Self-employed retirement plans Mesa, AZ. The independence of owning your own business in Mesa, AZ offers many benefits of having a self-directed career. However, this freedom sometimes brings with a lack of security, particularly in terms of building your retirement fund, because you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off understanding their retirement options. In addition to enjoying a more comfortable retirement, partnering with a financial advisor in Mesa, AZ to set up your self-employed retirement plan offers significant tax advantages that help both you and your business to thrive.
Few Mesa, AZ financial advisory and retirement planning firms truly grasp the challenges faced by small business owners better than 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 know that your professional and personal aspirations extend well past basic numbers, and we work tirelessly to offer customized solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Mesa, AZ, or call Correct Capital at 877-930-401k or contact us online to talk to a entrepreneurial financial advisor in Mesa, AZ today.
Why Mesa, AZ Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also provide immediate benefits today. Offering flexibility in contributions to considerable tax savings, working with a financial advisor in Mesa, AZ allows you to customize your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to tailor how much you save:
- Customizable Contributions: Save extra during successful years and scale back when your earnings dip, so that your plan works with your current income.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw your savings tax-free down the road—a wise move if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer significant 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: Investments grow tax-free until withdrawal, providing your money more time to accumulate.
- State-Specific Incentives: Based on your location, you may be eligible for state-specific tax breaks as a self-employed individual. These state-level incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax credit of up to 50% of the first $2,000 contributed a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future isn’t only about how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Spreading your investments across varied asset classes like stocks and bonds can help mitigate financial risk while still growing your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund prevents you from tapping into your nest egg during challenging periods and facing tax penalties.
Plan for the Future of Your Mesa, AZ Business
Retirement planning enables you to plan ahead for what’s next with your Mesa, AZ business:
- Selling Your Business: If you’re planning to sell, plans like SEP IRAs or Solo 401(k)s remain yours and don’t transfer with the business. These accounts can provide the steady 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., a maximum of $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, factoring in catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions helps lower the taxes you’ll owe when you pass on your business.
- Succession Planning: If you’re passing the business on, your nest egg provide a stable foundation through the transition. You can also seek advice from a financial advisor experienced in both succession and retirement strategies to reduce taxes during the sale.
With the right retirement plan, you can take control of your financial future, reduce your tax burden, and build a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Mesa, AZ Now?
Time is one of the most valuable factors in retirement planning. Beginning sooner rather than later not only allows you to build a bigger financial cushion but also minimizes the pressure of catching up later in life. The following are reasons why it is beneficial to start now:
The Cost of Waiting
Waiting to start your retirement fund may cause a significant impact on the total you’ll have when you retire. The biggest reason is compound interest—the powerful process where your investments earn returns, and those returns, subsequently, earn even more returns. The greater time span your money has to grow, the larger the effect of compounding.
Example: Taylor and Alex are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but contributes $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments invested steadily may result in substantial growth. Here’s a simple scenario showing the effect of compounding:
- Starting at age 25: Putting aside $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 yields only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
Saving early, the less you need to save each year to meet your retirement goals.
*The figures provided in this example 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. These examples are intended as illustrative examples and are not a promise of future results. Your individual results may differ depending on variables including 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
If you’re self-employed in Mesa, AZ, it is often the case that you prioritize reinvesting in your business instead of saving for retirement. That said, initiating a plan now gives you the chance to:
- Take advantage of tax-free future growth or withdrawals without taxes down the road.
- Take advantage of contribution flexibility that adapt to your earnings.
- Establish a financial cushion that offers peace of mind, no matter how your business develops.
Getting started now, the less you’ll have to worry about making up for lost time later in life. Saving for retirement now means managing your financial future and allowing yourself the freedom to concentrate on your goals—both for your future retirement and your Mesa, AZ business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for self-employed individuals in Mesa, AZ, each offering its own pros and cons. A financial advisor is available to help you understand the pros and cons of each choice and identify the one best suited for your circumstances. In most cases, your self-employed retirement plan options in Mesa, AZ include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that provide specific tax advantages. In a standard IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but withdrawals in retirement are subject to income tax. In contrast, Roth IRA contributions using income already taxed, but retirement withdrawals that qualify, including earnings, are not taxed. In both types of accounts, withdrawals are penalty-free if you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are accessible for individuals with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA serves as a retirement savings option that permits entrepreneurs to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a independent business owner, you (the employee) cannot make additional contributions beyond the 25% you (the employer) allocate. If you have employees, you must contribute the same amount for them as you do for yourself. It's your choice whether to contribute a set monetary value or a percentage of wages to employee accounts. SEP IRAs may be ideal for companies with fluctuating revenue streams. Compared to other retirement options, SEP IRAs don’t have costly startup or administrative fees.
SEPs function like traditional IRAs, where you contribute pre-tax dollars 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
As a self-employed person, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed intended for businesses without employees or where the only employee is a spouse. This type of plan operate much like 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 extra savings options often come with more restricted investment choices. Using a solo 401(k), you can make either traditional or Roth deferrals, which share the same tax benefits as their IRA contribution counterparts.
Eligibility: This plan is exclusively for 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 have the ability to make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employment income, up to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your adjusted self-employment income, which is calculated as net profits less half of your self-employment tax and the elective deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 if you're over age 50 (as of 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 delivers a pre-established payout to business owners upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but enables participants to determine exactly how much they'll have in retirement. This option is ideal for higher-income self-employed individuals who aim to accumulate a significant sum for retirement and are prepared to contribute larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxed as income during retirement.
Eligibility: Entrepreneurs running an owner-only business or with less than five employees may establish an individual defined benefit plan, but it's generally advised for individuals aged 50+ who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans are:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% and are willing to do more
- Businesses showing 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 based on your earnings, age, and retirement objectives. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Mesa, AZ for Your Self-Employed Retirement Plan
A financial advisor in Mesa, AZ experienced with retirement plans for the self-employed is an important asset for entrepreneurs. They offer the knowledge to assist navigate the complexities of retirement planning and craft a customized plan that matches your objectives. Your advisor in Mesa, AZ will review your finances, determine how much risk you’re comfortable with, and guide you in choosing wisely about saving and investing for retirement. A key part of what we do for you includes:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Further adapt the plan to fit you personally even further
- Formalize a plan in writing as required by IRS rules
- Organize a trust plan to manage your assets
- Help you understand 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 optimizing your social security benefits
Self-Employed Retirement Plans in Mesa, AZ: Correct Capital's Process
Self-employed individuals in Mesa, AZ who lack the time, interest, or knowledge to handle their retirement savings strategy themselves may end up overwhelmed as they look at their options. Through our team at Correct Capital, our Mesa, AZ financial advisors handle the lion's share of your savings plan setup for you, and strive to ensure meeting your future savings targets as straightforward 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 short conversation helps us learn about your needs with zero commitment or extensive time commitment on your part.
- Gather Information: Should we agree to proceed, we'll ask for information, including your employee count, your current financial situation, and your future objectives. This helps us create a custom plan designed just for you.
- Review Your Plan: When we finalize a plan from the information you provide, we'll meet 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 implement the necessary steps so you can begin contributing. Throughout our relationship, we'll check in and track your progress to ensure it stays suited to your needs.
Our Mesa, AZ financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are committed by law and ethics to act in your best interest.
Other financial advisory services we offer in Mesa, AZ include:
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 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 Mesa, AZ
To you, your business is more than "just a business", and your Mesa, AZ financial advisors should provide more than simply sound financial advice. At Correct Capital, we focus on building a relationship with our clients and their businesses to create customized self-employed retirement plans. We offer all our Mesa, AZ clients 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.
