Self-employed retirement plans Jacksonville, FL. The flexibility of owning your own business in Jacksonville, FL offers many benefits of having a self-directed career. That said, this independence can come with a lack of security, particularly when it comes to planning for retirement, since you don't have the option of retirement programs through an employer. 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 secure retirement, seeking advice from a financial advisor in Jacksonville, FL to set up your self-employed retirement plan can provide significant tax advantages that allow both you and your business to thrive.
Few Jacksonville, FL financial advisory 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 (learn more about our story here), and we are deeply experienced in assisting business owners in their retirement planning needs. We recognize that your business and retirement aspirations extend well past simple financial figures, and we are dedicated to offer tailored solutions to meet your unique goals. Continue exploring to find out about your self-employed retirement plan options in Jacksonville, FL, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Jacksonville, FL today.
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Why Jacksonville, FL Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also provide immediate benefits today. From flexible contributions to substantial tax savings, consulting a financial advisor in Jacksonville, FL allows you to create your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to adjust how much you save:
- Customizable Contributions: Save extra during profitable years and scale back when your earnings dip, so that your plan aligns with your current income.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw without tax penalties in the future—a wise move if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, helping you keep more of your hard-earned money.
- 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 could qualify for extra deductions as a business owner. These regional incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can take advantage of a 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
Planning for a safe retirement requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Allocating your investments across different stocks, bonds, and other assets is a smart way to minimize exposure to risk while still growing your nest egg.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business helps you avoid tapping into your nest egg during challenging periods and risking extra costs.
Plan for the Future of Your Jacksonville, FL Business
Preparing for retirement enables you to think through what’s next with your Jacksonville, FL business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and won’t be included in the sale. These savings offer the reliable income you’ll need during retirement. Keep in mind that while the sale of a business usually creates a capital gain, deposits into these plans 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: Using retirement contributions wisely can reduce the taxes you are required to pay when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts offer the funds you need through the transition. You can also seek advice from a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens on the sale.
With the best-fit retirement 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 Jacksonville, FL Now?
There’s no denying that time is one of the most important factors in retirement planning. Beginning sooner rather than later not only helps you grow a larger nest egg but also minimizes the stress of saving aggressively in the future. The following are reasons why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings could lead to a major impact on the savings you’ll have when you reach retirement age. The biggest reason is compound interest—the concept where your investments generate earnings, and those returns, subsequently, earn even more returns. The greater time span your money has to grow, the more significant the benefit of compounding.
Example: Two individuals, Alex and Taylor are both self-employed individuals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but contributes $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time can lead to substantial growth. Consider this example showing the impact of compounding:
- Starting at age 25: If you invest $200 per month in a retirement plan with an projected return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month leaves you with only $235,412.97* by age 65—a shortfall of over $260,000, simply due to a 10-year delay.
Starting sooner, the less you need to save each year to meet your retirement goals.
*These calculations represent estimates generated with NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. The scenarios provided are for illustrative purposes only and cannot predict actual future outcomes. Actual results may vary depending on factors such as market conditions, fees, and your unique situation. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Jacksonville, FL, it is often the case that you focus more on reinvesting in your business over saving for retirement. Even so, starting a plan now allows you to:
- Take advantage of tax-deferred growth or withdrawals without taxes down the road.
- Take advantage of flexible contributions that change with your earnings.
- Create a long-term safety measure that provides security, no matter how your business changes.
The sooner you start, the less you’ll be required to worry about catching up later in life. Saving for retirement now means taking control of your financial future and creating for yourself the opportunity to concentrate on your objectives—both for your future retirement and your Jacksonville, FL business.
Types of Self-Employed Retirement Plans
There are several retirement savings options available for entrepreneurs in Jacksonville, FL, each providing its own advantages and considerations. A financial advisor can help you learn about the benefits and drawbacks of each plan and identify the one ideal for your unique situation. Typically, your self-employed retirement plan options in Jacksonville, FL are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that provide key tax perks. In a traditional IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but retirement distributions are subject to income tax. In contrast, Roth IRAs require contributions from post-tax earnings, but retirement withdrawals that qualify, including earnings, are not taxed. In both accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are accessible for individuals with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs is a retirement plan that allows self-employed individuals to save a percentage of their net business profits. Contributions are strictly employer contributions an employer, so, as a sole proprietor, you (the employee) would not be able to contribute 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 have the flexibility to contribute a flat-dollar amount or a percentage of wages to employee accounts. A SEP IRA may be ideal for businesses that experience cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs lack costly startup or administrative fees.
SEPs function like standard IRAs, where the contributions are tax-deferred and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser 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: The Solo 401(k), commonly known as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan designed for businesses with no employees or where the only employee is a spouse. This type of plan 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 than 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 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 have the ability to make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employment income, 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 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 defined as net profit minus half of your self-employment tax and the elective deferrals you made.
Total contributions are capped at $70,000, or $77,500 if you're over age 50 (in 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that guarantees a fixed, predetermined benefit to self-employed individuals upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine the precise amount they'll get in retirement. This strategy is recommended for wealthier entrepreneurs who are focused on saving a substantial amount for retirement and can commit to making larger deposits. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income in 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 typically recommended for individuals aged 50+ who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans include:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% but are open to increasing contributions
- Organizations with proven consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The maximum allowable contribution must be determined by an actuary determined by your earnings, age, and retirement objectives. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in Jacksonville, FL for Your Self-Employed Retirement Plan
Partnering with an advisor in Jacksonville, FL experienced with retirement plans for the self-employed can be an essential partner for those working for themselves. They have the expertise to help understand the intricacies of saving for retirement and craft a personalized approach that matches your objectives. An expert in your area will assess where you stand financially, 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 includes:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Customize the plan to fit you personally even further
- Adopt a written plan as required by IRS rules
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Review and modify your plan as needed
- Deliver continuous support and financial insights as you continue on the road to retirement
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Jacksonville, FL: Correct Capital's Process
Self-employed individuals in Jacksonville, FL who lack the time, interest, or knowledge to oversee their self-employed retirement plan independently can become overwhelmed by their options. At Correct Capital, our Jacksonville, FL financial advisors handle the bulk of your savings plan setup for you, to help make meeting your future savings targets as easy as possible for you. We can help you get set up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team will assess if we're suited to your needs for you and your business. This initial call helps us get a sense of your goals with zero commitment or extensive time commitment on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including how many employees you have (if any), your existing financial picture, and your long-term savings targets. This allows us to put together 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 review your plan thoroughly to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll implement the necessary steps so you can start saving. Throughout our relationship, we'll meet with you and monitor your plan to make sure it remains aligned with your goals.
Our Jacksonville, FL financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Jacksonville, FL 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 Jacksonville, FL
You don't see your business as "just a business", and your Jacksonville, FL financial advisors should provide more than basic financial recommendations. With Correct Capital, we take the time to get to know our clients and their businesses to deliver tailored self-employed retirement plans. We offer all our Jacksonville, FL clients our I.O.U. promise: all guidance we provide 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.
