Self-employed retirement plans Lincoln, NE. The flexibility of being your own boss in Lincoln, NE is one of the best aspects of having a self-directed career. Even so, this freedom can come with a lack of security, particularly regarding building your retirement fund, because you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many should consider understanding their retirement options. In addition to enjoying a more comfortable retirement, seeking advice from a financial advisor in Lincoln, NE to set up your self-employed retirement plan offers significant tax advantages that allow you to move your business forward.
Few Lincoln, NE financial advisory and retirement planning firms truly grasp the challenges faced by self-employed individuals quite like Correct Capital. Our founder's father was a small business owner himself (read more of our story here), and our firm take pride in supporting entrepreneurs with their retirement planning needs. We understand that your goals for your business and retirement go far beyond simple financial figures, and we are dedicated to provide personalized solutions to meet your unique goals. Continue exploring to find out about your self-employed retirement plan options in Lincoln, NE, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a self-employed financial advisor in Lincoln, NE today.
Why Lincoln, NE Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver immediate benefits today. With customizable contribution options to significant tax savings, working with a financial advisor in Lincoln, NE enables you to create your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income from year to year, a plan like a SEP IRA or Solo 401(k) gives you the freedom to tailor how much you save:
- Customizable Contributions: Save extra during high-income years and cut back when your earnings dip, so that your plan aligns with your cash flow.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw tax-free later—a smart decision if you believe your tax rate is likely to rise in the future.
Save Money on Taxes
Plans designed for the self-employed offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for extra credits as a self-employed individual. These state-level incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can take advantage of a credit of up to 50% of the first $2,000 put into a retirement plan, cutting down 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 stocks, bonds, and alternatives is a smart way to mitigate financial risk while continuing to build your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net helps you avoid using your retirement funds during challenging periods and incurring penalties.
Plan for the Future of Your Lincoln, NE Business
Retirement planning can assist you prepare for what’s next with your Lincoln, NE business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These accounts ensure the reliable income you’ll need in the future. Keep in mind that while selling your business results in a capital gain, contributions to retirement accounts are capped at annual limits (e.g., as much as $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you’ll owe when you transfer your business.
- Succession Planning: For those winding down or handing over their business, your retirement accounts provide financial security as you make this shift. You can also work with a financial advisor experienced in both succession and retirement strategies to minimize tax burdens associated with the transaction.
With the best-fit retirement strategy, you gain control over your financial future, cut down your tax obligations, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Lincoln, NE Now?
There’s no denying that time is one of the most valuable assets in retirement planning. Getting a head start not only lets you accumulate a bigger financial cushion but also minimizes the financial burden of saving aggressively in the future. The following are reasons why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement may cause 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 impact of this compounding process.
Example: Taylor and Alex are both self-employed individuals. Both of them want 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 saves $7,500 annually to make up for lost time.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and ends up with $691,184.39*.
- Taylor contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments invested steadily may result in substantial growth. Consider this example showing the power of compounding:
- Starting at age 25: By investing $200 per month in a retirement plan with an average annual return of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month would result in only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
Saving early, the lower your annual savings needs each year to reach your retirement goals.
*These calculations are based on estimates derived from 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. The scenarios provided are intended as illustrative examples and do not guarantee future performance. Your individual results may differ based on elements like market conditions, fees, and your unique situation. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Lincoln, NE, it might seem easier to focus more on reinvesting in your business rather than saving for retirement. Even so, beginning a plan now allows you to:
- Leverage tax-free future growth or tax-free withdrawals down the road.
- Benefit from contribution flexibility that adapt to your cash flow.
- Establish a long-term safety measure that offers peace of mind, no matter how your business evolves.
