Self-employed retirement plans Hollywood, FL. The flexibility of running your own company in Hollywood, FL is one of the greatest advantages of being self-employed. However, this flexibility often comes with certain challenges, particularly regarding planning for retirement, because you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from exploring their options. In addition to enjoying a financially stable retirement, working with a financial advisor in Hollywood, FL to set up your self-employed retirement plan can provide significant tax advantages that allow your business to grow and succeed.
Few Hollywood, FL investment consulting and retirement planning firms understand the needs of self-employed individuals quite like 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 our firm have a rich history of assisting business owners in their retirement planning needs. We recognize that your professional and personal aspirations go far beyond just monetary concerns, and we work tirelessly to offer customized solutions to meet your unique goals. Read on to discover about your self-employed retirement plan options in Hollywood, FL, or reach out to Correct Capital at 877-930-401k or contact us online to talk to a entrepreneurial financial advisor in Hollywood, FL today.
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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 offer tangible benefits today. From flexible contributions to substantial tax savings, working with a financial advisor in Hollywood, FL enables you to design your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to modify how much you save:
- Customizable Contributions: Contribute more during profitable years and reduce savings when revenues are down, ensuring your plan works with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw tax-free later—a wise move if you expect your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, allowing you to keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you might access additional tax breaks as a self-employed individual. These state-level incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can take advantage of a credit of up to 50% of the first $2,000 put into a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement isn’t only about how much you save—it’s also about how you invest:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and alternatives is a smart way to reduce risk while continuing to build your nest egg.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net helps you avoid dipping into savings during financial hardships and facing tax penalties.
Plan for the Future of Your Hollywood, FL Business
A thoughtful retirement strategy enables you to plan ahead for what’s next with your Hollywood, FL 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 won’t be included in the sale. These plans offer the reliable income you’ll need later on. Keep in mind that while selling a business often leads to a capital gain, deposits into these plans are subject to yearly maximums (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you’ll owe when you sell your business.
- Succession Planning: If you’re passing the business on, your retirement savings offer the funds you need as you make this shift. You might want to work with a financial advisor with expertise in succession and retirement planning to minimize tax burdens during the sale.
With the right retirement plan, you gain control over your financial future, reduce your tax burden, and create a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Hollywood, FL Now?
There’s no denying that time is one of the most valuable factors in retirement planning. Starting early not only helps you grow a bigger financial cushion but also reduces the stress of catching up later in life. The following are reasons why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings could lead to a substantial impact on the savings you’ll have when you retire. The biggest reason is compound interest—the concept where your investments generate earnings, and those returns, then, earn even more returns. The greater time span your money has to grow, the greater the effect of compounding.
Example: Taylor and Alex are both self-employed individuals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor delays savings until age 40 but puts away $7,500 annually to catch up.
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
Regular, modest investments contributed over time can lead to substantial growth. Consider this example showing the impact 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 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 difference 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 represent estimates derived from NerdWallet’s Compound Interest Calculator, with the assumption of 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. Your individual results may differ due to factors such as market conditions, fees, and your unique situation. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in Hollywood, FL, it might seem easier to put more emphasis on reinvesting in your business rather than saving for retirement. However, beginning a plan now gives you the chance to:
- Benefit from tax-deferred growth or tax-free withdrawals down the road.
- Take advantage of contribution flexibility that align with your earnings.
- Create a financial cushion 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 gaining control over your financial future and giving yourself the opportunity to focus on your goals—both for your future retirement and your Hollywood, FL business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for those working for themselves in Hollywood, FL, each with its own advantages and considerations. A financial advisor is available to help you understand the advantages and disadvantages of each option and identify the one best suited for your circumstances. Typically, your self-employed retirement plan options in Hollywood, FL include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that provide distinct tax benefits. In a conventional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but retirement distributions are taxed as income. In contrast, with Roth IRAs, you contribute are made with after-tax income, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are accessible for individuals with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA is a retirement plan that enables entrepreneurs to save a percentage of their net business profits. Contributions must come from an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role above the 25% you (the employer) have designated. If you have employees, it's required to 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 entrepreneurs facing periods of inconsistent earnings. Compared to other retirement options, SEP IRAs lack expensive setup or ongoing fees.
SEPs work like conventional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Both employers and 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
As a self-employed person, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan meant for businesses without employees or if the only employee is your spouse. These plans are similar to traditional employer-managed 401(k) plans, and allow you to contribute as both an employer and an employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the additional opportunities may be offset by more restricted investment choices. 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: Solo 401(k)s are available solely to 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 can make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your self-employment income, up to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (as of 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 delivers a set amount to business owners upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but allows self-employed individuals to know the precise amount they'll get in retirement. This option is best suited for high-earning self-employed individuals who are focused on saving a substantial amount for retirement and can commit to making substantial contributions. Contributions offer tax-deferred growth, and withdrawals are taxed as income during retirement.
Eligibility: Self-employed professionals operating a solo business or with a small staff of under five can open an individual defined benefit plan, but it's most commonly advised for people above age 50 who earn at least $250,000 a year. Generally, good candidates for defined benefit plans are:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% with plans to contribute more
- Businesses with proven consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The contribution limit is calculated by an actuary determined by your income, age, and retirement goals. Contribution limits change annually.
The Importance of a Financial Advisor in Hollywood, FL for Your Self-Employed Retirement Plan
A financial advisor in Hollywood, FL focused on self-employed retirement strategies is an important asset for entrepreneurs. They have the expertise to help guide you through the challenges of retirement planning and design a personalized approach that matches your objectives. Your advisor in Hollywood, FL will evaluate your financial situation, identify your risk preferences, and help you in selecting the best options about saving and investing for retirement. Part of what we do for you involves:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Tailor the plan to your needs even further
- Formalize a plan in writing as required by IRS rules
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Review and modify your plan when necessary
- Provide ongoing education and advice throughout your retirement planning process
- Maximize what you receive in retirement by maximizing your social security benefits
Self-Employed Retirement Plans in Hollywood, FL: Correct Capital's Process
Self-employed individuals in Hollywood, FL who aren’t equipped with the time or understanding to manage their self-employed retirement plan independently can become overwhelmed as they look at their options. Through our team at Correct Capital, our Hollywood, FL financial advisors handle the lion's share of your retirement strategy for you, to help make meeting your future savings targets as hassle-free 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 will assess if we're a good fit for you and your business. This short conversation allows us to get a sense of your goals with zero commitment or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including your employee count, your current financial situation, and your future objectives. This allows us to put together a personalized strategy that aligns with your goals.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll sit down with you and go over your plan in detail to ensure you understand it and understand how it best correlates to your needs.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can initiate your savings journey. Throughout our relationship, we'll meet with you and track your progress to keep it tailored to your evolving circumstances.
Our Hollywood, FL financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Hollywood, 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 Hollywood, FL
Your business isn't "just a business" to you, and your Hollywood, FL financial advisors must deliver more than basic financial recommendations. Correct Capital takes pride in, we take the time to get to know 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: everything we recommend will be independent, objective, and unbiased. To begin on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
