Self-employed retirement plans Hollywood, FL. The freedom of running your own company in Hollywood, FL is one of the best aspects of having a self-directed career. However, this independence can come with a lack of security, especially regarding building your retirement fund, because 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 would be better off exploring their options. In addition to enjoying a financially stable retirement, seeking advice from a financial advisor in Hollywood, FL to establish your self-employed retirement plan can provide significant tax advantages that enable both you and your business to thrive.
Few Hollywood, FL wealth management and retirement planning firms understand the needs of self-employed individuals quite like Correct Capital. Our founder's father was a small business owner himself (read more of our story here), and our firm take pride in helping businesses with their retirement planning needs. We understand that your goals for your business and retirement aren’t limited to just monetary concerns, and we strive to provide customized solutions aligned with your vision. Keep reading to learn more about your self-employed retirement plan options in Hollywood, FL, or call Correct Capital at 877-930-401k or contact us online to consult with 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 deliver immediate benefits today. From flexible contributions to considerable tax savings, consulting a financial advisor in Hollywood, FL helps you design your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
If your income changes 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 high-income years and cut back when revenues are down, so that your plan aligns with your cash flow.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw tax-free later—an advantageous choice if you believe your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, helping you keep more of your income.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to grow.
- State-Specific Incentives: Depending on where you live, you could qualify for extra deductions as a self-employed individual. These local incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax 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 isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Allocating your investments across different stocks, bonds, and alternatives can help minimize exposure to risk while continuing to build your savings.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business helps you avoid using your retirement funds during tough times and risking extra costs.
Plan for the Future of Your Hollywood, FL Business
Retirement planning also helps you think through 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 savings offer the financial stability you’ll need in the future. It’s important to note that while selling a business often leads to a capital gain, retirement plan contributions are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Using retirement contributions wisely can reduce the taxes you’ll owe when you transfer your business.
- Succession Planning: If you’re passing the business on, your nest egg offer the funds you need during the change. You might want to seek advice from a financial advisor experienced in both succession and retirement strategies to minimize tax burdens associated with the transaction.
With the right retirement plan, you gain control over your financial future, cut down your tax obligations, 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 is one of the most crucial resources in retirement planning. Getting a head start not only allows you to build a bigger financial cushion but also reduces the stress of saving aggressively in the future. Here’s why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund can have a significant impact on the amount you’ll have when you reach retirement age. The main reason is compound interest—the powerful process where your investments earn returns, and those returns, then, earn even more returns. The longer your money has to grow, the larger the effect of this growth.
Example: Taylor and Alex are both entrepreneurs. They each aim to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but contributes $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and ends up with $691,184.39*.
- Taylor contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently can lead to significant growth. Take a look at this scenario showing the impact of compound interest:
- Starting at age 25: By investing $200 per month in a retirement plan with an projected return of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month would result in only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
Starting sooner, the less you need to save each year to meet your retirement goals.
*These calculations represent estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. The scenarios provided are intended as illustrative examples and do not guarantee future performance. Outcomes may change due to variables including market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Hollywood, FL, it is often the case that you prioritize reinvesting in your business rather than saving for retirement. However, initiating a plan now gives you the chance to:
- Take advantage of tax-deferred growth or withdrawals without taxes in the future.
- Enjoy adjustable savings that change with your income.
- Build a safety net that ensures stability, no matter how your business evolves.
The sooner you start, the less you’ll need to worry about playing catch-up later in life. Taking steps toward your retirement goals today means managing your financial future and creating for yourself the freedom to focus on your dreams—both for your golden years and your Hollywood, FL business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for those working for themselves in Hollywood, FL, each with its own pros and cons. A financial advisor can help you learn about the advantages and disadvantages of each option and identify the one ideal for your unique situation. In most cases, 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 offer distinct tax benefits. In a conventional IRA, contributions are typically tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are subject to income tax. In contrast, Roth IRAs require 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 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 taxable earnings.
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: A Simplified Employee Pension (SEP) IRA serves as a retirement savings option that allows self-employed individuals to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) allocate. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. You have the flexibility to contribute a fixed dollar figure or a percentage of wages to employee accounts. This type of plan may be ideal for businesses that experience cycles of high revenue and low revenue. Unlike other plans, SEP IRAs are free of expensive setup or ongoing fees.
SEPs function like standard IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed can establish 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 amount eligible to be contributed 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 without employees or where the only employee is a spouse. These plans 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 allows for more savings than SEPs or IRAs; however, the additional opportunities may be offset by more constrained investment avenues. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which offer 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 can make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, 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) are limited to 25% of your net self-employment income, which is defined as 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 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that delivers a fixed, predetermined benefit to business owners upon retirement. Unlike defined contribution plans mentioned above, this plan is not influenced by market performance, but lets individuals clearly understand what they'll have in retirement. This option is ideal for wealthier entrepreneurs who aim to accumulate a large amount for retirement and can commit to making sizeable contributions. Contributions are tax deferred, and withdrawals are taxed as income during retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees are eligible to open an individual defined benefit plan, but it's typically recommended for individuals aged 50+ who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans tend to be:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Businesses currently investing 3-4% with plans to contribute more
- Organizations showing consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The cap on contributions is calculated by an actuary determined by your income, age, and retirement goals. Allowable contributions change annually.
The Importance of a Financial Advisor in Hollywood, FL for Your Self-Employed Retirement Plan
Working with 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. An expert in your area will assess where you stand financially, determine how much risk you’re comfortable with, and guide you in making informed decisions about saving and investing for retirement. A key part of what we do for you features:
- Help you choose a plan that best fits your needs and goals
- Customize the plan to your specific situation even further
- Create a written plan as required by IRS rules
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Track and fine-tune your plan when necessary
- Deliver continuous support and financial insights throughout your retirement planning process
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Hollywood, FL: Correct Capital's Process
Hollywood, FL business owners who lack the time, interest, or knowledge to manage their own retirement planning themselves may end up overwhelmed as they look at their choices. Through our team at Correct Capital, our Hollywood, FL financial advisors handle the bulk of your savings plan setup for you, working to make meeting your financial objectives as easy as possible for you. We can help you get set up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can determine if we're a good fit for you and your business. This short conversation helps us understand what you're looking for with no obligation or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including how many employees you have (if any), your current financial situation, and your retirement goals. This allows us to put together a tailored approach designed just for you.
- Review Your Plan: After we put together a plan based on the information you provide, we'll meet with you and discuss your plan in detail to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can initiate your savings journey. Throughout our relationship, we'll meet with you and review your strategy to ensure it stays suited to your needs.
Our Hollywood, FL financial advisors and retirement plan consultants are 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 Hollywood, 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 Hollywood, FL
Your business isn't "just a business" to you, and your Hollywood, FL 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 create 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 take the first step on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
