Self-employed retirement plans Milwaukee, WI. The freedom of owning your own business in Milwaukee, WI offers many benefits of being self-employed. That said, this independence can come with a lack of security, notably when it comes to building your retirement fund, as you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, although many could benefit from understanding their retirement options. In addition to having a more secure retirement, seeking advice from a financial advisor in Milwaukee, WI to create your self-employed retirement plan offers significant tax advantages that allow both you and your business to thrive.
Few Milwaukee, WI investment consulting and retirement planning firms understand the needs of small business owners quite like Correct Capital. Our founder's father was a small business owner himself (read more of our story here), and Correct Capital are deeply experienced in helping businesses with their retirement planning needs. We know that your goals for your business and retirement extend well past simple financial figures, and we work tirelessly to offer customized solutions to meet your unique goals. Continue exploring to find out about your self-employed retirement plan options in Milwaukee, WI, or call Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Milwaukee, WI today.
Why Milwaukee, WI 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. Offering flexibility in contributions to significant tax savings, partnering with a financial advisor in Milwaukee, WI allows you to customize your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to modify how much you save:
- Customizable Contributions: Set aside more during profitable years and scale back when income is lower, so that your plan aligns with your current income.
- Roth Options: 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 believe your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed deliver significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) lower your taxable income, allowing you to keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to compound.
- State-Specific Incentives: Based on your location, you might access extra tax breaks as a sole proprietor. These local incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax credit of up to 50% of the first $2,000 put into a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement goes beyond just how much you save—it’s also about how you invest:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and other assets serves to reduce risk while still growing your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund helps you avoid tapping into your nest egg during tough times and facing tax penalties.
Plan for the Future of Your Milwaukee, WI Business
A thoughtful retirement strategy also helps you think through what’s next with your Milwaukee, WI business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain yours and won’t be included in the sale. These accounts ensure the financial stability you’ll need in the future. Remember that while selling your business results in a capital gain, retirement plan contributions are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, based on plan compensation).
- Minimizing Taxes: Using retirement contributions wisely can reduce 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 might want to seek advice from a financial advisor with expertise in succession and retirement planning to reduce taxes associated with the transaction.
With the best-fit retirement strategy, you manage your financial future, lower your tax bill, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Milwaukee, WI Now?
Time is one of the most valuable factors for building your retirement fund. Getting a head start not only allows you to build a larger nest egg but also reduces the stress of catching up later in life. Here’s why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement can have a major impact on the savings you’ll have when you retire. The biggest reason is compound interest—the powerful process where your investments generate earnings, and those returns, in turn, earn even more returns. The more time your money has to grow, the larger the effect of this compounding process.
Example: Alex and Taylor are both self-employed individuals. Both of them want to save $500,000 for retirement by age 65:
- Alex begins contributing $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 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
Regular, modest investments invested steadily may result in significant growth. Consider this example showing the impact of compound interest:
- Starting at age 25: By investing $200 per month in a retirement plan with an projected return of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Saving the same $200 per month leaves you with only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
The earlier you begin, the less you need to save each year to achieve your retirement goals.
*The numbers shown in this scenario are based on estimates generated with NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. These examples are for illustrative purposes only and are not a promise of future results. Actual results may vary depending on factors such as market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
For self-employed individuals in Milwaukee, WI, it is often the case that you put more emphasis on reinvesting in your business over saving for retirement. Even so, initiating a plan now allows you to:
- Leverage tax-deferred growth or tax-free withdrawals in the future.
- Take advantage of adjustable savings that adapt to your cash flow.
- Build a long-term safety measure that ensures stability, no matter how your business develops.
