Self-employed retirement plans Mesa, AZ. The freedom of being your own boss in Mesa, AZ is one of the greatest advantages of working for yourself. That said, this independence sometimes brings with a lack of security, especially regarding planning for retirement, as you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from looking into other possibilities. In addition to enjoying a more comfortable retirement, partnering with a financial advisor in Mesa, AZ to set up your self-employed retirement plan delivers significant tax advantages that enable your business to grow and succeed.
Few Mesa, AZ investment consulting and retirement planning firms are as attuned to the requirements of entrepreneurs as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (learn more about our story here), and Correct Capital are deeply experienced in supporting entrepreneurs with their retirement planning needs. We understand that your professional and personal aspirations aren’t limited to basic numbers, and we strive to provide tailored solutions that reflect your objectives. Continue exploring to find out about your self-employed retirement plan options in Mesa, AZ, or call Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Mesa, AZ today.
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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 real benefits today. With customizable contribution options to considerable tax savings, working with a financial advisor in Mesa, AZ helps you customize your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) provides the freedom to tailor how much you save:
- Customizable Contributions: Save extra during successful years and scale back when your earnings dip, ensuring 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 without tax penalties in the future—a smart decision if you expect your tax rate will increase in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you may be eligible for extra tax breaks as a sole proprietor. These local incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can claim a tax credit of up to 50% of the first $2,000 contributed a retirement plan, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure retirement isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across varied stocks, bonds, and other assets is a smart way to reduce risk while continuing to build your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net ensures you don’t tapping into your nest egg during financial hardships 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: 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 can provide the steady income you’ll need during retirement. Remember that while the sale of a business usually creates a capital gain, deposits into these plans are capped at annual limits (e.g., a maximum of $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 are required to pay when you transfer your business.
- Succession Planning: If you’re passing the business on, your retirement savings offer the funds you need through the transition. You can also work with a financial advisor who specializes in succession planning and retirement accounts to help with taxes associated with the transaction.
With the right retirement plan, you gain control over your financial future, lower your tax bill, and establish a secure foundation 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 when it comes to saving for retirement. Getting a head start not only helps you grow a more substantial retirement fund but also minimizes the financial burden of catching up later in life. Here’s why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings can have a substantial impact on the savings you’ll have when you retire. The primary reason is compound interest—the concept where your investments generate earnings, and those returns, in turn, accumulate even more returns. The greater time span your money has to grow, the more significant the impact of compounding.
Example: Alex and Taylor are both self-employed professionals. Their shared goal is 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 puts away $7,500 annually to make up for lost time.
By age 65, with an assumption of 7% annual return:
- Alex invests $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently often create impressive growth. Take a look at this scenario showing the power of compound interest:
- 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: Contributing the same $200 per month yields only $235,412.97* by age 65—a shortfall of over $260,000, just from a 10-year delay.
Starting sooner, the lower your annual savings needs each year to meet your retirement goals.
*The numbers shown in this scenario are based on estimates generated with NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. 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 personal factors. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in Mesa, AZ, it can be tempting to put more emphasis on reinvesting in your business over saving for retirement. That said, initiating a plan now allows you to:
- Leverage tax-deferred growth or penalty-free withdrawals in the future.
- Take advantage of adjustable savings that change with your cash flow.
- Create a financial cushion that provides security, no matter how your business changes.
The sooner you start, the less you’ll need to worry about playing catch-up later in life. Saving for retirement now means gaining control over your financial future and giving yourself the opportunity to turn your attention to your dreams—both for your future retirement and your Mesa, AZ business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for entrepreneurs in Mesa, AZ, each providing its own benefits and trade-offs. A financial advisor can help you learn about the pros and cons of each plan and identify the one most suitable for your circumstances. In most cases, your self-employed retirement plan options in Mesa, AZ are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that provide specific tax advantages. In a traditional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but money taken out during retirement are taxed as income. In contrast, with Roth IRAs, you contribute from post-tax earnings, but eligible distributions during retirement, including earnings, are tax-free. In both types of accounts, withdrawals don’t incur penalties provided you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are available to anyone 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 offers a way to save for retirement that enables those who are self-employed to set aside a portion of their self-employment income. Contributions are strictly employer contributions 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, it's required to contribute the same amount for them as you do for yourself. You may choose to contribute a flat-dollar amount or a percentage of wages to employee accounts. SEP IRAs is a good option for entrepreneurs facing cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs don’t have costly startup or administrative fees.
SEPs operate like traditional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Employers of any type, including 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
For self-employed individuals, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed designed for companies that have no employees or where the only employee is a spouse. These plans function similarly to employer-sponsored 401(k) plans, and allow you to contribute 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 constrained investment avenues. 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: 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: If you are self-employed 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 earned income from self-employment, subject to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 for those who turn 60-63 in 2025.
- Contributions as an employer (as an employer) must not surpass 25% of your net earnings from self-employment, which is calculated as net profits less 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 (in 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that delivers a fixed, predetermined benefit to business owners upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but enables participants to determine the precise amount they'll receive in retirement. This option is best suited for high-earning entrepreneurs who aim to accumulate a large amount for retirement and are prepared to contribute sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income during retirement.
Eligibility: Any self-employed individual operating a solo business or employing fewer than five people can open an individual defined benefit plan, but it's typically advised for those over 50 who make $250,000 or more annually. In most cases, good candidates for defined benefit plans include:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% and are willing to do more
- Organizations that have demonstrated consistent profit patterns
- Business leaders over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The cap on contributions 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 Mesa, AZ for Your Self-Employed Retirement Plan
Partnering with an advisor in Mesa, AZ experienced with retirement plans for the self-employed serves as an essential partner for entrepreneurs. They have the expertise to help guide you through the challenges of retirement planning and design a personalized approach that aligns with your goals. An expert in your area will evaluate your financial situation, determine how much risk you’re comfortable with, and guide you in making informed decisions about saving and investing for retirement. A key part of what we do for you includes:
- Help you choose a plan that best fits your needs and goals
- Tailor the plan to your specific situation even further
- Adopt a written plan in accordance with IRS guidelines
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan as needed
- Offer continued financial education and guidance to help you navigate your retirement journey
- 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 self-employed retirement plan on their own can become overwhelmed when faced with their options. At Correct Capital, our Mesa, AZ financial advisors take on the bulk of your retirement strategy for you, to help make meeting your financial objectives as straightforward 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 will assess if we're suited to your needs for you and your business. This brief introduction helps us learn about your needs with zero commitment or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll request information, including your employee count, your existing financial picture, and your future objectives. This enables us to craft a personalized strategy suited specifically for your needs.
- Review Your Plan: When we finalize a plan using the information you provide, we'll sit down with you and review your plan thoroughly to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can start saving. 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 serve as fiduciary advisors, which means they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Mesa, AZ 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 Mesa, AZ
You don't see your business as "just a business", and your Mesa, AZ financial advisors need to offer more than just good financial guidance. At Correct Capital, we focus on building a relationship with our clients and their businesses to create tailored 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 begin on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
