Self-employed retirement plans New York City, NY. The freedom of being your own boss in New York City, NY offers many benefits of being self-employed. Even so, this flexibility can come with a lack of security, particularly when it comes to planning for retirement, since you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off exploring their options. In addition to having a more comfortable retirement, seeking advice from a financial advisor in New York City, NY to create your self-employed retirement plan delivers significant tax advantages that enable both you and your business to thrive.
Few New York City, NY investment consulting and retirement planning firms truly grasp the challenges faced by self-employed individuals as well as Correct Capital. Our founder's father was a small business owner himself (check out our story here), and we have a rich history of helping businesses with their retirement planning needs. We know that your professional and personal aspirations aren’t limited to basic numbers, and we are dedicated to provide customized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in New York City, NY, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in New York City, NY today.
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Why New York City, NY Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also deliver tangible benefits today. With customizable contribution options to substantial tax savings, consulting a financial advisor in New York City, NY enables you to design your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income over time, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to modify how much you save:
- Customizable Contributions: Save extra during successful years and scale back when your earnings dip, ensuring your plan aligns with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw tax-free later—a smart decision if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, so you can keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you could qualify for additional deductions as a business owner. These local incentives help make these plans even more beneficial.
- 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 contributed a retirement plan, further reducing 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 linked to the way you invest:
- Diversified Portfolios: Spreading your investments across a mix of asset classes like stocks and bonds is a smart way to mitigate financial risk while continuing to build your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund prevents you from tapping into your nest egg during tough times and incurring penalties.
Plan for the Future of Your New York City, NY Business
Preparing for retirement also helps you think through what’s next with your New York City, NY business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s stay in your name and won’t be included in the sale. These accounts can provide the financial stability you’ll need during retirement. Keep in mind 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 up to $70,000 for Solo 401(k)s, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you are required to pay when you transfer your business.
- Succession Planning: For those winding down or handing over their business, your nest egg ensure the funds you need as you make this shift. You can also work with a financial advisor with expertise in succession and retirement planning to help with taxes on the sale.
With the best-fit retirement strategy, you manage your financial future, reduce your tax burden, and establish a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in New York City, NY Now?
Time remains one of the most crucial factors for building your retirement fund. Getting a head start not only helps you grow a more substantial retirement fund but also lowers the financial burden of playing catch-up as you get older. This is why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement may cause a significant impact on the amount you’ll have when you retire. The primary reason is compound interest—the powerful process where your investments earn returns, and those returns, subsequently, earn even more returns. The greater time span your money has to grow, the larger the effect of this compounding process.
Example: Two individuals, Alex and Taylor are both entrepreneurs. They each aim to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but contributes $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and accumulates $691,184.39*.
- Taylor puts in $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments invested steadily may result in impressive growth. Consider this example showing the impact of compounding:
- Starting at age 25: Putting aside $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: Investing the same $200 per month leaves you with only $235,412.97* by age 65—a shortfall of over $260,000, just from a 10-year delay.
Starting sooner, the less you need to save each year to meet your retirement goals.
*The numbers shown in this scenario represent estimates generated with NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is meant to provide general guidance and do not guarantee future performance. Outcomes may change due to factors such as market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in New York City, NY, it is often the case that you prioritize reinvesting in your business rather than saving for retirement. Even so, initiating a plan now gives you the chance to:
- Benefit from tax-free future growth or penalty-free withdrawals in the future.
- Take advantage of adjustable savings that adapt to your cash flow.
- Build a safety net that provides security, no matter how your business develops.
Starting early, the less you’ll have to worry about making up for lost time later in life. Saving for retirement now means gaining control over your financial future and giving yourself the freedom to focus on your dreams—both for your future retirement and your New York City, NY business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for entrepreneurs in New York City, NY, each offering its own benefits and trade-offs. A financial advisor can help you evaluate the advantages and disadvantages of each option and determine the one best suited for your unique situation. In most cases, your self-employed retirement plan options in New York City, NY include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that offer distinct tax benefits. In a standard IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but retirement distributions are taxable. In contrast, Roth IRA contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals are penalty-free provided you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are open to those with taxable earnings.
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 serves as a retirement savings option that enables entrepreneurs to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role more than the 25% you (the employer) already contributed. If you have employees, you must contribute the same amount for them as you do for yourself. It's your choice whether to contribute a flat-dollar amount or a percentage of wages to employee accounts. A SEP IRA works well for businesses that experience fluctuating revenue streams. Compared to other retirement options, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs function like standard IRAs, where contributions are made with pre-tax money and retirement distributions are taxable.
Eligibility: Both employers and self-employed individuals can open 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: The Solo 401(k), commonly known as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed designed for businesses without employees or where the only employee is a spouse. This type of plan are similar to standard 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This provides more savings than SEPs or IRAs; however, the extra savings options can be balanced by 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: Only business owners and their spouses are eligible to open 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. In 2025, those limits are $23,500, or $31,000 for those aged 50 and above, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) must not surpass 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 (in 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that provides a pre-established payout to self-employed individuals upon retirement. Unlike defined contribution plans mentioned above, this plan is not influenced by market performance, but enables participants to determine what they'll get in retirement. This plan is best suited for higher-income entrepreneurs who are focused on saving a substantial amount for retirement and are willing to make sizeable contributions. Contributions are tax deferred, and withdrawals incur taxes as income in retirement.
Eligibility: Self-employed professionals running an owner-only business or with a small staff of under five are eligible to open an individual defined benefit plan, but it's most commonly suggested for those over 50 who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans are:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% but are open to increasing contributions
- Organizations 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 contribution limit is calculated by an actuary determined by your financial situation, age, and savings targets. Allowable contributions change annually.
The Importance of a Financial Advisor in New York City, NY for Your Self-Employed Retirement Plan
Partnering with an advisor in New York City, NY specialized in self-employed retirement plans can be an invaluable resource for self-employed individuals. They have the expertise to help understand the intricacies of saving for retirement and design a personalized approach that reflects your aspirations. A financial advisor in New York City, NY will assess where you stand financially, identify your risk preferences, and guide you in selecting the best options about saving and investing for retirement. Included in what we do for you involves:
- Help you choose a plan that aligns with your objectives and circumstances
- Tailor the plan to your specific situation even further
- Create a written plan in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan to keep it aligned with your goals
- Offer continued financial education and guidance as you continue on the road to retirement
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in New York City, NY: Correct Capital's Process
Entrepreneurs in New York City, NY who lack the time, interest, or knowledge to oversee their self-employed retirement plan on their own may end up overwhelmed when faced with their choices. With Correct Capital, our New York City, NY financial advisors manage the bulk of your retirement strategy for you, and strive to ensure meeting your financial objectives as straightforward as possible for you. We are here to assist you in setting up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if we're suited to your needs for you and your business. This short conversation lets us understand what you're looking for with zero commitment or significant effort on your part.
- Gather Information: Should we agree to proceed, we'll gather information, including how many employees you have (if any), your current financial situation, and your future objectives. This allows us to put together a custom plan that aligns with your goals.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll sit down with you and review your plan thoroughly to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can start saving. Throughout our relationship, we'll check in and monitor your plan to keep it tailored to your evolving circumstances.
Our New York City, NY financial advisors and retirement plan consultants act as fiduciary advisors, which means they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in New York City, NY 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 York City, NY
Your business isn't "just a business" to you, and your New York City, NY financial advisors must deliver more than just good financial guidance. At Correct Capital, we make it a priority to understand our clients and their businesses to deliver tailored self-employed retirement plans. To every client in New York City, NY, we provide 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.
