Self-employed retirement plans Irving, TX. The independence of being your own boss in Irving, TX offers many benefits of having a self-directed career. Even so, this flexibility sometimes brings with certain challenges, particularly when it comes to retirement savings, because you don't have access to a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider looking into other possibilities. In addition to achieving a more comfortable retirement, partnering with a financial advisor in Irving, TX to establish your self-employed retirement plan delivers significant tax advantages that enable your business to grow and succeed.
Few Irving, TX financial advisory and retirement planning firms truly grasp the challenges faced by entrepreneurs quite like Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and we 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 work tirelessly to create customized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Irving, TX, or call Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Irving, TX today.
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Why Irving, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also offer real benefits today. Offering flexibility in contributions to significant tax savings, working with a financial advisor in Irving, TX helps you design your retirement plan to align with your individual circumstances.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) provides the option to adjust how much you save:
- Customizable Contributions: Save extra during profitable years and cut back when your earnings dip, so that your plan works with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw tax-free later—an advantageous choice if you believe your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, helping you keep more of your income.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, which gives your money more time to compound.
- State-Specific Incentives: In some states, you may be eligible for state-specific tax breaks as a sole proprietor. These state-level incentives make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax credit of up to 50% of the first $2,000 put into a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure retirement requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Distributing your investments across a mix of stocks, bonds, and alternatives can help reduce risk while still growing your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business prevents you from dipping into savings during financial hardships and facing tax penalties.
Plan for the Future of Your Irving, TX Business
Preparing for retirement enables you to plan ahead for what’s next with your Irving, TX business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain your personal assets and are not part of the sale. These savings can provide the financial stability you’ll need later on. 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 up to $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you’ll owe when you transfer your business.
- Succession Planning: If you’re passing the business on, your nest egg provide financial security as you make this shift. You may also work with a financial advisor with expertise in succession and retirement planning to reduce taxes during the sale.
With the proper savings strategy, you can take control of your financial future, reduce your tax burden, and establish a solid base 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 important assets when it comes to saving for retirement. Starting early not only helps you grow a more substantial retirement fund but also reduces 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 substantial impact on the total you’ll have when you reach retirement age. The primary reason is compound interest—the powerful process where your investments earn returns, and those returns, in turn, accumulate even more returns. The longer your money has to grow, the greater the benefit of this compounding process.
Example: Taylor and Alex are both self-employed professionals. They each aim to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor waits until age 40 but contributes $7,500 annually to make up for lost time.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently can lead to substantial growth. Consider this example showing the impact of compounding:
- Starting at age 25: By investing $200 per month in a retirement plan with an expected yearly growth rate 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, all because of a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to achieve your retirement goals.
*These calculations are based on estimates calculated using NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is intended as illustrative examples and do not guarantee future performance. Outcomes may change depending on factors such as market conditions, fees, and your unique situation. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Irving, TX, it is often the case that you prioritize reinvesting in your business over saving for retirement. Even so, starting a plan now allows you to:
- Take advantage of tax-free future growth or withdrawals without taxes down the road.
- Enjoy adjustable savings that adapt to your earnings.
- Establish a financial cushion that ensures stability, no matter how your business changes.
Starting early, the less you’ll have to worry about catching up later in life. Building your retirement savings today means managing your financial future and creating for yourself the opportunity to concentrate on your dreams—both for your golden years and your Irving, TX business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for self-employed individuals in Irving, TX, each providing its own advantages and considerations. A financial advisor is available to help you understand the pros and cons of each choice and identify the one best suited for your needs. Generally speaking, your self-employed retirement plan options in Irving, TX consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are 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 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 tax-free. In both cases, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, traditional and Roth IRAs are open to those with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that allows those who are self-employed 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 more than the 25% you (the employer) have designated. If you have employees, you must contribute the same amount for them as you do for yourself. You have the flexibility to contribute a set monetary value 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 costly startup or administrative fees.
SEPs operate like standard IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
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 allowable contribution 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 intended for businesses without employees or where the only employee is a spouse. This type of plan operate much like employer-sponsored 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the increased savings potential may be offset by more restricted investment choices. 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 may establish 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:
- Employee contributions of up to 100% of your self-employed earnings, capped at the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you're over 50, 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 your 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 (in 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans represents a type of retirement plan that delivers 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 allows self-employed individuals to know exactly how much they'll have in retirement. This option is recommended for high-earning 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 incur taxes as income upon retirement.
Eligibility: Entrepreneurs operating a solo business or with a small staff of under five can open an individual defined benefit plan, but it's typically advised for individuals aged 50+ who make $250,000 or more annually. In most cases, good candidates for defined benefit plans include:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% and are willing to do more
- Companies with proven consistent profit patterns
- Entrepreneurs over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The contribution limit must be determined by an actuary using your earnings, age, and retirement objectives. Contribution limits change annually.
The Importance of a Financial Advisor in Irving, TX for Your Self-Employed Retirement Plan
Partnering with an advisor in Irving, TX experienced with retirement plans for the self-employed is an important asset for self-employed individuals. They have the expertise to help understand the intricacies of saving for retirement and develop a customized plan that matches your objectives. A financial advisor in Irving, TX will review your finances, determine how much risk you’re comfortable with, and guide 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 aligns with your objectives and circumstances
- Customize the plan to your specific situation even further
- Create a written plan that complies with IRS regulations
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Review and modify your plan to keep it aligned with your goals
- Deliver continuous support and financial insights throughout your retirement planning process
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Irving, TX: Correct Capital's Process
Entrepreneurs in Irving, TX who aren’t equipped with the time or understanding to handle their self-employed retirement plan themselves may end up overwhelmed by their available plans. At Correct Capital, our Irving, TX financial advisors handle the bulk 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 our services align for you and your business. This short conversation allows us to learn about your needs 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 present financial standing, and your retirement goals. This helps us create a tailored approach suited specifically for your needs.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll sit down with you and discuss your plan step by step to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll put everything in place so you can begin contributing. Throughout our relationship, we'll have regular meetings and review your strategy to ensure it stays suited to your needs.
Our Irving, TX financial advisors and retirement plan consultants serve 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 Irving, TX 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 Irving, TX
Your business isn't "just a business" to you, and your Irving, TX financial advisors need to offer more than basic financial recommendations. At Correct Capital, we make it a priority to understand our clients and their businesses to deliver customized 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, reach out to Correct Capital at 877-930-401k or contact us online.
