Self-employed retirement plans Huntington Beach, CA. The flexibility of running your own company in Huntington Beach, CA offers many benefits of having a self-directed career. That said, this independence often comes with potential drawbacks, particularly when it comes to planning for retirement, because you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off understanding their retirement options. In addition to having a financially stable retirement, partnering with a financial advisor in Huntington Beach, CA to create your self-employed retirement plan offers significant tax advantages that allow you to move your business forward.
Few Huntington Beach, CA investment consulting and retirement planning firms truly grasp the challenges faced by small business owners better than Correct Capital. The father of our founder was a small business owner himself (check out our story here), and our firm have a rich history of assisting business owners in their retirement planning needs. We know that your professional and personal aspirations go far beyond simple financial figures, and we are dedicated to offer tailored solutions that reflect your objectives. Keep reading to learn more about your self-employed retirement plan options in Huntington Beach, CA, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a small business financial advisor in Huntington Beach, CA today.
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Why Huntington Beach, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver real benefits today. From flexible contributions to considerable tax savings, working with a financial advisor in Huntington Beach, CA helps you create your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) provides the flexibility to tailor how much you save:
- Customizable Contributions: Set aside more during high-income years and cut back when revenues are down, ensuring your plan works with your cash flow.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw tax-free later—a smart decision if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, allowing you to keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to compound.
- State-Specific Incentives: Depending on where you live, you might access extra credits as a business owner. These local incentives help make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants 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
Building a secure retirement goes beyond just how much you save—it’s also about how you invest:
- Diversified Portfolios: Distributing your investments across varied asset classes like stocks and bonds can help minimize exposure to risk while continuing to build your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net prevents you from using your retirement funds during challenging periods and incurring penalties.
Plan for the Future of Your Huntington Beach, CA Business
Retirement planning enables you to think through what’s next with your Huntington Beach, CA business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and won’t be included in the sale. These plans can provide the steady income you’ll need later on. 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., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, including catch-up contributions, based on plan compensation).
- Minimizing Taxes: Strategically planning your contributions helps lower the taxes you are required to pay when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg ensure the funds you need during the change. You may also seek advice from a financial advisor experienced in both succession and retirement strategies to minimize tax burdens associated with the transaction.
With the proper savings strategy, you gain control over your financial future, cut down your tax obligations, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Huntington Beach, CA Now?
Time is one of the most crucial factors when it comes to saving for retirement. Getting a head start not only lets you accumulate a bigger financial cushion but also lowers the pressure of saving aggressively in the future. Here’s why it makes sense to begin today:
The Cost of Waiting
Waiting to start your retirement fund can have a major impact on the savings you’ll have when you reach retirement age. The biggest reason is compound interest—the financial principle where your investments generate earnings, and those returns, then, accumulate even more returns. The greater time span your money has to grow, the larger the impact of compounding.
Example: Taylor and Alex are both entrepreneurs. They each aim 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 puts in $180,000 and accumulates $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time often create significant growth. Here’s a simple scenario showing the impact of consistent growth:
- Starting at age 25: By investing $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month would result in only $235,412.97* by age 65—a shortfall of over $260,000, just from a 10-year delay.
The earlier you begin, the less effort required each year to meet your retirement goals.
*The numbers shown in this scenario are based on estimates generated with NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. This information is meant to provide general guidance and do not guarantee future performance. Actual results may vary due to factors such as market conditions, fees, and your unique situation. 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 Huntington Beach, CA, it might seem easier to prioritize reinvesting in your business rather than saving for retirement. That said, beginning a plan now enables you to:
- Benefit from tax-deferred growth or penalty-free withdrawals down the road.
- Enjoy adjustable savings that align with your earnings.
- Create a financial cushion that ensures stability, no matter how your business develops.
