Self-employed retirement plans Irving, TX. The independence of being your own boss in Irving, TX is one of the greatest advantages of having a self-directed career. Even so, this freedom sometimes brings with potential drawbacks, notably when it comes to retirement savings, since you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from exploring their options. In addition to enjoying a more comfortable retirement, partnering with a financial advisor in Irving, TX to establish your self-employed retirement plan offers significant tax advantages that enable your business to grow and succeed.
Few Irving, TX wealth management and retirement planning firms understand the needs of small business owners quite like Correct Capital. Our founder's father was a small business owner himself (read more of our story here), and Correct Capital have a rich history of supporting entrepreneurs with their retirement planning needs. We recognize that your professional and personal aspirations extend well past simple financial figures, and we strive to provide personalized solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Irving, TX, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Irving, TX today.
Why Irving, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver real benefits today. With customizable contribution options to considerable tax savings, working with a financial advisor in Irving, TX allows you to design your retirement plan to suit your individual circumstances.
Flexibility That Fits Your Income
For those with fluctuating income from year to year, a plan like a SEP IRA or Solo 401(k) provides the freedom to adjust how much you save:
- Customizable Contributions: Set aside more during profitable years and reduce savings when revenues are down, so that your plan works with your cash flow.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw tax-free later—a smart decision if you expect your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, giving your money more time to grow.
- State-Specific Incentives: In some states, you might access additional deductions as a self-employed individual. These state-level incentives make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can take advantage of a credit of up to 50% of the first $2,000 put into 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: Spreading your investments across different asset classes like stocks and bonds is a smart way to minimize exposure to risk while still growing your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net ensures you don’t dipping into savings during tough times and facing tax penalties.
Plan for the Future of Your Irving, TX Business
Retirement planning can assist you prepare for what’s next with your Irving, TX business:
- Selling Your Business: When selling your business, accounts such as SEP IRAs or Solo 401(k)s remain yours and are not part of the sale. These plans ensure the financial stability you’ll need in the future. Remember that while selling a business often leads to a capital gain, retirement plan contributions are restricted by contribution 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, based on plan compensation).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you might face when you sell your business.
- Succession Planning: If you’re passing the business on, your nest egg provide the funds you need through the transition. You may also seek advice from a financial advisor experienced in both succession and retirement strategies to reduce taxes on the sale.
With the proper savings strategy, you manage your financial future, reduce your tax burden, and create a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Irving, TX Now?
There’s no denying that time is one of the most valuable factors for building your retirement fund. Getting a head start not only allows you to build a more substantial retirement fund but also minimizes the financial burden of playing catch-up as you get older. Here’s why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement may cause a major impact on the savings you’ll have when you reach retirement age. The main reason is compound interest—the concept where your investments generate earnings, and those returns, in turn, generate even more returns. The greater time span your money has to grow, the more significant the impact of this growth.
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 waits until age 40 but puts away $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex contributes $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time may result in substantial growth. Take a look at this scenario showing the impact of compounding:
- Starting at age 25: Putting aside $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: Saving the same $200 per month yields only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
The earlier you begin, the less effort required each year to reach your retirement goals.
*The figures provided in this example are estimates derived from NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. These examples are intended as illustrative examples and cannot predict actual future outcomes. Outcomes may change depending on factors such as market conditions, fees, and personal factors. 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 Irving, TX, it might seem easier to focus more on reinvesting in your business rather than saving for retirement. Even so, beginning a plan now enables you to:
- Leverage growth that is tax-deferred or penalty-free withdrawals down the road.
- Benefit from contribution flexibility that align with your income.
- Build a financial cushion that offers peace of mind, no matter how your business changes.
