Self-employed retirement plans Kansas City, KS. The independence of being your own boss in Kansas City, KS is one of the greatest advantages of being self-employed. Even so, this independence sometimes brings with certain challenges, especially when it comes to retirement savings, because you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from understanding their retirement options. In addition to achieving a more secure retirement, seeking advice from a financial advisor in Kansas City, KS to set up your self-employed retirement plan delivers significant tax advantages that allow your business to grow and succeed.
Few Kansas City, KS financial advisory and retirement planning firms understand the needs of entrepreneurs quite like Correct Capital. Our founder's father was a small business owner himself (check out our story here), and our firm have a rich history of supporting entrepreneurs with their retirement planning needs. We understand that your professional and personal aspirations aren’t limited to basic numbers, and we work tirelessly to provide customized solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Kansas City, KS, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Kansas City, KS today.
Why Kansas City, KS Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver tangible benefits today. Offering flexibility in contributions to substantial tax savings, consulting a financial advisor in Kansas City, KS helps you create 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 freedom to adjust how much you save:
- Customizable Contributions: Save extra during profitable years and reduce savings when revenues are down, 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, so you can withdraw your savings tax-free down the road—an advantageous choice if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, helping you keep more of your earnings.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, which gives your money more time to grow.
- State-Specific Incentives: Based on your location, you may be eligible for extra tax breaks as a sole proprietor. These regional incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax credit of up to 50% of the first $2,000 they contribute a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future requires more than how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Spreading your investments across varied stocks, bonds, and alternatives is a smart way to reduce risk while continuing to build your savings.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business ensures you don’t dipping into savings during tough times and incurring penalties.
Plan for the Future of Your Kansas City, KS Business
A thoughtful retirement strategy enables you to think through what’s next with your Kansas City, KS business:
- Selling Your Business: When selling your business, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These savings ensure the financial stability you’ll need during retirement. Remember 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 up to $70,000 for Solo 401(k)s, factoring in catch-up contributions, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you’ll owe when you sell your business.
- Succession Planning: For those winding down or handing over their business, your nest egg provide a stable foundation through the transition. You might want to seek advice from a financial advisor with expertise in succession and retirement planning to help with taxes on the sale.
With the best-fit retirement strategy, you can take control of your financial future, lower your tax bill, and create a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Kansas City, KS Now?
Time remains one of the most valuable resources when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a larger nest egg but also minimizes the stress of playing catch-up as you get older. This is why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement could lead to a significant impact on the total you’ll have when you stop working. The main reason is compound interest—the powerful process where your investments grow, and those returns, then, accumulate even more returns. The longer your money has to grow, the greater the impact of compounding.
Example: Taylor and Alex are both entrepreneurs. 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 puts away $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time may result in substantial growth. Consider this example showing the impact of consistent growth:
- Starting at age 25: By investing $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: Saving the same $200 per month would result in 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 derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. This information is for illustrative purposes only and are not a promise of future results. Actual results may vary depending on variables including market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Kansas City, KS, it is often the case that you prioritize reinvesting in your business rather than saving for retirement. That said, initiating a plan now allows you to:
- Take advantage of growth that is tax-deferred or withdrawals without taxes in the future.
- Benefit from adjustable savings that adapt to your cash flow.
- Create a long-term safety measure that offers peace of mind, no matter how your business evolves.
Getting started now, the less you’ll be required to worry about playing catch-up later in life. Saving for retirement now means taking control of your financial future and creating for yourself the ability to turn your attention to your goals—both for your golden years and your Kansas City, KS business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for self-employed individuals in Kansas City, KS, each with its own advantages and considerations. A financial advisor is available to help you evaluate the benefits and drawbacks of each option and determine the one ideal for your circumstances. Typically, your self-employed retirement plan options in Kansas City, KS are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that offer key tax perks. In a conventional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but withdrawals in retirement are taxed as income. In contrast, with Roth IRAs, you contribute are made with after-tax income, but retirement withdrawals that qualify, including earnings, are tax-free. In both types of accounts, withdrawals come without penalties if you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, IRAs, including traditional and Roth options are open to those with an earned income.
