Self-employed retirement plans New Orleans, LA. The flexibility of being your own boss in New Orleans, LA is one of the best aspects of working for yourself. However, this independence sometimes brings with certain challenges, especially in terms of planning for retirement, since you don't have the benefit of 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 more secure retirement, partnering with a financial advisor in New Orleans, LA to create your self-employed retirement plan offers significant tax advantages that enable both you and your business to thrive.
Few New Orleans, LA wealth management and retirement planning firms truly grasp the challenges faced by self-employed individuals as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (check out our story here), and we are deeply experienced in assisting business owners in their retirement planning needs. We recognize that your professional and personal aspirations extend well past basic numbers, and we are dedicated to offer customized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in New Orleans, LA, or call Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in New Orleans, LA today.
Why New Orleans, LA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also provide tangible benefits today. With customizable contribution options to considerable tax savings, partnering with a financial advisor in New Orleans, LA allows you to customize your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) gives you the freedom to adjust how much you save:
- Customizable Contributions: Save extra during high-income years and scale back when your earnings dip, ensuring your plan works with your current income.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw tax-free later—a smart decision if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, allowing you to keep more of your income.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, which gives your money more time to accumulate.
- State-Specific Incentives: In some states, you could qualify for extra credits as a business owner. These state-level incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements 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
Creating a stable future isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across a mix of stocks, bonds, and other assets can help reduce risk while helping to grow your savings.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business helps you avoid dipping into savings during financial hardships and risking extra costs.
Plan for the Future of Your New Orleans, LA Business
Retirement planning enables you to think through what’s next with your New Orleans, LA business:
- Selling Your Business: When selling your business, accounts such as SEP IRAs or Solo 401(k)s remain yours and won’t be included in the sale. These plans offer the financial stability you’ll need later on. It’s important to note that while the sale of a business usually creates a capital gain, deposits into these plans are restricted by contribution limits (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you are required to pay when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement accounts offer the funds you need through the transition. You may also work with a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens on the sale.
With the best-fit retirement strategy, you can take control of your financial future, lower your tax bill, and build a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in New Orleans, LA Now?
Time remains one of the most crucial factors for building your retirement fund. Starting early not only helps you grow a larger nest egg but also minimizes the financial burden 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 can have a substantial impact on the total you’ll have when you retire. The primary reason is compound interest—the financial principle where your investments generate earnings, and those returns, then, accumulate even more returns. The more time your money has to grow, the greater the benefit of compounding.
Example: Two individuals, Alex and Taylor are both self-employed professionals. Both of them want 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 saves $7,500 annually to bridge the gap.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently can lead to significant growth. Take a look at this scenario showing the power 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 would result in only $235,412.97* by age 65—a gap of over $260,000, all because of a 10-year delay.
Saving early, the less you need to save each year to reach your retirement goals.
*The numbers shown in this scenario represent estimates derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. This information is intended as illustrative examples and are not a promise of future results. Actual results may vary based on variables including market conditions, fees, and personal factors. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in New Orleans, LA, it is often the case that you focus more on reinvesting in your business rather than saving for retirement. Even so, initiating a plan now gives you the chance to:
- Benefit from tax-deferred growth or tax-free withdrawals in the future.
- Enjoy adjustable savings that change with your income.
- Establish a safety net that ensures stability, no matter how your business evolves.
Getting started now, the less you’ll need to worry about catching up later in life. Taking steps toward your retirement goals today means gaining control over your financial future and allowing yourself the freedom to focus on your goals—both for your future retirement and your New Orleans, LA business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for self-employed individuals in New Orleans, LA, each with its own pros and cons. A financial advisor can help you learn about the advantages and disadvantages of each choice and choose the one ideal for your circumstances. Typically, your self-employed retirement plan options in New Orleans, LA consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that provide key tax perks. In a conventional IRA, contributions are typically tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are taxable. In contrast, Roth IRA contributions are made with after-tax income, but qualified withdrawals in retirement, including earnings, are not taxed. In both accounts, withdrawals are penalty-free provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, both traditional and Roth IRAs are open to those with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $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 those who are self-employed 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 above 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 may choose to contribute a set monetary value or a percentage of wages to employee accounts. SEP IRAs may be ideal for entrepreneurs facing cycles of high revenue and low revenue. Unlike other plans, SEP IRAs lack expensive setup or ongoing fees.
SEPs function like standard IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can set up 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
If you’re self-employed, the allowable contribution 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 retirement savings plan designed 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 enable contributions as both the employer and the employee with pre-tax money. This offers more savings versus SEPs or IRAs; however, the increased savings potential can be balanced by more constrained investment avenues. In a solo 401(k) 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 can set up and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you can make two types of contributions:
- Employee contributions of up to 100% of your self-employment income, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your net self-employment income, which is defined as net profit minus half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 if you're over age 50 (for 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan represents a type of retirement plan that delivers a pre-established payout to entrepreneurs upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but enables participants to determine what they'll have in retirement. This plan is recommended for high-earning entrepreneurs who are focused on saving a large amount for retirement and are prepared to contribute substantial contributions. Contributions are tax deferred, and withdrawals incur taxes 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 generally advised for individuals aged 50+ who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans tend to be:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% but are open to increasing contributions
- Organizations with proven consistent profit patterns
- Entrepreneurs over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The contribution limit must be determined by an actuary determined by your income, age, and retirement goals. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in New Orleans, LA for Your Self-Employed Retirement Plan
Working with a financial advisor in New Orleans, LA experienced with retirement plans for the self-employed serves as an invaluable resource for those working for themselves. They offer the knowledge to assist understand the intricacies of saving for retirement and craft a personalized approach that matches your objectives. Your advisor in New Orleans, LA will review your finances, identify your risk preferences, and assist 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 best fits your needs and goals
- Customize the plan to your needs even further
- Formalize a plan in writing in accordance with IRS guidelines
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Monitor and adjust your plan as needed
- Deliver continuous support and financial insights as you continue on the road to retirement
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in New Orleans, LA: Correct Capital's Process
Entrepreneurs in New Orleans, LA who don’t have the time or expertise to handle their self-employed retirement plan independently can become overwhelmed by their available plans. With Correct Capital, our New Orleans, LA financial advisors manage the bulk of your retirement planning for you, working to make meeting your retirement goals as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can help understand if we're a good fit for you and your business. This initial call helps us understand what you're looking for with no pressure or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including whether you have employees, your existing financial picture, and your future objectives. This enables us to craft a custom plan 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 discuss your plan step by step to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll implement the necessary steps so you can initiate your savings journey. Throughout our relationship, we'll have regular meetings and review your strategy to keep it tailored to your evolving circumstances.
Our New Orleans, LA financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in New Orleans, LA include:
- Roth Conversion
- 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 New Orleans, LA
Your business isn't "just a business" to you, and your New Orleans, LA financial advisors should provide more than simply sound financial advice. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to deliver customized self-employed retirement plans. We offer all our New Orleans, LA clients our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To begin on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
