Self-employed retirement plans New York City, NY. The freedom of being your own boss in New York City, NY is one of the greatest advantages of working for yourself. However, this freedom sometimes brings with potential drawbacks, notably regarding planning for retirement, because you don't have access to a workplace retirement plan. 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 financially stable retirement, seeking advice from a financial advisor in New York City, NY to set up your self-employed retirement plan can provide significant tax advantages that help both you and your business to thrive.
Few New York City, NY financial advisory and retirement planning firms are as attuned to the requirements of small business owners quite like Correct Capital. Our company’s founder grew up with a father who 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 know that your goals for your business and retirement aren’t limited to basic numbers, and we strive to provide personalized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in New York City, NY, or call Correct Capital at 877-930-401k or contact us online to talk to a entrepreneurial financial advisor in New York City, NY today.
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 immediate benefits today. From flexible contributions to substantial tax savings, working with a financial advisor in New York City, NY allows you to customize your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
When your earnings vary from year to year, a plan like a SEP IRA or Solo 401(k) provides the option to modify how much you save:
- Customizable Contributions: Contribute more during successful years and reduce savings when income is lower, so your plan aligns with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw without tax penalties in the future—a wise move if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, allowing you to keep more of your income.
- 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: In some states, you might access extra tax breaks as a self-employed individual. These local incentives can make these plans even more advantageous.
- 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, cutting down 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: Allocating your investments across different stocks, bonds, and other assets is a smart way to minimize exposure to risk while continuing to build your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund ensures you don’t tapping into your nest egg during challenging periods and risking extra costs.
Plan for the Future of Your New York City, NY Business
Preparing for retirement enables you to prepare for what’s next with your New York City, NY business:
- Selling Your Business: If you’re planning to sell, plans like SEP IRAs or Solo 401(k)s remain yours and won’t be included in the sale. These savings can provide the financial stability you’ll need later on. Keep in mind that while the sale of a business usually creates a capital gain, contributions to retirement accounts 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, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you are required to pay when you pass on your business.
- Succession Planning: For those winding down or handing over their business, your nest egg offer financial security as you make this shift. You might want to partner with a financial advisor who specializes in succession planning and retirement accounts to reduce taxes on the sale.
With the best-fit retirement strategy, you manage your financial future, reduce your tax burden, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in New York City, NY Now?
There’s no denying that time is one of the most valuable resources in retirement planning. Starting early not only allows you to build a bigger financial cushion but also reduces the stress of catching up later in life. Here’s why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement could lead to a major impact on the total you’ll have when you retire. The main reason is compound interest—the concept where your investments generate earnings, and those returns, subsequently, accumulate even more returns. The greater time span your money has to grow, the larger the impact of this compounding process.
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 begins contributing $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but contributes $7,500 annually to catch up.
By age 65, using a projected 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time often create significant growth. Take a look at this scenario showing the impact of consistent growth:
- Starting at age 25: By investing $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: Contributing the same $200 per month leaves you with only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
Saving early, the less you need to save each year to reach your retirement goals.
*These calculations represent estimates calculated using NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is intended as illustrative examples and are not a promise of future results. Actual results may vary depending on factors such as market conditions, fees, and personal factors. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in New York City, NY, it is often the case that you prioritize reinvesting in your business rather than saving for retirement. That said, beginning a plan now gives you the chance to:
- Benefit from tax-deferred growth or penalty-free withdrawals down the road.
- Enjoy flexible contributions that change with your income.
- Establish a long-term safety measure that ensures stability, no matter how your business changes.
