Self-employed retirement plans Lakewood, CO. The independence of running your own company in Lakewood, CO offers many benefits of having a self-directed career. However, this freedom can come with a lack of security, notably when it comes to retirement savings, because you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from looking into other possibilities. In addition to achieving a more secure retirement, working with a financial advisor in Lakewood, CO to establish your self-employed retirement plan can provide significant tax advantages that enable you to move your business forward.
Few Lakewood, CO investment consulting and retirement planning firms truly grasp the challenges faced by entrepreneurs quite like Correct Capital. Our founder's father was a small business owner himself (check out our story here), and we take pride in helping businesses with their retirement planning needs. We understand that your goals for your business and retirement aren’t limited to basic numbers, and we strive to provide customized solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Lakewood, CO, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Lakewood, CO today.
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Why Lakewood, CO 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 significant tax savings, working with a financial advisor in Lakewood, CO helps you design your retirement plan to align with your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) provides the freedom to modify how much you save:
- Customizable Contributions: Set aside more during high-income years and reduce savings when revenues are down, so that your plan aligns with your current income.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw without tax penalties in the future—an advantageous choice if you believe your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, allowing you to keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to accumulate.
- State-Specific Incentives: In some states, you may be eligible for extra tax breaks as a business owner. These state-level incentives make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can apply for 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 goes beyond just how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Spreading your investments across varied stocks, bonds, and other assets is a smart way to minimize exposure to risk while helping to grow your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net helps you avoid tapping into your nest egg during challenging periods and incurring penalties.
Plan for the Future of Your Lakewood, CO Business
A thoughtful retirement strategy enables you to prepare for what’s next with your Lakewood, CO business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain yours and don’t transfer with the business. These accounts can provide the reliable income you’ll need later on. Remember that while selling your business results in a capital gain, retirement plan contributions are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you might face when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg ensure a stable foundation through the transition. You may also seek advice from a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens on the sale.
With the proper savings strategy, you can take control of your financial future, reduce your tax burden, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Lakewood, CO Now?
Time remains one of the most crucial resources for building your retirement fund. Starting early not only helps you grow a more substantial retirement fund but also lowers the financial burden of catching up later in life. This is why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings can have a significant impact on the savings you’ll have when you stop working. The main reason is compound interest—the powerful process where your investments generate earnings, and those returns, subsequently, generate even more returns. The greater time span your money has to grow, the larger the impact of compounding.
Example: Taylor and Alex are both self-employed individuals. Both of them want to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor delays savings until age 40 but puts away $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex contributes $180,000 and accumulates $691,184.39*.
- Taylor puts in $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 power of consistent growth:
- Starting at age 25: By investing $200 per month in a retirement plan with an average annual return of 7%, you’ll accumulate $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, just from a 10-year delay.
Saving early, the less effort required each year to achieve your retirement goals.
*The numbers shown in this scenario are based on estimates generated with NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are for illustrative purposes only and cannot predict actual future outcomes. Your individual results may differ depending on variables including market conditions, fees, and your unique situation. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Lakewood, CO, it might seem easier to focus more on reinvesting in your business instead of saving for retirement. However, beginning a plan now gives you the chance to:
- Take advantage of tax-free future growth or penalty-free withdrawals later on.
- Take advantage of contribution flexibility that adapt to your cash flow.
- Establish a financial cushion that ensures stability, no matter how your business evolves.