Starting early, the less you’ll need to worry about playing catch-up later in life. Saving for retirement now means gaining control over your financial future and allowing yourself the freedom to turn your attention to your dreams—both for your future retirement and your Huntington Beach, CA business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for those working for themselves in Huntington Beach, CA, each with its own advantages and considerations. A financial advisor is available to help you understand the pros and cons of each option and identify the one most suitable for your unique situation. Generally speaking, your self-employed retirement plan options in Huntington Beach, CA consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that provide specific tax advantages. In a traditional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but money taken out during retirement are taxable. In contrast, Roth IRAs require contributions using income already taxed, but qualified withdrawals in retirement, including earnings, are not taxed. In both 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 accessible for individuals with a source of 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 offers a way to save for retirement that enables entrepreneurs to contribute a percentage of their net earnings. Contributions can only be made by 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 have the flexibility to contribute a fixed dollar figure or a percentage of wages to employee accounts. SEP IRAs is a good option for businesses that experience fluctuating revenue streams. Compared to other retirement options, SEP IRAs are free of expensive setup or ongoing fees.
SEPs function like traditional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Employers of any type, including self-employed individuals can set up 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: Solo 401(k)s, also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan designed for companies that have no employees or where the only employee is a spouse. Solo 401(k)s function similarly to standard 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This offers more savings versus SEPs or IRAs; however, the increased savings potential may be offset by more restricted investment choices. 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: 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 are allowed to make two types of contributions:
- Employee contributions of up to 100% of your self-employment income, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 for those who turn 60-63 in 2025.
- Employer profit-sharing contributions (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 elective deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 if you're over age 50 (as of 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that guarantees a set amount to entrepreneurs upon retirement. In contrast to the plans discussed earlier, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine exactly how much they'll receive in retirement. This strategy is recommended for wealthier self-employed individuals who want to save a substantial amount for retirement and can commit to making substantial contributions. Contributions offer tax-deferred growth, and withdrawals incur taxes as income upon retirement.
Eligibility: Self-employed professionals managing a one-person company or employing fewer than five people may establish an individual defined benefit plan, but it's typically recommended for people above age 50 who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans tend to be:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% with plans to contribute more
- Businesses with proven consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The cap on contributions is calculated by an actuary determined by your earnings, age, and retirement objectives. Allowable contributions change annually.
The Importance of a Financial Advisor in Huntington Beach, CA for Your Self-Employed Retirement Plan
Working with a financial advisor in Huntington Beach, CA specialized in self-employed retirement plans serves as an important asset for self-employed individuals. They offer the knowledge to assist understand the intricacies of saving for retirement and craft a tailored strategy that reflects your aspirations. An expert in your area will assess where you stand financially, determine how much risk you’re comfortable with, and assist you in selecting the best options about saving and investing for retirement. Part of what we do for you includes:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Customize 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
- Track and fine-tune your plan when necessary
- Offer continued financial education and guidance to help you navigate your retirement journey
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Huntington Beach, CA: Correct Capital's Process
Self-employed individuals in Huntington Beach, CA who don’t have the time or expertise to manage their self-employed retirement plan themselves often feel overwhelmed when faced with their options. Through our team at Correct Capital, our Huntington Beach, CA financial advisors manage the lion's share of your retirement planning for you, to help make meeting your financial objectives as straightforward as possible for you. We are here to assist you in setting up your self-employed retirement plan in a quick, four-step process:
- 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 short conversation helps us understand what you're looking for with no pressure or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including your employee count, your current financial situation, and your long-term savings targets. This allows us to put together a custom plan designed just for you.
- Review Your Plan: After we put together a plan using the information you provide, we'll schedule a meeting and review your plan thoroughly to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll put everything in place so you can start saving. Throughout our relationship, we'll check in and monitor your plan to keep it tailored to your evolving circumstances.
Our Huntington Beach, CA 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 Huntington Beach, CA 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 Huntington Beach, CA
To you, your business is more than "just a business", and your Huntington Beach, CA financial advisors must deliver more than just good financial guidance. With Correct Capital, we focus on building a relationship with our clients and their businesses to deliver customized self-employed retirement plans. We offer all our Huntington Beach, CA clients our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To begin on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