Starting early, the less you’ll have to worry about making up for lost time later in life. Building your retirement savings today means gaining control over your financial future and giving yourself the opportunity to turn your attention to your dreams—both for your golden years and your New York City, NY business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for entrepreneurs in New York City, NY, each with its own advantages and considerations. A financial advisor is available to help you understand the benefits and drawbacks of each plan and determine the one most suitable for your needs. Generally speaking, your self-employed retirement plan options in New York City, NY are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include specific tax advantages. In a traditional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but withdrawals in retirement are taxable. In contrast, with Roth IRAs, you contribute are made with after-tax income, but qualified withdrawals in retirement, including earnings, are tax-free. In both cases, withdrawals don’t incur penalties if you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are available to anyone with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped 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 allows self-employed individuals to set aside a portion of their self-employment income. Contributions must come from an employer, so, as a sole proprietor, you (the employee) would not be able to contribute above the 25% you (the employer) already contributed. If you have employees, you must contribute the same amount for them as you do for yourself. You have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. This type of plan may be ideal for businesses that experience cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs are free of the high fees associated with starting or maintaining other plans.
SEPs work like traditional IRAs, where contributions are made with pre-tax money and money withdrawn is subject to income tax.
Eligibility: Any employer, including the self-employed can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 25% of compensation, or
- $70,000 for 2025
As a self-employed person, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, also called an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan meant for companies that have no employees or when the sole employee is your spouse. Solo 401(k)s function similarly to employer-sponsored 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This allows for more savings than SEPs or IRAs; however, the additional opportunities can be balanced by more limited investment options. With this type of 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 may establish and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you are allowed to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your net self-employment income, which is defined as net profit minus half of your self-employment tax and the elective deferrals you made.
Total contributions are capped at $70,000, or $77,500 if you're over age 50 (as of 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans is a retirement option that guarantees a pre-established payout to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but allows self-employed individuals to know the precise amount they'll have in retirement. This strategy is recommended for higher-income professionals who want to save a substantial amount for retirement and are willing to make substantial contributions. Contributions are tax deferred, and withdrawals are taxed as income during retirement.
Eligibility: Entrepreneurs operating a solo business or with a small staff of under five may establish an individual defined benefit plan, but it's typically advised for individuals aged 50+ who make $250,000 or more annually. Generally, good candidates for defined benefit plans tend to be:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% and are willing to do more
- Businesses showing consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The contribution limit must be determined by an actuary using 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 focused on self-employed retirement strategies is an important asset for those working for themselves. They offer the knowledge to assist navigate the complexities of retirement planning and develop a customized plan that reflects your aspirations. An expert in your area will assess where you stand financially, determine how much risk you’re comfortable with, and help you in choosing wisely about saving and investing for retirement. Part of what we do for you includes:
- Assist in selecting a plan that suits your unique requirements
- Customize the plan to your specific situation even further
- Adopt a written plan as required by IRS rules
- 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
- Deliver continuous support and financial insights as you continue on the road to retirement
- Boost your retirement earnings 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 aren’t equipped with the time or understanding to handle their self-employed retirement plan themselves may end up overwhelmed by their options. Through our team at Correct Capital, our New York City, NY financial advisors handle the majority of your retirement strategy for you, working to make meeting your financial objectives as straightforward as possible for you. We can help you get set up 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 will assess if we're suited to your needs for you and your business. This short conversation helps us learn about your needs with zero commitment or significant effort on your part.
- Gather Information: Should we agree to proceed, we'll ask for information, including whether you have employees, your present financial standing, and your future objectives. This enables us to craft a tailored approach suited specifically for your needs.
- Review Your Plan: When we finalize a plan from the information you provide, we'll meet with you and go over your plan in detail to make sure it's clear and understand how it best correlates to your needs.
- Implementation and Monitoring: When we finalize on your plan, we'll implement the necessary steps so you can start saving. Throughout our relationship, we'll have regular meetings and monitor your plan to make sure it remains aligned with your goals.
Our New York City, NY financial advisors and retirement plan consultants serve as fiduciary advisors, who are obligated to they are legally and ethically bound to do what's in your best interest.
Other financial advisory services we offer in New York City, NY include:
- 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
- High-Net-Worth Wealth Management
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 need to offer more than just good financial guidance. With Correct Capital, we take the time to get to know our clients and their businesses to create 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 take the first step on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
