Self-employed retirement plans Hollywood, FL. The independence of being your own boss in Hollywood, FL offers many benefits of working for yourself. That said, this freedom can come with a lack of security, particularly regarding planning for retirement, because 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 having a more secure retirement, working with a financial advisor in Hollywood, FL to create your self-employed retirement plan can provide significant tax advantages that enable you to move your business forward.
Few Hollywood, FL wealth management and retirement planning firms are as attuned to the requirements of self-employed individuals as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (learn more about our story here), and we take pride in assisting business owners in their retirement planning needs. We know that your professional and personal aspirations go far beyond basic numbers, and we strive to offer customized solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Hollywood, FL, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a entrepreneurial financial advisor in Hollywood, FL today.
Why Hollywood, FL Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also provide immediate benefits today. From flexible contributions to substantial tax savings, partnering with a financial advisor in Hollywood, FL enables you to design your retirement plan to suit 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) gives you the option to adjust how much you save:
- Customizable Contributions: Save extra during profitable years and reduce savings when income is lower, so that your plan fits your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, 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 deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) lower your taxable income, allowing you to keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for extra deductions as a sole proprietor. These local incentives can make these plans even more beneficial.
- 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, 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: Distributing your investments across a mix of asset classes like stocks and bonds can help reduce risk while helping to grow your savings.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net helps you avoid tapping into your nest egg during tough times and facing tax penalties.
Plan for the Future of Your Hollywood, FL Business
Retirement planning can assist you plan ahead for what’s next with your Hollywood, FL business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and won’t be included in the sale. These accounts offer the steady income you’ll need during retirement. It’s important to note that while the sale of a business usually creates a capital gain, deposits into these plans are subject to yearly maximums (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, factoring in catch-up contributions, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you’ll owe when you transfer your business.
- Succession Planning: If you’re passing the business on, your retirement savings ensure the funds you need as you make this shift. You might want to seek advice from a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens during the sale.
With the proper savings strategy, you gain control over your financial future, lower your tax bill, and create a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Hollywood, FL Now?
Time remains one of the most valuable resources in retirement planning. Starting early not only helps you grow a more substantial retirement fund but also reduces the financial burden of saving aggressively in the future. Here’s why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement could lead to a major impact on the savings you’ll have when you retire. The primary reason is compound interest—the powerful process where your investments earn returns, and those returns, in turn, generate even more returns. The greater time span your money has to grow, the greater the effect of this growth.
Example: Two individuals, Alex and Taylor are both self-employed individuals. They each aim to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor waits until age 40 but puts away $7,500 annually to catch up.
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 often create 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 projected return of 7%, you’ll accumulate $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 difference of over $260,000, all because of a 10-year delay.
Saving early, the lower your annual savings needs each year to achieve your retirement goals.
*The figures provided in this example represent estimates generated with 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. This information is meant to provide general guidance and are not a promise of future results. Outcomes may change depending on factors such as market conditions, fees, and personal factors. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Hollywood, FL, it is often the case that you focus more on reinvesting in your business instead of saving for retirement. Even so, beginning a plan now gives you the chance to:
- Leverage tax-deferred growth or penalty-free withdrawals later on.
- Take advantage of contribution flexibility that align with your cash flow.
- Build a safety net that offers peace of mind, no matter how your business develops.
The sooner you start, the less you’ll be required to worry about playing catch-up later in life. Building your retirement savings today means gaining control over your financial future and allowing yourself the freedom to concentrate on your dreams—both for your golden years and your Hollywood, FL business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for entrepreneurs in Hollywood, FL, each providing its own pros and cons. A financial advisor will guide you to learn about the advantages and disadvantages of each option and identify the one most suitable for your unique situation. Typically, your self-employed retirement plan options in Hollywood, FL are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that offer distinct tax benefits. In a standard IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but retirement distributions are taxed as income. In contrast, with Roth IRAs, you contribute from post-tax earnings, but eligible distributions during retirement, including earnings, are tax-free. In both types of accounts, withdrawals don’t incur penalties provided you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are open to those with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA serves as a retirement savings option that enables entrepreneurs to set aside a portion of their self-employment income. Contributions are strictly employer contributions an employer, so, as a self-employed individual, you (the employee) would not be able to contribute beyond the 25% you (the employer) already contributed. If you have employees, you must contribute the same amount for them as you do for yourself. You have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA may be ideal for companies with cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs work like conventional IRAs, where the contributions are tax-deferred 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 capped at the lower of:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the amount eligible to be contributed 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 where the only employee is a spouse. Solo 401(k)s are similar to standard 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This provides more savings than SEPs or IRAs; however, the additional opportunities can be balanced by more limited investment options. Using a solo 401(k), you can make either traditional or Roth deferrals, which share 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: If you are self-employed with a solo 401(k) plan, you can make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employment income, 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 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your net self-employment income, which is your net profit minus half of your self-employment tax and the deferrals you made.
Total contributions are capped at $70,000, or $77,500 for those aged 50 and older (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that guarantees a fixed, predetermined benefit to entrepreneurs upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but lets individuals clearly understand exactly how much they'll receive in retirement. This plan is best suited for high-earning self-employed individuals who want to save a significant sum for retirement and are prepared to contribute sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income upon retirement.
Eligibility: Entrepreneurs managing a one-person company or with less than five employees may establish 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 include:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% with plans to contribute more
- Companies showing consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The maximum allowable contribution requires calculation from an actuary based on your income, age, and retirement goals. Limits on contributions change annually.
The Importance of a Financial Advisor in Hollywood, FL for Your Self-Employed Retirement Plan
Partnering with an advisor in Hollywood, FL experienced with retirement plans for the self-employed is an invaluable resource for self-employed individuals. They offer the knowledge to assist navigate the complexities of retirement planning and develop a personalized approach that aligns with your goals. An expert in your area will evaluate your financial situation, understand your risk tolerance, and guide you in selecting the best options about saving and investing for retirement. A key part of what we do for you involves:
- Assist in selecting a plan that aligns with your objectives and circumstances
- Tailor the plan to your needs even further
- Create a written plan that complies with IRS regulations
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Review and modify your plan as needed
- Offer continued financial education and guidance to help you navigate your retirement journey
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Hollywood, FL: Correct Capital's Process
Entrepreneurs in Hollywood, FL who don’t have the time or expertise to manage their retirement savings strategy on their own can become overwhelmed when faced with their choices. Through our team at Correct Capital, our Hollywood, FL financial advisors manage the bulk of your retirement planning for you, to help make meeting your financial objectives as easy 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 suited to your needs for you and your business. This short conversation allows us to learn about your needs with zero commitment or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll gather information, including your employee count, your present financial standing, and your long-term savings targets. This allows us to put together a personalized strategy designed just for you.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll meet with you and discuss your plan thoroughly 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 have regular meetings and monitor your plan to ensure it stays suited to your needs.
Our Hollywood, FL financial advisors and retirement plan consultants serve 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 Hollywood, FL include:
- Financial Planning for Business Owners
- Comprehensive Financial Planning
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
Call Correct Capital for Your Self-Employed Retirement Plan in Hollywood, FL
To you, your business is more than "just a business", and your Hollywood, FL financial advisors need to offer more than just good financial guidance. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to deliver customized self-employed retirement plans. All our clients in Hollywood, FL benefit from our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