Starting early, the less you’ll need to worry about making up for lost time later in life. Taking steps toward your retirement goals today means managing your financial future and giving yourself the freedom to turn your attention to your dreams—both for your future retirement and your Irving, TX business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for entrepreneurs in Irving, TX, each providing its own advantages and considerations. A financial advisor can help you learn about the benefits and drawbacks of each choice and determine the one most suitable for your needs. Generally speaking, your self-employed retirement plan options in Irving, TX include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that provide specific tax advantages. In a traditional IRA, contributions are typically tax-deductible, and returns grow free of current taxes, but money taken out during retirement are subject to income tax. In contrast, Roth IRA contributions are made with after-tax income, but qualified withdrawals in retirement, including earnings, are not taxed. In both cases, withdrawals don’t incur penalties provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, IRAs, including traditional and Roth options are accessible for individuals with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $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 allows those who are self-employed to contribute a percentage of their net earnings. Contributions are strictly employer contributions an employer, so, as a independent business owner, you (the employee) cannot make additional contributions 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. A SEP IRA works well for businesses that experience cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs function like standard IRAs, where contributions are made with pre-tax money and withdrawals are taxed as income.
Eligibility: Both employers and self-employed individuals can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 25% of compensation, or
- $70,000 for 2025
For self-employed individuals, 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 intended for businesses without employees or when the sole employee is your spouse. These plans are similar to standard 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the increased savings potential can be balanced by more limited investment options. 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 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:
- Elective deferrals (as an employee) of up to 100% of your self-employed earnings, subject to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 for those aged 50 and above, or $34,750 for individuals aged 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your adjusted self-employment income, which is your 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 individuals aged 50+ (as of 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan is a retirement option that provides a fixed, predetermined benefit to self-employed individuals upon retirement. Unlike defined contribution plans mentioned above, this plan is not influenced by market performance, but enables participants to determine the precise amount they'll get in retirement. This strategy is best suited for higher-income self-employed individuals who are focused on saving a large amount for retirement and are willing to make sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income in retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees may establish an individual defined benefit plan, but it's typically advised for those over 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans include:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% and are willing to do more
- Organizations that have demonstrated consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution requires calculation from an actuary based on your income, age, and retirement goals. Allowable contributions are adjusted each year.
The Importance of a Financial Advisor in Irving, TX for Your Self-Employed Retirement Plan
Working with a financial advisor in Irving, TX focused on self-employed retirement strategies serves as an essential partner for self-employed individuals. They offer the knowledge to assist understand the intricacies of saving for retirement and craft a customized plan that reflects your aspirations. A financial advisor in Irving, TX will evaluate your financial situation, determine how much risk you’re comfortable with, and assist you in making informed decisions about saving and investing for retirement. Included in what we do for you involves:
- Help you choose a plan that best fits your needs and goals
- Customize the plan to your specific situation even further
- Adopt a written plan that complies with IRS regulations
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan as needed
- Provide ongoing education and advice to help you navigate your retirement journey
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Irving, TX: Correct Capital's Process
Entrepreneurs in Irving, TX who don’t have the time or expertise to manage their own retirement planning themselves often feel overwhelmed when faced with their options. With Correct Capital, our Irving, TX financial advisors manage the majority of your savings plan setup for you, and strive to ensure meeting your retirement goals as hassle-free 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 can help understand if we're suited to your needs for you and your business. This initial call allows us to get a sense of your goals with no pressure or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including how many employees you have (if any), your existing financial picture, and your long-term savings targets. This enables us to craft a tailored approach that aligns with your goals.
- Review Your Plan: After we put together a plan using the information you provide, we'll meet with you and go over your plan step by step to ensure you understand it and show how it aligns with your goals.
- Implementation and Monitoring: When we finalize on your plan, we'll put everything in place so you can begin contributing. Over the course of our partnership, we'll have regular meetings and track your progress to make sure it remains aligned with your goals.
Our Irving, TX financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Irving, TX 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 Irving, TX
Your business isn't "just a business" to you, and your Irving, TX financial advisors must deliver more than simply sound financial advice. With Correct Capital, we focus on building a relationship with our clients and their businesses to provide tailored self-employed retirement plans. All our clients in Irving, TX 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.