The sooner you start, the less you’ll have to worry about playing catch-up later in life. Taking steps toward your retirement goals today means gaining control over your financial future and allowing yourself the freedom to focus on your dreams—both for your retirement years and your Lakewood, CO business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for those working for themselves in Lakewood, CO, each with its own benefits and trade-offs. A financial advisor is available to help you learn about the pros and cons of each option and choose the one best suited for your needs. Generally speaking, your self-employed retirement plan options in Lakewood, CO include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that offer distinct tax benefits. In a traditional IRA, the money you contribute is often tax-deductible, and earnings grow without immediate taxation, but retirement distributions are taxable. In contrast, Roth IRAs require contributions are made with after-tax income, but retirement withdrawals that qualify, including earnings, are not taxed. In both accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, both traditional and Roth IRAs are available to anyone with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs serves as a retirement savings option that permits those who are self-employed to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a independent business owner, you (the employee) cannot make additional contributions more than the 25% you (the employer) already contributed. If you have employees, you must contribute the same amount for them as you do for yourself. You have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for businesses that experience cycles of high revenue and low revenue. Unlike other plans, SEP IRAs are free of costly startup or administrative fees.
SEPs function like standard IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are capped at the lower of:
- 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: 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 intended for companies that have no employees or if the only employee is your spouse. This type of plan function similarly to employer-sponsored 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This provides more savings versus SEPs or IRAs; however, the increased savings potential may be offset by more limited investment options. 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: Solo 401(k)s are available solely to business owners and their spouses may establish and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you can make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 for those aged 50 and above, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) cannot exceed 25% of your adjusted self-employment income, which is calculated as net profits less half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (as of 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan is a retirement option that provides a pre-established payout to entrepreneurs upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but lets individuals clearly understand what they'll have in retirement. This strategy is best suited for high-earning entrepreneurs who aim to accumulate a substantial amount for retirement and are prepared to contribute substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income in retirement.
Eligibility: Self-employed professionals operating a solo business or with less than five employees are eligible to open an individual defined benefit plan, but it's most commonly suggested for people above age 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans are:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 for individuals 50 and older)
- Organizations that already put in 3-4% and are willing to do more
- Companies that have demonstrated consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution must be determined by an actuary determined by your earnings, age, and retirement objectives. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Lakewood, CO for Your Self-Employed Retirement Plan
A financial advisor in Lakewood, CO experienced with retirement plans for the self-employed serves as an important asset for those working for themselves. They have the expertise to help navigate the complexities of retirement planning and develop a personalized approach that matches your objectives. Your advisor in Lakewood, CO will evaluate your financial situation, identify your risk preferences, and help you in selecting the best options about saving and investing for retirement. A key part of what we do for you involves:
- Help you choose a plan that best fits your needs and goals
- Tailor the plan to your needs even further
- Formalize a plan in writing that complies with IRS regulations
- Organize a trust plan to manage your assets
- Ensure you comprehend the plan's terms
- Track and fine-tune your plan as needed
- Provide ongoing education and advice throughout your retirement planning process
- Maximize what you receive in retirement by maximizing your social security benefits
Self-Employed Retirement Plans in Lakewood, CO: Correct Capital's Process
Self-employed individuals in Lakewood, CO who don’t have the time or expertise to manage their self-employed retirement plan themselves can become overwhelmed by their choices. With Correct Capital, our Lakewood, CO financial advisors manage the majority of your retirement strategy for you, working to make meeting your retirement goals as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team can help understand if we're suited to your needs for you and your business. This short conversation allows us to understand what you're looking for with zero commitment or significant effort on your part.
- Gather Information: Should we agree to proceed, we'll gather information, including whether you have employees, your current financial situation, and your long-term savings targets. This enables us to craft a custom plan designed just for you.
- Review Your Plan: After we put together a plan based on the information you provide, we'll meet with you and discuss your plan in detail to ensure you understand it and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll put everything in place so you can begin contributing. As time goes on, we'll meet with you and monitor your plan to keep it tailored to your evolving circumstances.
Our Lakewood, CO financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are required by law and ethical standards to prioritize your needs above all else.
Other financial advisory services we offer in Lakewood, CO 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 Lakewood, CO
Your business isn't "just a business" to you, and your Lakewood, CO financial advisors must deliver more than just good financial guidance. At Correct Capital, we focus on building a relationship with our clients and their businesses to provide customized self-employed retirement plans. To every client in Lakewood, CO, we provide our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
