Self-employed retirement plans Jersey City, NJ. The independence of being your own boss in Jersey City, NJ offers many benefits of having a self-directed career. However, this freedom can come with potential drawbacks, particularly when it comes to retirement savings, as you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, although many could benefit from looking into other possibilities. In addition to achieving a financially stable retirement, working with a financial advisor in Jersey City, NJ to create your self-employed retirement plan offers significant tax advantages that enable your business to grow and succeed.
Few Jersey City, NJ wealth management and retirement planning firms are as attuned to the requirements of self-employed individuals as well as Correct Capital. Our company’s founder grew up with a father who 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 know that your professional and personal aspirations aren’t limited to basic numbers, and we are dedicated to create tailored solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Jersey City, NJ, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Jersey City, NJ today.
Schedule a Meeting With an Advisor Today
Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
Schedule a 15-Minute Introductory Call
Why Jersey City, NJ Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also offer immediate benefits today. Offering flexibility in contributions to substantial tax savings, working with a financial advisor in Jersey City, NJ helps you customize your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to modify how much you save:
- Customizable Contributions: Save extra during successful years and scale back when income is lower, so your plan works with your current income.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw tax-free later—a smart decision if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, 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 compound.
- State-Specific Incentives: Based on your location, you might access additional deductions as a business owner. These local incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a credit of up to 50% of the first $2,000 put into a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement goes beyond just how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Spreading your investments across a mix of asset classes like stocks and bonds serves to mitigate financial risk while helping to grow your nest egg.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund helps you avoid using your retirement funds during tough times and risking extra costs.
Plan for the Future of Your Jersey City, NJ Business
Preparing for retirement enables you to think through what’s next with your Jersey City, NJ business:
- Selling Your Business: When selling your business, accounts such as SEP IRAs or Solo 401(k)s stay in your name and won’t be included in the sale. These savings ensure the financial stability you’ll need during retirement. It’s important to note that while selling a business often leads to a capital gain, contributions to retirement accounts 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, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you’ll owe when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings ensure the funds you need through the transition. You might want to seek advice from a financial advisor who specializes in succession planning and retirement accounts to reduce taxes associated with the transaction.
With the best-fit retirement strategy, you manage your financial future, lower your tax bill, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Jersey City, NJ Now?
Time is one of the most crucial factors in retirement planning. Beginning sooner rather than later not only lets you accumulate a bigger financial cushion but also minimizes the financial burden of playing catch-up as you get older. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings can have a major impact on the savings you’ll have when you stop working. The main reason is compound interest—the concept where your investments grow, and those returns, in turn, earn even more returns. The more time your money has to grow, the greater the benefit of compounding.
Example: Alex and Taylor are both entrepreneurs. 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 saves $7,500 annually to make up for lost time.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and ends up with $691,184.39*.
- Taylor contributes $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time may result in impressive growth. Here’s a simple scenario showing the power of compounding:
- Starting at age 25: If you invest $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: Contributing the same $200 per month yields only $235,412.97* by age 65—a difference of over $260,000, all because of a 10-year delay.
Starting sooner, the less effort required each year to achieve your retirement goals.
*The figures provided in this example are based on estimates generated with NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. This information is meant to provide general guidance and do not guarantee future performance. Your individual results may differ depending on variables including market conditions, fees, and personal factors. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in Jersey City, NJ, it can be tempting to prioritize reinvesting in your business over saving for retirement. However, initiating a plan now enables you to:
- Take advantage of tax-deferred growth or penalty-free withdrawals in the future.
- Benefit from flexible contributions that align with your earnings.
- Build a long-term safety measure that provides security, no matter how your business develops.
