Self-employed retirement plans Hialeah, FL. The freedom of owning your own business in Hialeah, FL offers many benefits of being self-employed. Even so, this freedom can come with a lack of security, notably in terms of retirement savings, as you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, although many could benefit from exploring their options. In addition to achieving a financially stable retirement, seeking advice from a financial advisor in Hialeah, FL to create your self-employed retirement plan offers significant tax advantages that allow both you and your business to thrive.
Few Hialeah, FL wealth management and retirement planning firms understand the needs of small business owners as well as Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and our firm are deeply experienced in supporting entrepreneurs with their retirement planning needs. We recognize that your goals for your business and retirement go far beyond just monetary concerns, and we strive to create customized solutions aligned with your vision. Keep reading to learn more 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 small business 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 are essential for preparing you for the future, they also offer immediate benefits today. With customizable contribution options to significant tax savings, working with a financial advisor in Hialeah, FL allows you to customize your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) gives you the option to tailor how much you save:
- Customizable Contributions: Save extra during profitable years and reduce savings when your earnings dip, so that your plan fits your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, so you can withdraw your savings tax-free down the road—an advantageous choice if you believe your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals deliver 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: Investments grow tax-free until withdrawal, providing your money more time to compound.
- State-Specific Incentives: Based on your location, you might access extra credits as a sole proprietor. These state-level incentives help make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can claim a tax credit of up to 50% of the first $2,000 they contribute a retirement plan, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure retirement requires more than how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across a mix of asset classes like stocks and bonds serves to reduce risk while continuing to build your savings.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net prevents you from tapping into your nest egg during financial hardships and incurring penalties.
Plan for the Future of Your Hialeah, FL Business
Retirement planning 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 don’t transfer with the business. These plans ensure the financial stability you’ll need later on. Remember that while the sale of a business usually creates a capital gain, retirement plan contributions are restricted by contribution 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: Strategically planning your contributions can reduce the taxes you’ll owe when you sell your business.
- Succession Planning: If you’re passing the business on, your nest egg provide financial security during the change. You can also seek advice from a financial advisor with expertise in succession and retirement planning to minimize tax burdens associated with the transaction.
With the proper savings strategy, you manage your financial future, reduce your tax burden, and create a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Hialeah, FL Now?
There’s no denying that time is 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 minimizes the pressure of saving aggressively in the future. The following are reasons why it is beneficial to start now:
The Cost of Waiting
Waiting to start your retirement fund can have a major impact on the amount you’ll have when you stop working. The main reason is compound interest—the powerful process where your investments generate earnings, and those returns, in turn, earn even more returns. The longer your money has to grow, the larger the benefit of this compounding process.
Example: Two individuals, Alex and Taylor are both entrepreneurs. 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 contributes $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently often create significant 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 projected 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 difference of over $260,000, all because of a 10-year delay.
Saving early, the less effort required each year to meet your retirement goals.
*The figures provided in this example represent estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. These examples are meant to provide general guidance and do not guarantee future performance. Outcomes may change due to elements like market conditions, fees, and your unique situation. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Hialeah, FL, it might seem easier to prioritize reinvesting in your business rather than saving for retirement. That said, beginning a plan now gives you the chance to:
- Take advantage of growth that is tax-deferred or penalty-free withdrawals later on.
- Take advantage of flexible contributions that align with your cash flow.
- Build a safety net that provides security, no matter how your business develops.
Getting started now, the less you’ll have to worry about catching up later in life. Saving for retirement now means gaining control over your financial future and giving yourself the ability to focus on your dreams—both for your golden years and your Hialeah, FL business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for entrepreneurs in Hialeah, FL, each providing its own benefits and trade-offs. A financial advisor will guide you to understand the benefits and drawbacks of each choice and choose the one best suited for your unique situation. Generally speaking, your self-employed retirement plan options in Hialeah, FL are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that include specific tax advantages. In a standard IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but retirement distributions are taxable. In contrast, Roth IRAs require contributions from post-tax earnings, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, traditional and Roth IRAs are open to those with an earned income.
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: SEP IRAs serves as a retirement savings option that enables entrepreneurs to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a independent business owner, you (the employee) are limited to contributions from the employer role more than the 25% you (the employer) allocate. If you have employees, it's required to contribute the same amount for them as you do for yourself. You may choose to contribute a fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA may be ideal for businesses that experience periods of inconsistent earnings. In contrast to some alternatives, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs work like conventional IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
Eligibility: Employers of any type, including self-employed individuals 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
As a self-employed person, the contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), also called an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan intended for businesses with no employees or if the only employee is your spouse. This type of plan function similarly to traditional employer-managed 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This offers more savings than SEPs or IRAs; however, the additional opportunities often come with 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: This plan is exclusively for business owners and their spouses may establish 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:
- Employee contributions of up to 100% of your self-employment income, capped at 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 individuals aged 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your adjusted self-employment income, which is your net profit minus half of your self-employment tax and the elective deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 if you're over age 50 (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that provides a fixed, predetermined benefit to self-employed individuals upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but lets individuals clearly understand the precise amount they'll have in retirement. This strategy is ideal for wealthier entrepreneurs who aim to accumulate a significant sum for retirement and are prepared to contribute sizeable contributions. Contributions are tax deferred, and withdrawals are taxed as income in retirement.
Eligibility: Entrepreneurs running an owner-only business or with less than five employees are eligible to open an individual defined benefit plan, but it's generally suggested for individuals aged 50+ who make $250,000 or more annually. Typically, good candidates for defined benefit plans are:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% with plans to contribute more
- Businesses that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The contribution limit requires calculation from an actuary using 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 experienced with retirement plans for the self-employed is an important asset for self-employed individuals. They offer the knowledge to assist guide you through the challenges of retirement planning and design a customized plan that reflects your aspirations. Your advisor in Hialeah, FL will evaluate your financial situation, identify your risk preferences, and help you in making informed decisions about saving and investing for retirement. Part of what we do for you involves:
- Guide you in choosing a plan that best fits your needs and goals
- Tailor the plan to fit you personally even further
- Formalize a plan in writing that complies with IRS regulations
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Review and modify your plan to keep it aligned with your goals
- Deliver continuous support and financial insights as you continue on the road to retirement
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Hialeah, FL: Correct Capital's Process
Hialeah, FL business owners who aren’t equipped with the time or understanding to oversee their retirement savings strategy on their own can become overwhelmed as they look at their options. With Correct Capital, our Hialeah, FL financial advisors handle the lion's share of your savings plan setup for you, working to make meeting your retirement goals as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in four simple steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if we're a good fit for you and your business. This brief introduction lets us get a sense of your goals with no pressure or extensive time commitment on your part.
- Gather Information: If we both decide to move forward, we'll request information, including your employee count, 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 schedule a meeting and go over your plan in detail to make sure it's clear and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can initiate your savings journey. As time goes on, we'll have regular meetings and track your progress to ensure it stays suited to your needs.
Our Hialeah, FL financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in Hialeah, FL include:
- Investment Management
- 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
Your business isn't "just a business" to you, and your Hialeah, FL financial advisors need to offer more than basic financial recommendations. At Correct Capital, we make it a priority to understand our clients and their businesses to deliver tailored self-employed retirement plans. All our clients in Hialeah, FL benefit from our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To get started on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
