Self-employed retirement plans Mesquite, TX. The independence of being your own boss in Mesquite, TX is one of the best aspects of having a self-directed career. That said, this independence can come with certain challenges, particularly in terms of building your retirement fund, because you don't have access to a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from looking into other possibilities. In addition to enjoying a financially stable retirement, partnering with a financial advisor in Mesquite, TX to create your self-employed retirement plan offers significant tax advantages that enable both you and your business to thrive.
Few Mesquite, TX financial advisory and retirement planning firms understand the needs of small business owners as well as Correct Capital. The father of our founder was a small business owner himself (check out our story here), and Correct Capital take pride in helping businesses with their retirement planning needs. We understand that your professional and personal aspirations aren’t limited to just monetary concerns, and we are dedicated to create personalized solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Mesquite, TX, or call Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Mesquite, TX today.
Why Mesquite, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also offer tangible benefits today. With customizable contribution options to considerable tax savings, partnering with a financial advisor in Mesquite, TX allows you to design your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
When your earnings vary from year to year, a plan like a SEP IRA or Solo 401(k) provides the freedom to adjust how much you save:
- Customizable Contributions: Contribute more during profitable years and scale back when revenues are down, ensuring your plan works with your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw your savings tax-free down the road—a wise move if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, allowing you to 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: In some states, you could qualify for state-specific credits as a business owner. These regional incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can take advantage of a 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 requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Distributing your investments across varied stocks, bonds, and other assets is a smart way to reduce risk while still growing your savings.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund ensures you don’t using your retirement funds during financial hardships and incurring penalties.
Plan for the Future of Your Mesquite, TX Business
Retirement planning enables you to plan ahead for what’s next with your Mesquite, TX business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and won’t be included in the sale. These savings offer the steady income you’ll need later on. Remember that while the sale of a business usually creates a capital gain, deposits into these plans are subject to yearly maximums (e.g., as much as $7,000 for IRAs or up to $70,000 for Solo 401(k)s, with catch-up contributions, based on plan compensation).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you are required to pay when you transfer your business.
- Succession Planning: If you’re passing the business on, your nest egg ensure financial security as you make this shift. You might want to seek advice from a financial advisor who specializes in succession planning and retirement accounts to reduce taxes on the sale.
With the right retirement plan, you manage your financial future, reduce your tax burden, and build a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Mesquite, TX Now?
Time is one of the most valuable factors for building your retirement fund. Starting early not only lets you accumulate a more substantial retirement fund 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 may cause a significant impact on the amount you’ll have when you reach retirement age. The main reason is compound interest—the financial principle where your investments earn returns, and those returns, in turn, earn even more returns. The more time your money has to grow, the greater the effect of this compounding process.
Example: Taylor and Alex are both self-employed professionals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor delays savings until age 40 but contributes $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and ends up with $691,184.39*.
- Taylor contributes $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently can lead to impressive growth. Consider this example showing the effect of compound interest:
- Starting at age 25: By investing $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll grow to approximately $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 less effort required each year to achieve your retirement goals.
*These calculations are estimates derived from NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is intended as illustrative examples and do not guarantee future performance. Actual results may vary based on variables including market conditions, fees, and your unique situation. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Mesquite, TX, it can be tempting to prioritize reinvesting in your business rather than saving for retirement. However, initiating a plan now enables you to:
- Take advantage of tax-free future growth or withdrawals without taxes in the future.
- Benefit from flexible contributions that change with your earnings.
- Build a safety net that offers peace of mind, no matter how your business evolves.
Getting started now, the less you’ll have to worry about catching up later in life. Saving for retirement now means taking control of your financial future and giving yourself the opportunity to concentrate on your objectives—both for your golden years and your Mesquite, TX business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for those working for themselves in Mesquite, TX, each with its own benefits and trade-offs. A financial advisor is available to help you evaluate the pros and cons of each choice and choose the one most suitable for your unique situation. Generally speaking, your self-employed retirement plan options in Mesquite, TX are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that include key tax perks. In a conventional IRA, you can usually deduct your contributions from taxable income, and returns grow free of current taxes, but retirement distributions are subject to income tax. In contrast, with Roth IRAs, you contribute are made with after-tax income, but eligible distributions during retirement, including earnings, are exempt from taxes. In both cases, withdrawals come without penalties as long as you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are available to anyone with taxable earnings.
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: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that enables entrepreneurs to set aside a portion of their self-employment income. Contributions are strictly employer contributions an employer, so, as a sole proprietor, you (the employee) cannot make additional contributions more than the 25% you (the employer) allocate. 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 set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for businesses that experience periods of inconsistent earnings. Unlike other plans, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs work like standard IRAs, where the contributions are tax-deferred and withdrawals are taxed as income.
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
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 with no employees or if the only employee is your spouse. This type of plan function similarly to standard 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This provides more savings versus SEPs or IRAs; however, the extra savings options often come with more limited investment options. 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 are eligible to open 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 earned income from self-employment, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you're over 50, or $34,750 if you attain age 60-63 in 2025.
- Contributions as an employer (as an employer) cannot exceed 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.
Total contributions are capped at $70,000, or $77,500 if you're over age 50 (for 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 provides a fixed, predetermined benefit to entrepreneurs 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 get in retirement. This strategy is ideal for higher-income self-employed individuals who are focused on saving a substantial amount for retirement and can commit to making sizeable contributions. Contributions are tax deferred, and withdrawals are taxable as income in retirement.
Eligibility: Self-employed professionals operating a solo business or employing fewer than five people are eligible to open an individual defined benefit plan, but it's typically advised for people above age 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans include:
- Partners or owners who want to invest more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% but are open to increasing contributions
- Businesses that have demonstrated consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions must be determined by an actuary determined by your financial situation, age, and savings targets. Limits on contributions change annually.
The Importance of a Financial Advisor in Mesquite, TX for Your Self-Employed Retirement Plan
Working with a financial advisor in Mesquite, TX experienced with retirement plans for the self-employed is an important asset for self-employed individuals. They have the expertise to help guide you through the challenges of retirement planning and craft a tailored strategy that matches your objectives. Your advisor in Mesquite, TX will assess where you stand financially, identify your risk preferences, and help you in choosing wisely about saving and investing for retirement. Part of what we do for you features:
- Guide you in choosing a plan that suits your unique requirements
- Tailor the plan to your specific situation even further
- Create a written plan in accordance with IRS guidelines
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Track and fine-tune 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 Mesquite, TX: Correct Capital's Process
Entrepreneurs in Mesquite, TX who aren’t equipped with the time or understanding to manage their retirement savings strategy on their own may end up overwhelmed when faced with their choices. At Correct Capital, our Mesquite, TX financial advisors handle the bulk of your retirement strategy for you, working to make meeting your financial objectives as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- 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 understand what you're looking for with zero commitment or extensive time commitment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including your employee count, your current financial situation, and your retirement goals. This helps us create a custom plan designed just for you.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll meet with you and review your plan thoroughly to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can start saving. As time goes on, we'll check in and track your progress to keep it tailored to your evolving circumstances.
Our Mesquite, TX financial advisors and retirement plan consultants serve as fiduciary advisors, who are obligated to they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in Mesquite, TX include:
- 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 Mesquite, TX
Your business isn't "just a business" to you, and your Mesquite, TX financial advisors should provide more than just good financial guidance. At Correct Capital, we focus on building a relationship with our clients and their businesses to provide customized self-employed retirement plans. We offer all our Mesquite, TX clients our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To get started on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
