Self-employed retirement plans Mesquite, TX. The freedom of being your own boss in Mesquite, TX offers many benefits of having a self-directed career. However, this flexibility often comes with potential drawbacks, notably when it comes to building your retirement fund, 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 should consider exploring their options. In addition to having a more secure retirement, seeking advice from a financial advisor in Mesquite, TX to set up your self-employed retirement plan offers significant tax advantages that help both you and your business to thrive.
Few Mesquite, TX wealth management and retirement planning firms are as attuned to the requirements 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 Correct Capital take pride in helping businesses with their retirement planning needs. We recognize that your business and retirement aspirations go far beyond basic numbers, and we work tirelessly to create tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Mesquite, TX, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Mesquite, TX today.
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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 provide tangible benefits today. With customizable contribution options to considerable tax savings, consulting a financial advisor in Mesquite, TX allows you to design your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
For those with fluctuating income over time, a plan like a SEP IRA or Solo 401(k) provides the flexibility to tailor how much you save:
- Customizable Contributions: Save extra during successful years and scale back when your earnings dip, so your plan works with your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw tax-free later—an advantageous choice if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Plans designed for the self-employed deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, helping you keep more of your earnings.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to grow.
- State-Specific Incentives: Based on your location, you may be eligible for extra credits as a self-employed individual. These state-level incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can apply for a credit of up to 50% of the first $2,000 put into 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 asset classes like stocks and bonds can help mitigate financial risk while continuing to build your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net prevents you from dipping into savings during challenging periods and risking extra costs.
Plan for the Future of Your Mesquite, TX Business
Retirement planning also helps you think through what’s next with your Mesquite, TX business:
- Selling Your Business: When selling your business, 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 later on. Remember 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, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you are required to pay when you pass on your business.
- Succession Planning: If you’re passing the business on, your retirement savings ensure financial security as you make this shift. You may also 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, cut down your tax obligations, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Mesquite, TX Now?
Time remains one of the most crucial assets in retirement planning. Getting a head start not only helps you grow a larger nest egg but also lowers the financial burden of saving aggressively in the future. Here’s why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement can have a major impact on the total you’ll have when you stop working. The biggest reason is compound interest—the powerful process where your investments generate earnings, and those returns, subsequently, earn even more returns. The longer your money has to grow, the more significant the benefit of this compounding process.
Example: Alex and Taylor are both self-employed individuals. They each aim 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, with an assumption of 7% annual return:
- Alex invests $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently can lead to impressive growth. Take a look at this scenario showing the effect of compound interest:
- 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: Saving the same $200 per month yields only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to achieve your retirement goals.
*The figures provided in this example represent estimates derived from NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are meant to provide general guidance and do not guarantee future performance. Actual results may vary depending on variables including market conditions, fees, and personal factors. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Mesquite, TX, it might seem easier to 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.
- Create a safety net that ensures stability, no matter how your business evolves.
The sooner you start, the less you’ll be required to worry about making up for lost time later in life. Taking steps toward your retirement goals today means gaining control over your financial future and creating for yourself the opportunity to turn your attention to your dreams—both for your golden years and your Mesquite, TX business.
Types of Self-Employed Retirement Plans
There are several retirement savings options available for those working for themselves in Mesquite, TX, each with its own pros and cons. A financial advisor will guide you to learn about the advantages and disadvantages of each choice and identify the one best suited for your circumstances. In most cases, your self-employed retirement plan options in Mesquite, TX consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that include 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 taxable. In contrast, Roth IRAs require contributions from post-tax earnings, but retirement withdrawals that qualify, including earnings, are tax-free. In both types of accounts, withdrawals are penalty-free as long as 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 available to anyone with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs offers a way to save for retirement that permits entrepreneurs to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) already contributed. 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. SEP IRAs may be ideal for entrepreneurs facing periods of inconsistent earnings. Compared to other retirement options, SEP IRAs lack expensive setup or ongoing fees.
SEPs work like traditional IRAs, where contributions are made with pre-tax money and withdrawals are taxed as income.
Eligibility: Both employers and self-employed individuals 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
If you’re self-employed, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan meant for companies that have no employees or if the only employee is your spouse. This type of plan operate much like employer-sponsored 401(k) plans, and enable contributions as both an employee or an employer with pre-tax money. This allows for more savings than SEPs or IRAs; however, the additional opportunities can be balanced by more constrained investment avenues. With this type of plan, you can make either traditional or Roth deferrals, which share the same tax benefits as their IRA contribution counterparts.
Eligibility: Only business owners and their spouses may establish 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:
- Employee contributions of up to 100% of your earned income from self-employment, up to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you are 50 or older, or $34,750 for those who turn 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your net self-employment income, which is your net profit minus half of your self-employment tax and the employee contributions you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (for 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan is a retirement option that provides a set amount to entrepreneurs upon retirement. As opposed to defined contribution plans, this plan is not influenced by market performance, but lets individuals clearly understand the precise amount they'll receive in retirement. This plan is ideal for higher-income entrepreneurs who want to save a large amount for retirement and are willing to make substantial contributions. Contributions offer tax-deferred growth, and withdrawals are taxable as income during retirement.
Eligibility: Any self-employed individual managing a one-person company or with a small staff of under five can open an individual defined benefit plan, but it's typically advised for those over 50 who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans tend to be:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% with plans to contribute more
- Companies 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. Contribution limits are adjusted each year.
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 can be an invaluable resource for entrepreneurs. They have the expertise to help understand the intricacies of saving for retirement and design a customized plan that aligns with your goals. Your advisor in Mesquite, TX will assess where you stand financially, understand your risk tolerance, and help you in selecting the best options about saving and investing for retirement. Included in what we do for you includes:
- Assist in selecting a plan that suits your unique requirements
- Further adapt the plan to fit you personally even further
- Create a written plan that complies with IRS regulations
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Monitor and adjust your plan as needed
- Provide ongoing education and advice as you continue on the road to retirement
- Maximize what you receive in retirement by making the most of your social security
Self-Employed Retirement Plans in Mesquite, TX: Correct Capital's Process
Self-employed individuals in Mesquite, TX who don’t have the time or expertise to manage their self-employed retirement plan themselves can become overwhelmed when faced with their available plans. At Correct Capital, our Mesquite, TX financial advisors manage the majority of your retirement strategy for you, to help make meeting your future savings targets as easy as possible for you. We are here to assist you in setting up your self-employed retirement plan in four simple 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 brief introduction helps us understand what you're looking for with no obligation or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including how many employees you have (if any), your present financial standing, and your long-term savings targets. This enables us to craft a custom plan designed just for you.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll sit down with you and go over your plan step by step to help you fully grasp it and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can initiate your savings journey. As time goes on, we'll check in and monitor your plan to make sure it remains aligned with your goals.
Our Mesquite, TX financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are committed by law and ethics to act in your best interest.
Other financial advisory services we offer in Mesquite, TX 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 Mesquite, TX
To you, your business is more than "just a business", and your Mesquite, TX financial advisors should provide more than just good financial guidance. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to create 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 begin on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
