Self-employed retirement plans Irving, TX. The independence of owning your own business in Irving, TX is one of the best aspects of working for yourself. That said, this flexibility can come with potential drawbacks, especially in terms of planning for retirement, as you don't have access to a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off exploring their options. In addition to achieving a more secure retirement, seeking advice from a financial advisor in Irving, TX to set up your self-employed retirement plan delivers significant tax advantages that allow you to move your business forward.
Few Irving, TX investment consulting and retirement planning firms are as attuned to the requirements of entrepreneurs quite like Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (check out our story here), and our firm are deeply experienced in assisting business owners in their retirement planning needs. We understand that your professional and personal aspirations extend well past basic numbers, and we work tirelessly to offer tailored solutions aligned with your vision. Keep reading to learn more 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 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 help prepare you for the future, they also provide tangible benefits today. With customizable contribution options to substantial tax savings, working with a financial advisor in Irving, TX allows you to create your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
When your earnings vary 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: Contribute more during high-income years and reduce savings when income is lower, ensuring your plan works with your cash flow.
- Roth Options: Opting for a Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw without tax penalties in the future—a wise move if you believe your tax rate will increase in the future.
Save Money on Taxes
Retirement plans for self-employed individuals deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) lower your taxable income, helping you keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, providing your money more time to grow.
- State-Specific Incentives: In some states, you might access extra deductions as a business owner. These state-level incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can take advantage of a credit of up to 50% of the first $2,000 they contribute a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Spreading your investments across a mix of asset classes like stocks and bonds is a smart way to minimize exposure to risk while continuing to build your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund prevents you from tapping into your nest egg during financial hardships and incurring penalties.
Plan for the Future of Your Irving, TX Business
Preparing for retirement can assist you plan ahead for what’s next with your Irving, TX business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and are not part of the sale. These accounts can provide the financial stability you’ll need later on. It’s important to note 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 up to $70,000 for Solo 401(k)s, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you are required to pay when you pass on your business.
- Succession Planning: For those winding down or handing over their business, your retirement savings ensure financial security as you make this shift. You can also seek advice from a financial advisor experienced in both succession and retirement strategies to reduce taxes during the sale.
With the right retirement plan, you gain control over your financial future, lower your tax bill, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Irving, TX Now?
Time remains one of the most important assets for building your retirement fund. Getting a head start not only allows you to build a more substantial retirement fund but also lowers the pressure of playing catch-up as you get older. This is why it is beneficial to start now:
The Cost of Waiting
Delaying your retirement savings could lead to a substantial 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, earn even more returns. The greater time span your money has to grow, the more significant the benefit of this growth.
Example: Taylor and Alex are both self-employed professionals. Both of them want to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but puts away $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings invested steadily often create significant growth. Here’s a simple scenario showing the power of compound interest:
- 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: Investing the same $200 per month leaves you with only $235,412.97* by age 65—a difference of over $260,000, all because of a 10-year delay.
Saving early, the lower your annual savings needs each year to meet your retirement goals.
*These calculations are estimates generated with NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. The scenarios provided are intended as illustrative examples and cannot predict actual future outcomes. Actual results may vary based on factors such as market conditions, fees, and personal factors. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Irving, TX, it is often the case that you put more emphasis on reinvesting in your business rather than saving for retirement. That said, beginning a plan now allows you to:
- Benefit from tax-free future growth or penalty-free withdrawals in the future.
- Benefit from contribution flexibility that adapt to your earnings.
- Create a long-term safety measure that ensures stability, no matter how your business changes.
Starting early, the less you’ll need to worry about catching up later in life. Taking steps toward your retirement goals today means managing your financial future and giving yourself the ability to turn your attention to your objectives—both for your retirement years and your Irving, TX business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for entrepreneurs in Irving, TX, each with its own benefits and trade-offs. A financial advisor will guide you to evaluate the advantages and disadvantages of each option and choose the one best suited for your needs. In most cases, your self-employed retirement plan options in Irving, TX are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that offer specific tax advantages. In a traditional IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but retirement distributions are taxed as income. In contrast, Roth IRAs require contributions using income already taxed, but retirement withdrawals that qualify, including earnings, are tax-free. In both types of accounts, withdrawals come without 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 a source of 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 enables those who are self-employed to set aside a portion of their self-employment income. Contributions must come from an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role above the 25% you (the employer) already contributed. If you have employees, it's required to contribute the same amount for them as you do for yourself. You may choose to contribute a flat-dollar amount or a percentage of wages to employee accounts. A SEP IRA is a good option for companies with cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs are free of expensive setup or ongoing fees.
SEPs work like standard IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Employers of any type, including 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: The Solo 401(k), commonly known as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses without employees or if the only employee is your spouse. Solo 401(k)s are similar to standard 401(k) plans, and allow you to contribute as both an employee or an employer with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the additional opportunities can be balanced by more restricted investment choices. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which have the same tax benefits as their IRA contribution counterparts.
Eligibility: Only 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 are allowed to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, 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.
- Employer profit-sharing contributions (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 elective deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (as of 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan represents a type of retirement plan that guarantees a fixed, predetermined benefit to business owners upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but lets individuals clearly understand the precise amount they'll receive in retirement. This option is recommended for high-earning entrepreneurs who want to save a significant sum for retirement and are prepared to contribute larger deposits. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income in retirement.
Eligibility: Any self-employed individual operating a solo business or with less than five employees can open an individual defined benefit plan, but it's most commonly advised for people above age 50 who earn at least $250,000 a year. In most cases, 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+)
- Organizations that already put in 3-4% but are open to increasing contributions
- Companies showing consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The cap on contributions must be determined by an actuary based on your income, age, and retirement goals. Allowable contributions change annually.
The Importance of a Financial Advisor in Irving, TX for Your Self-Employed Retirement Plan
Partnering with an advisor in Irving, TX focused on self-employed retirement strategies is an invaluable resource for entrepreneurs. They offer the knowledge to assist navigate the complexities of retirement planning and design a customized plan that aligns with your goals. Your advisor in Irving, TX will review your finances, understand your risk tolerance, and assist you in choosing wisely about saving and investing for retirement. A key part of what we do for you features:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Tailor the plan to your specific situation even further
- Formalize a plan in writing as required by IRS rules
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Track and fine-tune your plan to keep it aligned with your goals
- Deliver continuous support and financial insights to help you navigate your retirement journey
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Irving, TX: Correct Capital's Process
Self-employed individuals in Irving, TX who aren’t equipped with the time or understanding to handle their self-employed retirement plan on their own often feel overwhelmed by their choices. At Correct Capital, our Irving, TX financial advisors take on the bulk of your savings plan setup for you, and strive to ensure meeting your financial objectives as hassle-free as possible for you. We are here to assist you in setting up your self-employed retirement plan in four simple steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team will assess if we're a good fit for you and your business. This short conversation lets us understand what you're looking for with no obligation or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including your employee count, your existing financial picture, and your long-term savings targets. This enables us to craft a tailored approach designed just for you.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll sit down with you and discuss your plan thoroughly to make sure it's clear and understand how it best correlates to your needs.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can initiate your savings journey. Over the course of our partnership, we'll meet with you and track your progress to keep it tailored to your evolving circumstances.
Our Irving, TX financial advisors and retirement plan consultants are fiduciary advisors, which means they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Irving, TX 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 Irving, TX
To you, your business is more than "just a business", and your Irving, TX financial advisors should provide more than simply sound financial advice. At Correct Capital, we focus on building a relationship with our clients and their businesses to deliver personalized self-employed retirement plans. To every client in Irving, TX, 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, reach out to Correct Capital at 877-930-401k or contact us online.