Starting early, the less you’ll have to worry about catching up later in life. Saving for retirement now means managing your financial future and giving yourself the freedom to turn your attention to your dreams—both for your golden years and your Milwaukee, WI business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for self-employed individuals in Milwaukee, WI, each offering its own pros and cons. A financial advisor can help you learn about the advantages and disadvantages of each option and determine the one ideal for your unique situation. In most cases, your self-employed retirement plan options in Milwaukee, WI consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that provide key tax perks. In a traditional IRA, you can usually deduct your contributions from taxable income, and returns grow free of current taxes, but money taken out during retirement are subject to income tax. In contrast, with Roth IRAs, you contribute using income already taxed, but eligible distributions during retirement, including earnings, are not taxed. In both accounts, withdrawals don’t incur penalties as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs 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 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA serves as a retirement savings option that enables entrepreneurs to set aside a portion of their self-employment income. Contributions must come from 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, you are obligated to contribute the same amount for them as you do for yourself. You may choose to contribute a set monetary value or a percentage of wages to employee accounts. This type of plan works well for entrepreneurs facing fluctuating revenue streams. Compared to other retirement options, SEP IRAs lack costly startup or administrative fees.
SEPs operate like traditional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Employers of any type, including self-employed individuals can open 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
For self-employed individuals, the contribution you can make 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 self-employed retirement plan intended for businesses with no employees or if the only employee is your spouse. Solo 401(k)s operate much like traditional employer-managed 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This offers more savings compared to SEPs or IRAs; however, the extra savings options can be balanced by more limited investment options. 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 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:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, up 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 if you attain age 60-63 in 2025.
- Profit-sharing contributions (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 deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 if you're over age 50 (in 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that guarantees 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 receive in retirement. This plan is recommended for higher-income self-employed individuals who aim to accumulate a substantial amount for retirement and can commit to making larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxed as income upon retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees are eligible to open an individual defined benefit plan, but it's generally suggested for those over 50 who earn at least $250,000 a year. Generally, good candidates for defined benefit plans include:
- Partners or owners who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% with plans to contribute more
- Companies 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 requires calculation from an actuary using your income, age, and retirement goals. Allowable contributions change annually.
The Importance of a Financial Advisor in Milwaukee, WI for Your Self-Employed Retirement Plan
Partnering with an advisor in Milwaukee, WI focused on self-employed retirement strategies can be an essential partner for entrepreneurs. They have the expertise to help guide you through the challenges of retirement planning and design a tailored strategy that reflects your aspirations. A financial advisor in Milwaukee, WI will evaluate your financial situation, understand your risk tolerance, and help you in choosing wisely about saving and investing for retirement. Included in what we do for you features:
- Assist in selecting a plan that best fits your needs and goals
- Customize the plan to your needs even further
- Adopt a written plan in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Help you understand the plan's terms
- Monitor and adjust your plan when necessary
- Offer continued financial education and guidance as you continue on the road to retirement
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Milwaukee, WI: Correct Capital's Process
Milwaukee, WI business owners who lack the time, interest, or knowledge to manage their own retirement planning themselves often feel overwhelmed by their choices. At Correct Capital, our Milwaukee, WI financial advisors handle the lion's share of your savings plan setup for you, and strive to ensure meeting your retirement goals as hassle-free as possible for you. We are here to assist you in setting up your self-employed retirement plan in just four steps:
- 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 brief introduction allows us to learn about your needs with no obligation or extensive time commitment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including your employee count, your existing financial picture, and your long-term savings targets. This helps us create a personalized strategy designed just for you.
- Review Your Plan: When we finalize a plan from the information you provide, we'll schedule a meeting and discuss your plan in detail to make sure it's clear 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 initiate your savings journey. Over the course of our partnership, we'll check in and review your strategy to ensure it stays suited to your needs.
Our Milwaukee, WI financial advisors and retirement plan consultants serve as fiduciary advisors, who are obligated to they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Milwaukee, WI include:
- Family Wealth Planning
- 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
Call Correct Capital for Your Self-Employed Retirement Plan in Milwaukee, WI
Your business isn't "just a business" to you, and your Milwaukee, WI financial advisors should provide more than just good financial guidance. With Correct Capital, we make it a priority to understand our clients and their businesses to provide personalized self-employed retirement plans. To every client in Milwaukee, WI, we provide 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.
