Self-employed retirement plans New Orleans, LA. The flexibility of owning your own business in New Orleans, LA offers many benefits of being self-employed. Even so, this freedom sometimes brings with a lack of security, especially regarding retirement savings, because you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off looking into other possibilities. In addition to having a financially stable retirement, working with a financial advisor in New Orleans, LA to create your self-employed retirement plan delivers significant tax advantages that help your business to grow and succeed.
Few New Orleans, LA financial advisory and retirement planning firms truly grasp the challenges faced by entrepreneurs better than Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and we have a rich history of assisting business owners in their retirement planning needs. We recognize that your goals for your business and retirement aren’t limited to just monetary concerns, and we strive to create customized solutions that reflect your objectives. 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 speak with a small business financial advisor in New Orleans, LA today.
Schedule a Meeting With an Advisor Today
Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
Schedule a 15-Minute Introductory Call
Why New Orleans, LA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver real benefits today. From flexible contributions to considerable tax savings, consulting a financial advisor in New Orleans, LA helps you customize your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to tailor how much you save:
- Customizable Contributions: Contribute more during high-income years and cut back when your earnings dip, so your plan fits your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw your savings tax-free down the road—a wise move if you expect your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) lower your taxable income, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, providing your money more time to compound.
- State-Specific Incentives: Based on your location, you may be eligible for additional deductions as a business owner. These local incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can apply for a credit of up to 50% of the first $2,000 put into a retirement plan, helping to lower 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 determined by your investment strategy:
- Diversified Portfolios: Allocating your investments across different asset classes like stocks and bonds is a smart way to mitigate financial risk while helping to grow your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business ensures you don’t using your retirement funds during financial hardships and facing tax penalties.
Plan for the Future of Your New Orleans, LA Business
Retirement planning can assist you think through what’s next with your New Orleans, LA business:
- Selling Your Business: If you’re planning to sell, plans like SEP IRAs or Solo 401(k)s remain yours and are not part of the sale. These accounts ensure the steady income you’ll need later on. It’s important to note that while the sale of a business usually creates a capital gain, retirement plan contributions are restricted by contribution limits (e.g., up to $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: Strategically planning your contributions can reduce the taxes you might face when you transfer your business.
- Succession Planning: If you’re passing the business on, your retirement accounts ensure the funds you need during the change. You may also partner with a financial advisor who specializes in succession planning and retirement accounts to help with taxes during the sale.
With the proper savings strategy, you gain control over your financial future, lower your tax bill, and create a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in New Orleans, LA Now?
There’s no denying that time is one of the most important resources for building your retirement fund. Starting early not only allows you to build a more substantial retirement fund but also minimizes the financial burden 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 can have a substantial impact on the savings you’ll have when you stop working. The biggest reason is compound interest—the concept where your investments earn returns, and those returns, then, earn even more returns. The greater time span your money has to grow, the larger the impact of compounding.
Example: Taylor and Alex are both entrepreneurs. Their shared goal is to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but saves $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently may result in 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 projected return of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month yields only $235,412.97* by age 65—a difference of over $260,000, simply due to a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to achieve your retirement goals.
*These calculations are estimates generated with NerdWallet’s Compound Interest Calculator, based on a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. These examples are intended as illustrative examples and do not guarantee future performance. Your individual results may differ based on variables including market conditions, fees, and individual circumstances. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in New Orleans, LA, it might seem easier to prioritize reinvesting in your business over saving for retirement. That said, initiating a plan now allows you to:
- Take advantage of tax-free future growth or tax-free withdrawals down the road.
- Benefit from contribution flexibility that align with your earnings.
- Establish a long-term safety measure that offers peace of mind, no matter how your business changes.
Starting early, the less you’ll need to worry about playing catch-up later in life. Taking steps toward your retirement goals today means managing your financial future and giving yourself the freedom to concentrate on your dreams—both for your golden years and your New Orleans, LA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for entrepreneurs in New Orleans, LA, each offering its own pros and cons. A financial advisor can help you understand the benefits and drawbacks of each option and determine the one most suitable for your needs. In most cases, your self-employed retirement plan options in New Orleans, LA are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement 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 taxed as income. 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 accounts, withdrawals are penalty-free if you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, both traditional and Roth IRAs are accessible for individuals with a source of income.
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 serves as a retirement savings option that permits self-employed individuals to set aside a portion of their self-employment income. Contributions are strictly employer contributions 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) allocate. If you have employees, you must 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. A SEP IRA may be ideal for businesses that experience cycles of high revenue and low revenue. Unlike other plans, SEP IRAs are free of expensive setup or ongoing fees.
SEPs work like traditional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser 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: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses without employees or where the only employee is a spouse. These plans operate much like standard 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 increased savings potential may be offset 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: This plan is exclusively for business owners and their spouses may establish and contribute to a solo 401(k).
Contribution Limits: If you are self-employed with a solo 401(k) plan, you have the ability to make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, 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 for those who turn 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) are limited to 25% of your net self-employment income, which is calculated as net profits less half of your self-employment tax and the employee contributions you made.
Your combined contributions must not surpass $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 offers a structured retirement solution that guarantees a set amount to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, this plan is not influenced by market performance, but enables participants to determine exactly how much they'll have in retirement. This plan is ideal for wealthier entrepreneurs who aim to accumulate a substantial amount for retirement and can commit to making larger deposits. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income in retirement.
Eligibility: Self-employed professionals managing a one-person company or with less than five employees can open an individual defined benefit plan, but it's typically recommended for those over 50 who generate a minimum of $250,000 yearly. 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+)
- Organizations that already put in 3-4% and are willing to do more
- Companies with proven consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The contribution limit must be determined by an actuary using your income, age, and retirement goals. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in New Orleans, LA for Your Self-Employed Retirement Plan
A financial advisor in New Orleans, LA experienced with retirement plans for the self-employed can be an invaluable resource for those working for themselves. They have the expertise to help understand the intricacies of saving for retirement and develop a personalized approach that matches your objectives. Your advisor in New Orleans, LA will evaluate your financial situation, understand your risk tolerance, and help you in selecting the best options about saving and investing for retirement. A key part of what we do for you includes:
- Help you choose a plan that suits your unique requirements
- Further adapt 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
- Review and modify your plan as needed
- Provide ongoing education and advice to help you navigate your retirement journey
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in New Orleans, LA: Correct Capital's Process
Entrepreneurs in New Orleans, LA who lack the time, interest, or knowledge to manage their retirement savings strategy themselves may end up overwhelmed as they look at their options. With Correct Capital, our New Orleans, LA financial advisors handle the lion's share of your retirement strategy for you, working to make meeting your future savings targets 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 help understand if we're a good fit for you and your business. This brief introduction allows us to get a sense of your goals with no obligation or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including whether you have employees, your existing financial picture, and your retirement goals. This allows us to put together a personalized strategy that aligns with your goals.
- Review Your Plan: After we put together a plan using the information you provide, we'll sit down with you and review 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. Throughout our relationship, we'll check in and track your progress to keep it tailored to your evolving circumstances.
Our New Orleans, LA financial advisors and retirement plan consultants are 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:
- 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
To you, your business is more than "just a business", and your New Orleans, LA financial advisors should provide more than just good financial guidance. Correct Capital takes pride in, we make it a priority to understand 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 of the advice you get from us will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
