Self-employed retirement plans Mesa, AZ. The freedom of running your own company in Mesa, AZ is one of the best aspects of being self-employed. Even so, this independence can come with certain challenges, particularly regarding planning for retirement, as you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, yet countless should consider exploring their options. In addition to achieving a financially stable retirement, seeking advice from a financial advisor in Mesa, AZ to create your self-employed retirement plan delivers significant tax advantages that enable both you and your business to thrive.
Few Mesa, AZ financial advisory and retirement planning firms understand the needs of small business owners quite like Correct Capital. The father of our founder was a small business owner himself (check out our story here), and our firm are deeply experienced in helping businesses with their retirement planning needs. We understand that your goals for your business and retirement aren’t limited to basic numbers, and we strive to offer tailored solutions to meet your unique goals. Continue exploring to find out about your self-employed retirement plan options in Mesa, AZ, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Mesa, AZ today.
Why Mesa, AZ Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also deliver real benefits today. From flexible contributions to significant tax savings, consulting a financial advisor in Mesa, AZ enables you to design your retirement plan to align with your individual circumstances.
Flexibility That Fits Your Income
If your income changes annually, a plan like a SEP IRA or Solo 401(k) provides the flexibility to tailor how much you save:
- Customizable Contributions: Save extra during profitable years and scale back when income is lower, ensuring your plan works with your cash flow.
- Roth Options: Opting for a Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw without tax penalties in the future—a smart decision if you expect your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, so you can keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to compound.
- State-Specific Incentives: Based on your location, you could qualify for state-specific deductions as a business owner. These state-level incentives help make these plans even more valuable.
- 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, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future goes beyond just how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Allocating your investments across varied stocks, bonds, and alternatives can help minimize exposure to risk while still growing your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net prevents you from using your retirement funds during tough times and incurring penalties.
Plan for the Future of Your Mesa, AZ Business
A thoughtful retirement strategy also helps you prepare for what’s next with your Mesa, AZ business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain yours and don’t transfer with the business. These savings ensure the steady income you’ll need in the future. It’s important to note that while selling a business often leads to a capital gain, contributions to retirement accounts are capped at annual limits (e.g., a maximum of $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: Making the most of retirement savings helps lower the taxes you are required to pay when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg ensure the funds you need through the transition. You might want to work with a financial advisor with expertise in succession and retirement planning to reduce taxes on the sale.
With the right retirement plan, you can take control of your financial future, lower your tax bill, and create a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Mesa, AZ Now?
Time remains one of the most crucial factors when it comes to saving for retirement. Beginning sooner rather than later not only allows you to build a bigger financial cushion but also minimizes the pressure of playing catch-up as you get older. This is why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement could lead to a substantial impact on the amount you’ll have when you retire. The main reason is compound interest—the financial principle where your investments earn returns, and those returns, subsequently, accumulate even more returns. The greater time span your money has to grow, the greater the benefit of this growth.
Example: Two individuals, 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 delays savings until age 40 but saves $7,500 annually to catch up.
By age 65, using a projected 7% annual return:
- Alex puts in $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
Regular, modest investments invested steadily 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 expected yearly growth rate of 7%, you’ll end up with $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 gap of over $260,000, simply due to a 10-year delay.
Starting sooner, the less effort required each year to meet your retirement goals.
*The figures provided in this example are based on estimates derived from NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. These examples are meant to provide general guidance 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 custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Mesa, AZ, it is often the case that you put more emphasis on reinvesting in your business over saving for retirement. However, starting a plan now gives you the chance to:
- Leverage growth that is tax-deferred or tax-free withdrawals in the future.
- Take advantage of adjustable savings that change with your cash flow.
- Establish a safety net that offers peace of mind, no matter how your business evolves.
The sooner you start, the less you’ll need to worry about playing catch-up later in life. Building your retirement savings today means taking control of your financial future and creating for yourself the opportunity to focus on your objectives—both for your retirement years and your Mesa, AZ business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for those working for themselves in Mesa, AZ, each offering its own benefits and trade-offs. A financial advisor can help you understand the benefits and drawbacks of each option and choose the one best suited for your needs. Generally speaking, your self-employed retirement plan options in Mesa, AZ consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that offer specific tax advantages. In a traditional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but retirement distributions are taxable. In contrast, Roth IRA contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are exempt from taxes. In both accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, IRAs, including traditional and Roth options are open to those with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA is a retirement plan that enables self-employed individuals to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a sole proprietor, you (the employee) cannot make additional contributions more than 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 set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for companies with cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs work like conventional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are capped at the lower of:
- 25% of compensation, or
- $70,000 for 2025
As a self-employed person, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses without employees or if the only employee is your spouse. Solo 401(k)s operate much like employer-sponsored 401(k) plans, and let you make contributions as both the employer and the employee with pre-tax money. This offers more savings versus SEPs or IRAs; however, the additional opportunities may be offset by more restricted investment choices. Using a solo 401(k), you can make either traditional or Roth deferrals, which have 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:
- Deferrals as an employee of up to 100% of your self-employment income, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 for those who turn 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) must not surpass 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.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (in 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that provides a set amount to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but lets individuals clearly understand what they'll get in retirement. This plan is ideal for higher-income self-employed individuals who want to save a significant sum for retirement and can commit to making larger deposits. Contributions offer tax-deferred growth, and withdrawals incur taxes as income during retirement.
Eligibility: Self-employed professionals running an owner-only business or employing fewer than five people are eligible to open an individual defined benefit plan, but it's generally suggested for people above age 50 who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans include:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% and are willing to do more
- Companies that have demonstrated consistent profit patterns
- Partners or owners 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 based on your earnings, age, and retirement objectives. Limits on contributions 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 can be an essential partner for those working for themselves. They have the expertise to help navigate the complexities of retirement planning and craft a customized plan that matches your objectives. A financial advisor in Mesa, AZ will review your finances, understand your risk tolerance, and guide you in making informed decisions about saving and investing for retirement. Included in what we do for you includes:
- Guide you in choosing a plan that suits your unique requirements
- Further adapt the plan to your specific situation even further
- Adopt a written plan that complies with IRS regulations
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan to keep it aligned with your goals
- Deliver continuous support and financial insights as you continue on the road to retirement
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Mesa, AZ: Correct Capital's Process
Entrepreneurs in Mesa, AZ who aren’t equipped with the time or understanding to manage their self-employed retirement plan independently can become overwhelmed as they look at their available plans. With Correct Capital, our Mesa, AZ financial advisors take on the bulk of your savings plan setup for you, to help make meeting your future savings targets as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can determine if we're a good fit for you and your business. This short conversation helps us get a sense of your goals with zero commitment or extensive time commitment on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including your employee count, your current financial situation, and your future objectives. This enables us to craft a tailored approach designed just for you.
- Review Your Plan: When we finalize a plan based on the information you provide, we'll sit down with you and review your plan in detail to help you fully grasp it and understand how it best correlates to your needs.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can start saving. Throughout our relationship, we'll meet with you and review your strategy to make sure it remains aligned with your goals.
Our Mesa, AZ financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in Mesa, AZ 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 Mesa, AZ
To you, your business is more than "just a business", and your Mesa, AZ financial advisors must deliver more than just good financial guidance. With Correct Capital, we focus on building a relationship with our clients and their businesses to provide personalized 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, contact Correct Capital now at 877-930-401k or contact us online.
