Self-employed retirement plans Lubbock, TX. The freedom of being your own boss in Lubbock, TX is one of the greatest advantages of working for yourself. However, this independence often comes with a lack of security, notably in terms of planning for retirement, since you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off exploring their options. In addition to having a financially stable retirement, working with a financial advisor in Lubbock, TX to establish your self-employed retirement plan can provide significant tax advantages that allow your business to grow and succeed.
Few Lubbock, TX financial advisory and retirement planning firms are as attuned to the requirements of entrepreneurs quite like 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 our firm have a rich history of assisting business owners in their retirement planning needs. We understand that your professional and personal aspirations extend well past simple financial figures, and we strive to provide tailored solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Lubbock, TX, or call Correct Capital at 877-930-401k or contact us online to talk to a small business financial advisor in Lubbock, TX today.
Why Lubbock, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver real benefits today. With customizable contribution options to substantial tax savings, working with a financial advisor in Lubbock, TX enables you to create your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) offers the option to tailor how much you save:
- Customizable Contributions: Set aside more during high-income years and reduce savings when income is lower, ensuring your plan fits your current income.
- Roth Options: Choosing a Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw without tax penalties in the future—an advantageous choice if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, which gives your money more time to accumulate.
- State-Specific Incentives: Based on your location, you may be eligible for extra tax breaks as a business owner. These local incentives make these plans even more advantageous.
- 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
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 still growing your nest egg.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business prevents you from tapping into your nest egg during tough times and facing tax penalties.
Plan for the Future of Your Lubbock, TX Business
A thoughtful retirement strategy also helps you prepare for what’s next with your Lubbock, TX business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain your personal assets and don’t transfer with the business. These accounts ensure the reliable income you’ll need in the future. It’s important to note that while the sale of a business usually creates a capital gain, deposits into these plans are subject to yearly maximums (e.g., up to $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 helps lower the taxes you’ll owe when you sell your business.
- Succession Planning: If you’re passing the business on, your nest egg provide financial security through the transition. You may also work with a financial advisor who specializes in succession planning and retirement accounts to reduce taxes during the sale.
With the best-fit retirement strategy, you manage your financial future, reduce your tax burden, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Lubbock, TX Now?
There’s no denying that time is one of the most valuable factors in retirement planning. Getting a head start not only allows you to build a larger nest egg but also reduces the pressure of playing catch-up as you get older. This is why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement could lead to a substantial impact on the total you’ll have when you stop working. The biggest reason is compound interest—the powerful process where your investments earn returns, and those returns, subsequently, earn even more returns. The more time your money has to grow, the greater the impact of this growth.
Example: Two individuals, Alex and Taylor are both self-employed professionals. Both of them want to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor delays savings until age 40 but contributes $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently can lead to significant growth. Consider this example showing the impact of compound interest:
- 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: Contributing the same $200 per month would result in only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
The earlier you begin, the less effort required each year to meet your retirement goals.
*These calculations represent 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. The scenarios provided are intended as illustrative examples and are not a promise of future results. Your individual results may differ based on variables including market conditions, fees, and personal factors. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in Lubbock, TX, it might seem easier to prioritize reinvesting in your business over saving for retirement. Even so, beginning a plan now gives you the chance to:
- Leverage growth that is tax-deferred or tax-free withdrawals in the future.
- Benefit from contribution flexibility that align with your cash flow.
- Build a long-term safety measure that provides security, no matter how your business develops.
Starting early, the less you’ll have to worry about making up for lost time later in life. Building your retirement savings today means managing your financial future and allowing yourself the freedom to focus on your dreams—both for your future retirement and your Lubbock, TX business.