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: A Simplified Employee Pension (SEP) IRA serves as a retirement savings option that enables self-employed individuals to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a sole proprietor, you (the employee) would not be able to contribute more than the 25% you (the employer) have designated. 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 fixed dollar figure or a percentage of wages to employee accounts. SEP IRAs may be ideal for businesses that experience periods of inconsistent earnings. Unlike other plans, SEP IRAs are free of costly startup or administrative fees.
SEPs operate like conventional 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 must not exceed:
- 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: A Solo 401(k) plan, also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed meant for businesses without employees or where the only employee is a spouse. Solo 401(k)s operate much like traditional employer-managed 401(k) plans, and allow you to contribute as both the employer and the employee with pre-tax money. This provides more savings than 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 share the same tax benefits as their IRA contribution counterparts.
Eligibility: Only 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 have the ability to make two types of contributions:
- Employee contributions of up to 100% of your earned income from self-employment, 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.
- Contributions as an employer (as an employer) must not surpass 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.
Total contributions are capped at $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: The defined benefit plan is a retirement option that delivers a set amount to business owners upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but lets individuals clearly understand exactly how much they'll have in retirement. This plan is best suited for higher-income professionals who want to save a large amount for retirement and can commit to making larger deposits. Contributions are tax deferred, and withdrawals incur taxes as income upon retirement.
Eligibility: Entrepreneurs operating a solo business or employing fewer than five people may establish an individual defined benefit plan, but it's generally recommended for people above age 50 who make $250,000 or more annually. Generally, good candidates for defined benefit plans tend to be:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% and are willing to do more
- Companies showing consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The cap on contributions requires calculation from an actuary determined by your income, age, and retirement goals. Allowable contributions change annually.
The Importance of a Financial Advisor in Kansas City, KS for Your Self-Employed Retirement Plan
Working with a financial advisor in Kansas City, KS focused on self-employed retirement strategies can be an essential partner for entrepreneurs. They have the expertise to help guide you through the challenges of retirement planning and design a tailored strategy that matches your objectives. Your advisor in Kansas City, KS will evaluate your financial situation, identify your risk preferences, and help you in making informed decisions about saving and investing for retirement. A key part of what we do for you features:
- Help you choose a plan that aligns with your objectives and circumstances
- Further adapt the plan to your specific situation even further
- Formalize a plan in writing in accordance with IRS guidelines
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Track and fine-tune your plan when necessary
- Offer continued financial education and guidance throughout your retirement planning process
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Kansas City, KS: Correct Capital's Process
Entrepreneurs in Kansas City, KS who lack the time, interest, or knowledge to manage their self-employed retirement plan on their own often feel overwhelmed by their choices. Through our team at Correct Capital, our Kansas City, KS financial advisors manage the lion's share of your retirement planning for you, and strive to ensure meeting your retirement goals as hassle-free as possible for you. We are here to assist you in setting up your self-employed retirement plan in just four steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can help understand if we're a good fit for you and your business. This brief introduction allows us to 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 gather information, including whether you have employees, your existing financial picture, and your future objectives. This enables us to craft a personalized strategy that aligns with your goals.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll sit down with you and review your plan step by step to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can initiate your savings journey. Throughout our relationship, we'll check in and monitor your plan to ensure it stays suited to your needs.
Our Kansas City, KS financial advisors and retirement plan consultants are fiduciary advisors, meaning they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Kansas City, KS include:
- Family Wealth Planning
- Financial Planning for Business Owners
- Comprehensive Financial Planning
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 401(k) Audit
Call Correct Capital for Your Self-Employed Retirement Plan in Kansas City, KS
You don't see your business as "just a business", and your Kansas City, KS financial advisors should provide more than just good financial guidance. With Correct Capital, we focus on building a relationship with our clients and their businesses to deliver tailored self-employed retirement plans. We offer all our Kansas City, KS 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.
