Self-Employed Retirement Plans Jefferson County, MO

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Self-employed retirement plans in Jefferson County, MO. The freedom of having your own business in Jefferson County, MO is a wonderful advantage to being self-employed. But that freedom can be accompanied by a lack of security, particularly in when it comes to saving for retirement, employer-sponsored plans aren't an option. Barely more than 10% of self-employed people have retirement plans they save with, but many would be better off exploring what plans are available. In addition to a more comfortable retirement, working with a financial advisor to set up your self-employed retirement plan in Jefferson County, MO offers tax benefits that can help propel you and your business forward.

Not many wealth management and retirement planning firms know what it's like to be self-employed or a small business owner as well as Correct Capital. In fact, we were inspired by a small business owner, our founder's father (you can read more about our story here). We have a deep understanding that your business and retirement goals extend far beyond just profit, and we are dedicated to providing tailored solutions that fit where you are and where you want to go. Continue reading to read more about your self-employed retirement plan options in Jefferson County, MO, or call Correct Capital at 877-930-4015 or contact us online to speak to a small business financial advisor now.


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Types of Self-Employed Retirement Plans

There are a few different retirement savings options available for self-employed individuals, each with its own set of benefits and considerations. A Jefferson County, MO financial advisor can help you comprehend the pros and cons of each option and choose that helps both your short- and long-term goals. Generally, your self-employed retirement plan options in Jefferson County, MO are comprised of:


Traditional or Roth IRA

Plan Overview: IRAs, or Individual Retirement Accounts, are personal savings plans that allows you to set aside money for the future, with special tax considerations. If you deposit to a traditional IRA, deposits are deducted from your taxable income, and any gains on investments grow tax-deferred, but distributions in retirement are subject to income tax. In contrast, Roth IRA deposits are made with money you've already paid taxes on, but qualified withdrawals in retirement, including investment gains, are tax-free. In both a traditional an a Roth IRA, withdrawals are penalty-free as long as you are at least 59Ā½.

Eligibility: While many retirement plans, such as 401(k)s, are set up through an employer, traditional and Roth IRAs are available to anyone with an earned income.

Contribution Limits: For 2023, annual contribution limits for IRAs are $6,500, or $7,500 if you're 50 or older.

Simplified Employee Pension Plan (SEP IRA)

Plan Overview: A Simplified Employee Pension (SEP) IRA is a retirement plan that allows self-employed individuals to contribute a share of of their net earnings from self-employment. Since you are self-employed, you (the employee) have a contribution limit of no more than the 25% already contributed by you (the employer). If you have employees, you must contribute an equal amount to their pensions. You may choose to contribute either a fixed dollar sum or a percentage of wages to employee accounts. SEP IRAs may be a good self-employed retirement plan if your business goes through cycles of high revenue and low revenue. SEP IRAs don't have expensive initial setup or administrative charges other retirement plans do.

SEPs work like traditional IRAs, where payments are made with pre-tax money and withdrawals are taxed as income.

Eligibility: Any employer, including the self-employed, can set up a SEP.

Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:

  • 25% of compensation, or
  • $66,000

For the self-employed individual, the maximum amount you can contribute in a given year is decided by a special calculation.

Solo 401(k)

Plan Overview: A Solo 401(k) plan, also known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan for businesses with no employees or whose only employee is a spouse. Solo 401(k)s function in the same same way as employer-sponsored 401(k) plans, and you can make contributions as an employee and on your own behalf as the employer. This offers more savings than SEPs or IRAs, however the additional opportunities for saving are often counteracted by more limited investment options. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which each enjoy the same tax advantages as their IRA contribution counterparts.

Eligibility: Only sole proprietors and their spouses have access to individual 401(k)s.

Contribution Limits: As a self-employed individual with a solo 401(k) plan, you can make two types of contributions:

  1. Elective deferrals (as an employee) of a maximum of 100% of your earned income from self-employment, up to the annual contribution limit. In 2023, those limits are $22,500, or $30,000 if you are 50 or older.
  2. Employer profit-sharing contributions (as an employer) of a maximum of 25% of your net self-employment income, which is your net profit minus half of your self-employment tax and the elective deferrals you made.

