Self-employed retirement plans Indianapolis, IN. The flexibility of running your own company in Indianapolis, IN offers many benefits of being self-employed. However, this freedom can come with certain challenges, especially in terms of planning for retirement, because you don't have access to a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off looking into other possibilities. In addition to having a financially stable retirement, partnering with a financial advisor in Indianapolis, IN to set up your self-employed retirement plan delivers significant tax advantages that help you to move your business forward.
Few Indianapolis, IN wealth management and retirement planning firms truly grasp the challenges faced by small business owners quite like Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and we are deeply experienced in helping businesses with their retirement planning needs. We know that your goals for your business and retirement aren’t limited to simple financial figures, and we strive to offer personalized solutions to meet your unique goals. Continue exploring to find out about your self-employed retirement plan options in Indianapolis, IN, or call Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Indianapolis, IN today.
Schedule a Meeting With an Advisor Today
Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
Schedule a 15-Minute Introductory Call
Why Indianapolis, IN Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also provide real benefits today. From flexible contributions to substantial tax savings, consulting a financial advisor in Indianapolis, IN helps you design your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
If your income changes annually, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to modify how much you save:
- Customizable Contributions: Save extra during high-income years and cut back when revenues are down, so your plan aligns with your cash flow.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw your savings tax-free down the road—a smart decision if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed deliver significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA shrink your tax liability, allowing you to keep more of your income.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, giving your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for extra credits as a business owner. These regional incentives help make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can apply for 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
Building a secure retirement goes beyond just how much you save—it’s also about how you invest:
- Diversified Portfolios: Distributing your investments across a mix of asset classes like stocks and bonds is a smart way to reduce risk while helping to grow your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund prevents you from tapping into your nest egg during challenging periods and incurring penalties.
Plan for the Future of Your Indianapolis, IN Business
Retirement planning can assist you prepare for what’s next with your Indianapolis, IN business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain your personal assets and don’t transfer with the business. These accounts can provide the financial stability you’ll need later on. Keep in mind that while selling a business often leads to a capital gain, deposits into these plans are capped at annual limits (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Strategically planning your contributions helps lower the taxes you might face when you sell your business.
- Succession Planning: If you’re passing the business on, your nest egg ensure the funds you need through the transition. You might want to seek advice from a financial advisor experienced in both succession and retirement strategies to help with taxes associated with the transaction.
With the right retirement plan, you manage your financial future, reduce your tax burden, and build a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Indianapolis, IN Now?
Time is one of the most crucial resources for building your retirement fund. Getting a head start not only allows you to build a larger nest egg but also minimizes the stress of playing catch-up as you get older. This is why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement can have a substantial impact on the amount you’ll have when you reach retirement age. The main reason is compound interest—the concept where your investments generate earnings, and those returns, then, generate even more returns. The more time your money has to grow, the greater the benefit of compounding.
Example: Alex and Taylor are both entrepreneurs. Their shared goal is to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor delays savings until age 40 but puts away $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions invested steadily can lead to substantial 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 grow to approximately $497,303.29* by age 65.
- Starting at age 35: Saving 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 you need to save each year to meet your retirement goals.
*The numbers shown in this scenario are estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. This information is intended as illustrative examples and do not guarantee future performance. Your individual results may differ due to elements like market conditions, fees, and individual circumstances. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
For self-employed individuals in Indianapolis, IN, it can be tempting to put more emphasis on reinvesting in your business over saving for retirement. However, initiating a plan now enables you to:
- Benefit from growth that is tax-deferred or withdrawals without taxes down the road.
- Enjoy flexible contributions that change with your income.
- Build a safety net that offers peace of mind, no matter how your business evolves.
Getting started now, the less you’ll be required 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 opportunity to turn your attention to your goals—both for your retirement years and your Indianapolis, IN business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for entrepreneurs in Indianapolis, IN, each with its own benefits and trade-offs. A financial advisor can help you understand the pros and cons of each plan and identify the one best suited for your unique situation. In most cases, your self-employed retirement plan options in Indianapolis, IN include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include specific tax advantages. In a standard IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but money taken out during retirement are subject to income tax. In contrast, Roth IRAs require contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both cases, withdrawals come without penalties if you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are open to those 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: A Simplified Employee Pension (SEP) IRA serves as a retirement savings option that enables self-employed individuals to save a percentage of their net business profits. Contributions must come from an employer, so, as a self-employed individual, you (the employee) cannot make additional contributions above 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 fixed dollar figure or a percentage of wages to employee accounts. This type of plan works well for entrepreneurs facing cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs don’t have costly startup or administrative fees.
SEPs operate like standard IRAs, where contributions are made with pre-tax money 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
As a self-employed person, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan designed for businesses with no employees or if the only employee is your spouse. Solo 401(k)s are similar to standard 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This offers more savings versus 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: This plan is exclusively for business owners and their spouses may establish 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, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your adjusted self-employment income, which is calculated as net profits less half of your self-employment tax and the deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 for individuals aged 50+ (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that guarantees a set amount to business owners upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine what they'll get in retirement. This plan is best suited for higher-income self-employed individuals who aim to accumulate a significant sum for retirement and are prepared to contribute larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxed as income during retirement.
Eligibility: Entrepreneurs running an owner-only business or with a small staff of under five can open an individual defined benefit plan, but it's generally recommended for those over 50 who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans tend to be:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% but are open to increasing contributions
- Businesses with proven consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The contribution limit is calculated by an actuary using your income, age, and retirement goals. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Indianapolis, IN for Your Self-Employed Retirement Plan
Working with a financial advisor in Indianapolis, IN specialized in self-employed retirement plans can be an invaluable resource for entrepreneurs. They bring the skills needed to guide you through the challenges of retirement planning and develop a personalized approach that aligns with your goals. An expert in your area will review your finances, identify your risk preferences, and help you in making informed decisions about saving and investing for retirement. Part of what we do for you includes:
- Assist in selecting a plan that best fits your needs and goals
- Tailor the plan to your specific situation even further
- Adopt a written plan in accordance with IRS guidelines
- Set up an asset trust plan
- Ensure you comprehend 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
- Boost your retirement earnings by making the most of your social security
Self-Employed Retirement Plans in Indianapolis, IN: Correct Capital's Process
Self-employed individuals in Indianapolis, IN who don’t have the time or expertise to manage their retirement savings strategy themselves can become overwhelmed as they look at their available plans. With Correct Capital, our Indianapolis, IN financial advisors manage the bulk of your retirement strategy for you, and strive to ensure meeting your financial objectives as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in just four 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 brief introduction lets us learn about your needs with no pressure or extensive time commitment on your part.
- Gather Information: If we both decide to move forward, we'll request information, including how many employees you have (if any), your current financial situation, and your future objectives. This helps us create a personalized strategy suited specifically for your needs.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll meet with you and discuss your plan thoroughly to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can begin contributing. As time goes on, we'll have regular meetings and review your strategy to keep it tailored to your evolving circumstances.
Our Indianapolis, IN financial advisors and retirement plan consultants act as fiduciary advisors, which means they are committed by law and ethics to act in your best interest.
Other financial advisory services we offer in Indianapolis, IN 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 Indianapolis, IN
You don't see your business as "just a business", and your Indianapolis, IN financial advisors should provide more than just good financial guidance. At Correct Capital, we focus on building a relationship with our clients and their businesses to provide customized self-employed retirement plans. To every client in Indianapolis, IN, we provide 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, call Correct Capital today at 877-930-401k or contact us online.
