Self-employed retirement plans Long Beach, CA. The freedom of running your own company in Long Beach, CA is one of the greatest advantages of having a self-directed career. That said, this independence can come with certain challenges, especially when it comes to retirement savings, since you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off exploring their options. In addition to enjoying a more comfortable retirement, partnering with a financial advisor in Long Beach, CA to establish your self-employed retirement plan can provide significant tax advantages that allow your business to grow and succeed.
Few Long Beach, CA investment consulting and retirement planning firms understand the needs of entrepreneurs as well as Correct Capital. Our founder's father was a small business owner himself (read more of our story here), and our firm have a rich history of helping businesses with their retirement planning needs. We recognize that your business and retirement aspirations extend well past just monetary concerns, and we are dedicated to create customized solutions that reflect your objectives. Continue exploring to find out about your self-employed retirement plan options in Long Beach, CA, or reach out to Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Long Beach, CA today.
Why Long Beach, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also offer tangible benefits today. From flexible contributions to significant tax savings, working with a financial advisor in Long Beach, CA allows you to customize your retirement plan to suit your individual circumstances.
Flexibility That Fits Your Income
If your income changes from year to year, a plan like a SEP IRA or Solo 401(k) provides the option to tailor how much you save:
- Customizable Contributions: Save extra during high-income years and scale back when income is lower, so your plan aligns with your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you pay taxes on contributions now, so you can withdraw tax-free later—a wise move if you expect your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, allowing you to keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to grow.
- State-Specific Incentives: Based on your location, you may be eligible for state-specific tax breaks as a business owner. These state-level incentives make these plans even more advantageous.
- 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 they contribute a retirement plan, further reducing 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 about how you invest:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and other assets can help minimize exposure to risk while helping to grow your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund ensures you don’t tapping into your nest egg during challenging periods and risking extra costs.
Plan for the Future of Your Long Beach, CA Business
Retirement planning enables you to plan ahead for what’s next with your Long Beach, CA business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain yours and won’t be included in the sale. These plans ensure the reliable income you’ll need during retirement. Keep in mind that while selling a business often leads to a capital gain, contributions to retirement accounts are restricted by contribution limits (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you’ll owe when you pass on your business.
- Succession Planning: If you’re passing the business on, your retirement savings provide financial security through the transition. You may also work with 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, cut down your tax obligations, and create a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Long Beach, CA Now?
There’s no denying that time is one of the most valuable factors when it comes to saving for retirement. Starting early not only lets you accumulate a bigger financial cushion but also minimizes the financial burden of saving aggressively in the future. This is 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 reach retirement age. The main reason is compound interest—the financial principle where your investments generate earnings, and those returns, in turn, earn even more returns. The greater time span your money has to grow, the larger the effect of compounding.
Example: Two individuals, Alex and Taylor 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 waits until age 40 but puts away $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and ends up with $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 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 end up with $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 gap of over $260,000, just from a 10-year delay.
Saving early, the lower your annual savings needs each year to achieve your retirement goals.
*These calculations are estimates calculated using NerdWallet’s Compound Interest Calculator, assuming 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. Outcomes may change due to factors such as market conditions, fees, and personal factors. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Long Beach, CA, it is often the case that you focus more on reinvesting in your business instead of saving for retirement. Even so, beginning a plan now enables you to:
- Leverage tax-free future growth or penalty-free withdrawals in the future.
- Take advantage of adjustable savings that align with your cash flow.
- Build a long-term safety measure that ensures stability, no matter how your business develops.
Getting started now, the less you’ll need to worry about playing catch-up later in life. Taking steps toward your retirement goals today means managing your financial future and allowing yourself the ability to focus on your goals—both for your future retirement and your Long Beach, CA business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for self-employed individuals in Long Beach, CA, each with its own advantages and considerations. A financial advisor will guide you to evaluate the pros and cons of each choice and determine the one best suited for your unique situation. Generally speaking, your self-employed retirement plan options in Long Beach, CA consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include distinct tax benefits. In a standard IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but retirement distributions are subject to income tax. In contrast, Roth IRAs require contributions are made with after-tax income, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both cases, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, 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 offers a way to save for retirement that allows those who are self-employed to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) cannot make additional contributions more than the 25% you (the employer) have designated. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. It's your choice whether to contribute a flat-dollar amount or a percentage of wages to employee accounts. SEP IRAs may be ideal for companies with cycles of high revenue and low revenue. Unlike other plans, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs operate like conventional IRAs, where contributions are made with pre-tax money and retirement distributions are taxable.
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
- $70,000 for 2025
For self-employed individuals, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed designed for businesses with no employees or when the sole employee is your spouse. These plans operate much like employer-sponsored 401(k) plans, and allow you to contribute as both an employee or an employer with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the extra savings options can be balanced 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 are eligible to open 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:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, up to the annual contribution limit. The contribution limits for 2025 include $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 self-employment income, which is your net profit minus half of your self-employment tax and the elective deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (in 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that provides a fixed, predetermined benefit to business owners upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but allows self-employed individuals to know the precise amount they'll have in retirement. This plan is recommended for wealthier entrepreneurs who aim to accumulate a substantial amount for retirement and can commit to making sizeable contributions. Contributions offer tax-deferred growth, and withdrawals are taxable as income upon retirement.
Eligibility: Self-employed professionals running an owner-only business or with a small staff of under five can open an individual defined benefit plan, but it's most commonly recommended for individuals aged 50+ who make $250,000 or more annually. In most cases, good candidates for defined benefit plans are:
- Business owners or partners who want to invest more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% and are willing to do more
- Organizations that have demonstrated consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions is calculated by an actuary determined by your earnings, age, and retirement objectives. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Long Beach, CA for Your Self-Employed Retirement Plan
Partnering with an advisor in Long Beach, CA focused on self-employed retirement strategies can be an invaluable resource for those working for themselves. They have the expertise to help understand the intricacies of saving for retirement and design a customized plan that reflects your aspirations. Your advisor in Long Beach, CA will assess where you stand financially, identify your risk preferences, and assist you in selecting the best options about saving and investing for retirement. A key part of what we do for you includes:
- Assist in selecting a plan that best fits your needs and goals
- Further adapt the plan to fit you personally even further
- Adopt a written plan 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
- Deliver continuous support and financial insights as you continue on the road to retirement
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Long Beach, CA: Correct Capital's Process
Long Beach, CA business owners who lack the time, interest, or knowledge to manage their retirement savings strategy themselves can become overwhelmed by their options. Through our team at Correct Capital, our Long Beach, CA financial advisors manage the bulk of your retirement planning for you, to help make meeting your financial objectives as hassle-free as possible for you. We are here to assist you in setting up 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 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 obligation or extensive time commitment on your part.
- Gather Information: Should we agree to proceed, 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 designed just for you.
- Review Your Plan: When we finalize a plan using the information you provide, we'll sit down with you and discuss your plan in detail to help you fully grasp it and show how it aligns with your goals.
- Implementation and Monitoring: After we agree on your plan, we'll implement the necessary steps so you can start saving. Throughout our relationship, we'll have regular meetings and track your progress to keep it tailored to your evolving circumstances.
Our Long Beach, CA financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Long Beach, CA include:
- 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
- High-Net-Worth Wealth Management
Call Correct Capital for Your Self-Employed Retirement Plan in Long Beach, CA
You don't see your business as "just a business", and your Long Beach, CA financial advisors must deliver more than just good financial guidance. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to create tailored self-employed retirement plans. To every client in Long Beach, CA, we provide 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, call Correct Capital today at 877-930-401k or contact us online.