Starting early, the less you’ll have to worry about making up for lost time later in life. Taking steps toward your retirement goals today means managing your financial future and creating for yourself the ability to focus on your goals—both for your retirement years and your Lincoln, NE business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for self-employed individuals in Lincoln, NE, each offering its own pros and cons. A financial advisor will guide you to understand the advantages and disadvantages of each choice and identify the one ideal for your needs. Generally speaking, your self-employed retirement plan options in Lincoln, NE consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that provide distinct tax benefits. In a standard IRA, contributions are typically tax-deductible, and returns grow free of current taxes, but money taken out during retirement are subject to income tax. In contrast, Roth IRAs require contributions from post-tax earnings, but eligible distributions during retirement, including earnings, are not taxed. In both accounts, withdrawals come without penalties if you are at least 59½.
Eligibility: Unlike plans linked to your job, 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: SEP IRAs offers a way to save for retirement that permits entrepreneurs to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a independent business owner, you (the employee) would not be able to contribute more than the 25% you (the employer) have designated. If you have employees, you must 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. This type of plan is a good option for companies with periods of inconsistent earnings. 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: Both employers and self-employed individuals 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 allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed meant for companies that have no employees or if the only employee is your spouse. Solo 401(k)s are similar to employer-sponsored 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This offers more savings than SEPs or IRAs; however, the additional opportunities often come with more restricted investment choices. In a solo 401(k) plan, 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: As a self-employed individual 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-employed earnings, subject to the annual contribution limit. In 2025, those limits are $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 net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for individuals aged 50+ (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan offers a structured retirement solution that guarantees a set amount to entrepreneurs upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but enables participants to determine the precise amount they'll receive in retirement. This plan is recommended for wealthier self-employed individuals who are focused on saving a substantial amount for retirement and are willing to make larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxed as income in retirement.
Eligibility: Any self-employed individual running an owner-only business or employing fewer than five people are eligible to open an individual defined benefit plan, but it's most commonly suggested for those over 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans include:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% but are open to increasing contributions
- Companies with proven consistent profit patterns
- Entrepreneurs over age 40 who aim to quickly build retirement savings or accelerate the retirement savings
Contribution Limits: The cap on contributions requires calculation from an actuary using your earnings, age, and retirement objectives. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in Lincoln, NE for Your Self-Employed Retirement Plan
Working with a financial advisor in Lincoln, NE focused on self-employed retirement strategies is an important asset for entrepreneurs. They bring the skills needed to understand the intricacies of saving for retirement and develop a personalized approach that reflects your aspirations. A financial advisor in Lincoln, NE will assess where you stand financially, understand your risk tolerance, and assist you in selecting the best options about saving and investing for retirement. Part of what we do for you includes:
- Assist in selecting a plan that aligns with your objectives and circumstances
- Customize the plan to your needs even further
- Create a written plan as required by IRS rules
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Review and modify your plan when necessary
- Offer continued financial education and guidance throughout your retirement planning process
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Lincoln, NE: Correct Capital's Process
Entrepreneurs in Lincoln, NE who aren’t equipped with the time or understanding to manage their retirement savings strategy independently may end up overwhelmed when faced with their available plans. At Correct Capital, our Lincoln, NE financial advisors handle the lion's share of your savings plan setup for you, and strive to ensure meeting your retirement goals as easy as possible for you. We can help you get set up your self-employed retirement plan in just four steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if we're suited to your needs for you and your business. This brief introduction allows us to learn about your needs with no obligation or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including your employee count, your present financial standing, and your future objectives. This enables us to craft a custom plan designed just for you.
- Review Your Plan: When we finalize a plan from the information you provide, we'll sit down with you and discuss your plan step by step to help you fully grasp it and show how it aligns with your goals.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can begin contributing. Over the course of our partnership, we'll check in and monitor your plan to keep it tailored to your evolving circumstances.
Our Lincoln, NE financial advisors and retirement plan consultants are fiduciary advisors, meaning they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Lincoln, NE include:
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
Call Correct Capital for Your Self-Employed Retirement Plan in Lincoln, NE
To you, your business is more than "just a business", and your Lincoln, NE 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 provide tailored self-employed retirement plans. All our clients in Lincoln, NE benefit from our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To get started on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