Types of Self-Employed Retirement Plans
There are several retirement savings options available for self-employed individuals in Lubbock, TX, each providing its own benefits and trade-offs. A financial advisor will guide you to evaluate the pros and cons of each choice and determine the one most suitable for your needs. Generally speaking, your self-employed retirement plan options in Lubbock, TX consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that provide distinct tax benefits. In a traditional IRA, contributions are typically tax-deductible, and returns grow free of current taxes, but money taken out during retirement are taxed as income. In contrast, Roth IRAs require contributions are made with after-tax income, but qualified withdrawals in retirement, including earnings, are not taxed. In both cases, withdrawals come without penalties if you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, both traditional and Roth IRAs are open to those with an earned income.
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 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 independent business owner, you (the employee) cannot make additional contributions above the 25% you (the employer) already contributed. If you have employees, it's required 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. This type of plan is a good option for businesses that experience periods of inconsistent earnings. Unlike other plans, SEP IRAs are free of costly startup or administrative fees.
SEPs work like conventional IRAs, where contributions are made with pre-tax money and money withdrawn is subject to income tax.
Eligibility: Both employers and self-employed individuals can establish 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 allowable contribution 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 meant for businesses with no employees or if the only employee is your spouse. These plans are similar to traditional employer-managed 401(k) plans, and enable contributions as both an employee or an employer with pre-tax money. This offers more savings versus 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 offer the same tax benefits as their IRA contribution counterparts.
Eligibility: Solo 401(k)s are available solely to business owners and their spouses can set up and contribute to a solo 401(k).
Contribution Limits: For self-employed individuals with a solo 401(k) plan, you are allowed to make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (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.
Total contributions are capped at $70,000, or $77,500 for those aged 50 and older (as of 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan is a retirement option that guarantees a set amount to entrepreneurs upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but allows self-employed individuals to know the precise amount they'll have in retirement. This option is ideal for wealthier entrepreneurs who are focused on saving a significant sum for retirement and are prepared to contribute sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income in retirement.
Eligibility: Entrepreneurs managing a one-person company or with a small staff of under five can open an individual defined benefit plan, but it's most commonly advised for individuals aged 50+ who make $250,000 or more annually. In most cases, good candidates for defined benefit plans include:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% with plans to contribute more
- Businesses showing consistent profit patterns
- Entrepreneurs over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions requires calculation from an actuary determined by your financial situation, age, and savings targets. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Lubbock, TX for Your Self-Employed Retirement Plan
Working with a financial advisor in Lubbock, TX specialized in self-employed retirement plans is an important asset for entrepreneurs. They offer the knowledge to assist guide you through the challenges of retirement planning and develop a customized plan that matches your objectives. Your advisor in Lubbock, TX will evaluate your financial situation, understand your risk tolerance, and assist you in choosing wisely about saving and investing for retirement. Included in what we do for you involves:
- Assist in selecting a plan that best fits your needs and goals
- Tailor the plan to your needs even further
- Adopt a written plan as required by IRS rules
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan when necessary
- 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 Lubbock, TX: Correct Capital's Process
Self-employed individuals in Lubbock, TX who lack the time, interest, or knowledge to manage their own retirement planning on their own often feel overwhelmed when faced with their available plans. At Correct Capital, our Lubbock, TX financial advisors manage the bulk of your retirement strategy for you, to help make meeting your retirement goals as hassle-free as possible for you. We can help you get set up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: In just 20 minutes, a member of our advisor team will assess if we're a good fit for you and your business. This brief introduction helps us get a sense of your goals with no pressure or extensive time commitment on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including how many employees you have (if any), your current financial situation, and your retirement goals. This enables us to craft a personalized strategy designed just for you.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll sit down with you and review your plan in detail to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can start saving. As time goes on, we'll have regular meetings and monitor your plan to make sure it remains aligned with your goals.
Our Lubbock, TX financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Lubbock, TX include:
- Comprehensive Financial Planning
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
Call Correct Capital for Your Self-Employed Retirement Plan in Lubbock, TX
Your business isn't "just a business" to you, and your Lubbock, TX financial advisors need to offer more than just good financial guidance. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to deliver personalized self-employed retirement plans. To every client in Lubbock, TX, we provide our I.O.U. promise: everything we recommend 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.