Starting early, the less you’ll need to worry about playing catch-up later in life. Building your retirement savings today means gaining control over your financial future and creating for yourself the freedom to concentrate on your objectives—both for your retirement years and your Jersey City, NJ business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for entrepreneurs in Jersey City, NJ, each offering its own advantages and considerations. A financial advisor will guide you to evaluate the benefits and drawbacks of each plan and choose the one ideal for your needs. In most cases, your self-employed retirement plan options in Jersey City, NJ are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that include specific tax advantages. In a standard IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but retirement distributions are taxable. In contrast, with Roth IRAs, you contribute are made with after-tax income, but eligible distributions during retirement, including earnings, are not taxed. In both types of accounts, withdrawals are penalty-free provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, both traditional and Roth IRAs are open to those with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that enables those who are self-employed to save a percentage of their net business profits. Contributions must come from an employer, so, as a independent business owner, you (the employee) cannot make additional contributions above the 25% you (the employer) already contributed. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. You have the flexibility to contribute a fixed dollar figure or a percentage of wages to employee accounts. SEP IRAs is a good option for companies with fluctuating revenue streams. Unlike other plans, SEP IRAs are free of 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: Employers of any type, including self-employed individuals can set up 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 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 companies that have no employees or when the sole employee is your spouse. These plans are similar to employer-sponsored 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This allows for more savings than SEPs or IRAs; however, the increased savings potential may be offset by more constrained investment avenues. Using a solo 401(k), you can make either traditional or Roth deferrals, which have 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: For self-employed individuals with a solo 401(k) plan, you can make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employment income, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) cannot exceed 25% of your adjusted self-employment income, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that delivers a pre-established payout to self-employed individuals upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but lets individuals clearly understand the precise amount they'll get in retirement. This strategy is ideal for wealthier self-employed individuals who want to save a substantial amount for retirement and can commit to making sizeable contributions. Contributions offer tax-deferred growth, and withdrawals are taxed as income upon retirement.
Eligibility: Any self-employed individual managing a one-person company or with a small staff of under five are eligible to open an individual defined benefit plan, but it's most commonly recommended for people above age 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans include:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Organizations that already put in 3-4% but are open to increasing contributions
- Businesses showing consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The cap on contributions must be determined by an actuary using your financial situation, age, and savings targets. Allowable contributions change annually.
The Importance of a Financial Advisor in Jersey City, NJ for Your Self-Employed Retirement Plan
Partnering with an advisor in Jersey City, NJ specialized in self-employed retirement plans can be an essential partner for those working for themselves. They offer the knowledge to assist understand the intricacies of saving for retirement and develop a customized plan that reflects your aspirations. An expert in your area will review your finances, understand your risk tolerance, and guide you in selecting the best options about saving and investing for retirement. Part of what we do for you features:
- Assist in selecting a plan that best fits your needs and goals
- Tailor the plan to fit you personally even further
- Formalize a plan in writing as required by IRS rules
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Review and modify your plan as needed
- Deliver continuous support and financial insights throughout your retirement planning process
- Boost your retirement earnings by making the most of your social security
Self-Employed Retirement Plans in Jersey City, NJ: Correct Capital's Process
Jersey City, NJ business owners who don’t have the time or expertise to handle their self-employed retirement plan independently often feel overwhelmed by their available plans. With Correct Capital, our Jersey City, NJ financial advisors handle the majority of your retirement strategy for you, and strive to ensure meeting your retirement goals as easy 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: A quick 20-minute call is all it takes, a member of our advisor team can determine 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: If we both decide to move forward, we'll gather information, including how many employees you have (if any), your existing financial picture, and your retirement goals. This enables us to craft a custom plan suited specifically for your needs.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll meet with you and discuss your plan thoroughly to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can start saving. Throughout our relationship, we'll meet with you and review your strategy to keep it tailored to your evolving circumstances.
Our Jersey City, NJ financial advisors and retirement plan consultants are 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 Jersey City, NJ 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 Jersey City, NJ
Your business isn't "just a business" to you, and your Jersey City, NJ financial advisors must deliver more than just good financial guidance. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to provide customized self-employed retirement plans. We offer all our Jersey City, NJ clients our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To begin on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