On an annual basis, contributions cannot exceed $66,000, or $73,500 if you're over age 50 (in 2023).

Individual Defined Benefit Plan

Plan Overview: A defined benefit plan is a retirement plan that provides a a predetermined benefit to self-employed individuals after they've left the workforce. As opposed to 401(k)s or IRAs, a defined benefit plan doesn't fluctuate because of investment gains, but allows self-employed people to know exactly how much they'll get in retirement. This plan is ideal for high-earning self-employed individuals who want to save a a significant sum for retirement and want to add significant contributions. Contributions are tax deferred and contributions are taxed as income in retirement.

Eligibility: Any self-employed individual who runs an owner-only business or has less than five employees can open an individual defined benefit plan, but it's typically not a great idea unless you're over 50 and earn at least $250,000 a year. Those interested in defined benefit plans tend to be:

  • Partners or owners who desire to save more than $66,000 (or $73,500 over age 50)
  • Companies already contributing 3-4% who are willing to do more
  • Companies who have demonstrated consistent profit patterns
  • Partners or owners over age 40 who desire to make up for earlier years when they didn't save as much

Contribution Limits: The contribution limit is decided by an actuary based on your income, age, and retirement goals. Contribution limits change every year.

The Importance of a Financial Advisor for Your Self-Employed Retirement Plan in Jefferson County, MO

A financial advisor in Jefferson County, MO specialized in self-employed retirement plans can be an invaluable resource for self-employed individuals. They have the experience to help you understand the intricacies of retirement planning and develop a tailored strategy that gets you where you want to go. A financial advisor will evaluate your financial situation, understand your risk tolerance, and help you make smart decisions for yourself, both as employer and future retiree. Part of what we do for you includes:

  • Help you choose a plan that best fits your needs and goals
  • Tailor the plan to your needs even further
  • Adopt a written plan in accordance with IRS guidelines
  • Arrange a trust plan for assets
  • Implement a record keeping system
  • Help you understand the plan's terms
  • Monitor and adjust your plan as needed
  • Offer continued financial education and guidance as long as you work with us
  • Increase your retirement income by maximizing your social security benefits

Self-Employed Retirement Plans in Jefferson County, MO: Correct Capital's Process

Jefferson County, MO business owners who don't want to invest the time, interest, and skill set to manage their own self-employed retirement plan can become burdened with the different options available to them. At Correct Capital, our retirement consultants handle the bulk of the retirement planning work for you, and attempt to make meeting the golden years of your dreams as easy as possible for you. We can help you establish and maintain your self-employed retirement plan in a straightforward four-step process:

  1. Schedule a Call — We only need a short 20-minute call for one of our advisors to know if we're suitable for you and your business. This brief introduction lets us get a feel for what you're looking for with no obligation on your part.
  2. Gather Information — If we both decide to move forward, we'll request more info, including how many employees you have (if any), your current finances, and your retirement goals. This allows us to put together a personalized plan based entirely on type of advising you need.
  3. Review Your Plan — After we put together a plan based on the information you provide, we'll meet with you and go over the details of your plan to ensure you understand it.
  4. Implementation and Monitoring — Once we've agreed on your plan, we'll put everything in place so your savings can start growing immediately. Throughout your time partnering with us, we'll meet with you and adjust your plan to ensure it stays suited to your needs.

Our financial advisors and retirement consultants are fiduciary advisors who have a legal and ethical obligation to do what's best for you and only you. We are proud to provide clear communication and excellent service to assist you attain your self-employed retirement goals.

Other services we offer in Jefferson County, MO include:

Self-Employed Retirement Plans Jefferson County, MO | Financial Advisors | Retirement Consultants Near Jefferson County

Call Correct Capital for Your Jefferson County, MO Self-Employed Retirement Plan

Your business isn't simply an enterprise to you, and your Jefferson County, MO financial advisors need to provide you with more than merely sage financial advice. Correct Capital enjoys getting to know our clients and their business to deliver customized self-employed retirement plans. We offer all our Jefferson County, MO clients our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To get started on your self-employment retirement plan in Jefferson County, MO, speak to a financial advisor today at 877-930-4015 or contact us online.


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