduce your tax burden, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Hialeah, FL Now?
Time remains one of the most important resources when it comes to saving for retirement. Starting early not only lets you accumulate a larger nest egg but also minimizes the financial burden of playing catch-up as you get older. This is why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings may cause a significant impact on the savings you’ll have when you reach retirement age. The biggest reason is compound interest—the concept where your investments grow, and those returns, subsequently, earn even more returns. The more time your money has to grow, the greater the effect of compounding.
Example: Two individuals, Alex and Taylor are both self-employed individuals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but saves $7,500 annually to catch up.
By age 65, with an assumption of 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
Even modest contributions contributed over time may result in impressive growth. Consider this example showing the impact 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 end up with $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month yields only $235,412.97* by age 65—a shortfall of over $260,000, simply due to a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to reach your retirement goals.
*The numbers shown in this scenario are based on estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. This information is intended as illustrative examples and cannot predict actual future outcomes. Your individual results may differ due to elements like market conditions, fees, and personal factors. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Hialeah, FL, it can be tempting to put more emphasis on reinvesting in your business over saving for retirement. Even so, beginning a plan now gives you the chance to:
- Leverage tax-free future growth or penalty-free withdrawals in the future.
- Benefit from flexible contributions that change with your cash flow.
- Establish a safety net that offers peace of mind, no matter how your business evolves.
Starting early, the less you’ll have to worry about making up for lost time later in life. Taking steps toward your retirement goals today means managing your financial future and giving yourself the ability to turn your attention to your dreams—both for your golden years and your Hialeah, FL business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for self-employed individuals in Hialeah, FL, each with its own pros and cons. A financial advisor is available to help you learn about the advantages and disadvantages of each option and choose the one ideal for your unique situation. Typically, your self-employed retirement plan options in Hialeah, FL consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that provide distinct tax benefits. In a traditional 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 are made with after-tax income, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both cases, withdrawals don’t incur penalties if you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are available to anyone with taxable earnings.
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: The Simplified Employee Pension IRA is a retirement plan that enables self-employed individuals to contribute a percentage of their net earnings. Contributions are strictly employer contributions an employer, so, as a sole proprietor, you (the employee) would not be able to contribute more than the 25% you (the employer) already contributed. 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. This type of plan is a good option for businesses that experience periods of inconsistent earnings. Unlike other plans, SEP IRAs are free of costly startup or administrative fees.
SEPs operate like traditional IRAs, where contributions are made with pre-tax money and withdrawals are taxed as income.
Eligibility: Employers of any type, including self-employed individuals can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 25% of compensation, or
- $70,000 for 2025
For self-employed individuals, the contribution you can make 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 self-employed retirement plan designed for companies that have no employees or if the only employee is your spouse. This type of plan are similar to traditional employer-managed 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This provides more savings versus SEPs or IRAs; however, the increased savings potential can be balanced by more limited investment options. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which share 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: 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 self-employed earnings, capped at the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you're over 50, or $34,750 if you attain age 60-63 in 2025.
- Contributions as an employer (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 for individuals aged 50+ (as of 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan offers a structured retirement solution that guarantees 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 allows self-employed individuals to know what they'll have in retirement. This option is recommended for wealthier self-employed individuals who aim to accumulate a substantial amount for retirement and are willing to make substantial contributions. Contributions offer tax-deferred growth, and withdrawals are taxed as income upon retirement.
Eligibility: Any self-employed individual managing a one-person company or with a small staff of under five are eligible to open an individual defined benefit plan, but it's most commonly advised for people above age 50 who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans are:
- Business owners or partners who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% but are open to increasing contributions
- Businesses with proven consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The contribution limit requires calculation from an actuary determined by your income, age, and retirement goals. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Hialeah, FL for Your Self-Employed Retirement Plan
A financial advisor in Hialeah, FL focused on self-employed retirement strategies is an invaluable resource for those working for themselves. They have the expertise to help guide you through the challenges of retirement planning and develop a personalized approach that aligns with your goals. An expert in your area will review your finances, identify your risk preferences, and assist you in making informed decisions about saving and investing for retirement. Part of what we do for you features:
- Assist in selecting a plan that best fits your needs and goals
- Tailor the plan to your specific situation even further
- Formalize a plan in writing as required by IRS rules
- Arrange a trust plan for assets
- Ensure you comprehend 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
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Hialeah, FL: Correct Capital's Process
Entrepreneurs in Hialeah, FL who don’t have the time or expertise to oversee their own retirement planning independently often feel overwhelmed by their available plans. With Correct Capital, our Hialeah, FL financial advisors take on the lion's share of your savings plan setup for you, working to make meeting your future savings targets as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- 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 initial call helps us get a sense of your goals with no pressure or extensive time commitment on your part.
- Gather Information: Should we agree to proceed, we'll gather information, including whether you have employees, your present financial standing, and your long-term savings targets. This enables us to craft a tailored approach designed just for you.
- Review Your Plan: When we finalize a plan from the information you provide, we'll meet with you and go over your plan thoroughly to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can begin contributing. Throughout our relationship, we'll meet with you and review your strategy to make sure it remains aligned with your goals.
Our Hialeah, FL financial advisors and retirement plan consultants serve as fiduciary advisors, meaning they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Hialeah, FL 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 Hialeah, FL
You don't see your business as "just a business", and your Hialeah, FL financial advisors need to offer more than basic financial recommendations. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to deliver customized self-employed retirement plans. To every client in Hialeah, FL, we provide 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.
