Self-employed retirement plans Oakland, CA. The independence of being your own boss in Oakland, CA is one of the best aspects of working for yourself. However, this independence often comes with potential drawbacks, especially in terms of building your retirement fund, because you don't have the benefit 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 achieving a financially stable retirement, partnering with a financial advisor in Oakland, CA to set up your self-employed retirement plan can provide significant tax advantages that enable your business to grow and succeed.
Few Oakland, CA financial advisory and retirement planning firms understand the needs of entrepreneurs as well as Correct Capital. Our founder's father was a small business owner himself (learn more about our story here), and Correct Capital have a rich history of assisting business owners in their retirement planning needs. We know that your professional and personal aspirations aren’t limited to basic numbers, and we strive to create tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Oakland, CA, or call Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Oakland, CA today.
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Why Oakland, CA 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 immediate benefits today. Offering flexibility in contributions to significant tax savings, working with a financial advisor in Oakland, CA enables you to create your retirement plan to suit 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 freedom to modify how much you save:
- Customizable Contributions: Save extra during successful years and cut back when your earnings dip, so your plan fits 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 anticipate your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA shrink your tax liability, helping you keep more of your earnings.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, which gives your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you could qualify for extra tax breaks as a self-employed individual. These local incentives can make these plans even more valuable.
- 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, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement 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 serves to mitigate financial risk while still growing your savings.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net ensures you don’t tapping into your nest egg during financial hardships and risking extra costs.
Plan for the Future of Your Oakland, CA Business
A thoughtful retirement strategy can assist you think through what’s next with your Oakland, CA business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and are not part of the sale. These accounts can provide the reliable income you’ll need later on. Keep in mind that while selling a business often leads to a capital gain, retirement plan contributions are subject to yearly maximums (e.g., up to $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, factoring in catch-up contributions, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you might face when you pass on your business.
- Succession Planning: If you’re passing the business on, your nest egg offer financial security during the change. You may also seek advice from a financial advisor with expertise in succession and retirement planning to reduce taxes on the sale.
With the proper savings strategy, you can take control of 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 Oakland, CA Now?
Time remains one of the most crucial resources in retirement planning. Beginning sooner rather than later not only lets you accumulate a bigger financial cushion but also reduces the financial burden of playing catch-up as you get older. Here’s why it is beneficial to start now:
The Cost of Waiting
Waiting to start your retirement fund may cause a significant impact on the amount you’ll have when you stop working. The biggest reason is compound interest—the concept where your investments earn returns, and those returns, subsequently, generate even more returns. The longer your money has to grow, the larger the benefit of this compounding process.
Example: Two individuals, Alex and Taylor 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 waits until age 40 but puts away $7,500 annually to make up for lost time.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Small, consistent savings invested steadily can lead to substantial growth. Consider this example showing the power of compounding:
- Starting at age 25: If you invest $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll grow to approximately $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 difference of over $260,000, just from a 10-year delay.
Saving early, 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. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. This information is meant to provide general guidance and cannot predict actual future outcomes. Outcomes may change depending on variables including market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Oakland, CA, it can be tempting to prioritize reinvesting in your business rather than saving for retirement. Even so, starting a plan now allows you to:
- Take advantage of tax-free future growth or tax-free withdrawals later on.
- Benefit from contribution flexibility that change with your income.
- Establish a safety net that ensures stability, no matter how your business changes.
Getting started now, the less you’ll have to worry about playing catch-up later in life. Building your retirement savings today means gaining control over your financial future and allowing yourself the freedom to turn your attention to your dreams—both for your future retirement and your Oakland, CA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for entrepreneurs in Oakland, CA, each providing its own benefits and trade-offs. A financial advisor will guide you to learn about the benefits and drawbacks of each plan and identify the one best suited for your circumstances. Typically, your self-employed retirement plan options in Oakland, CA consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that offer specific tax advantages. In a conventional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are taxable. In contrast, Roth IRA contributions using income already taxed, but qualified withdrawals in retirement, including earnings, are not taxed. In both accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, 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 qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA is a retirement plan that allows self-employed individuals to contribute a percentage of their net earnings. Contributions are strictly employer contributions an employer, so, as a independent business owner, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) allocate. If you have employees, it's required to 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 works well for companies with fluctuating revenue streams. Unlike other plans, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs work like traditional IRAs, where contributions are made with pre-tax money and withdrawals are taxed as income.
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: A Solo 401(k) plan, also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses without employees or when the sole employee is your spouse. Solo 401(k)s operate much like traditional employer-managed 401(k) plans, and let you make contributions as both the employer and the employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the extra savings options often come with more constrained investment avenues. 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: This plan is exclusively for business owners and their spouses can set up 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:
- 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 are 50 or older, 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 calculated as net profits less half of your self-employment tax and the elective deferrals you made.
Total contributions are capped at $70,000, or $77,500 for those aged 50 and older (for 2025), $81,250 for individuals turning 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 business owners upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but enables participants to determine the precise amount they'll receive in retirement. This option is recommended for wealthier self-employed individuals who want to save a substantial amount for retirement and can commit to making sizeable contributions. Contributions are tax deferred, and withdrawals incur taxes as income during retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees can open an individual defined benefit plan, but it's typically advised for those over 50 who make $250,000 or more annually. In most cases, good candidates for defined benefit plans are:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% with plans to contribute more
- Organizations showing consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The cap on contributions requires calculation from an actuary determined by your financial situation, age, and savings targets. Contribution limits change annually.
The Importance of a Financial Advisor in Oakland, CA for Your Self-Employed Retirement Plan
Working with a financial advisor in Oakland, CA specialized in self-employed retirement plans can be an important asset for those working for themselves. They have the expertise to help understand the intricacies of saving for retirement and design a tailored strategy that reflects your aspirations. A financial advisor in Oakland, CA will evaluate your financial situation, identify your risk preferences, and help you in making informed decisions about saving and investing for retirement. Part of what we do for you involves:
- Help you choose a plan that suits your unique requirements
- Customize the plan to your needs even further
- Adopt a written plan in accordance with IRS guidelines
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Review and modify your plan when necessary
- Deliver continuous support and financial insights throughout your retirement planning process
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Oakland, CA: Correct Capital's Process
Self-employed individuals in Oakland, CA who aren’t equipped with the time or understanding to oversee their retirement savings strategy on their own often feel overwhelmed by their options. Through our team at Correct Capital, our Oakland, CA financial advisors handle the majority of your savings plan setup for you, and strive to ensure 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 will assess if we're suited to your needs for you and your business. This short conversation allows us to get a sense of your goals with zero commitment or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including how many employees you have (if any), your existing financial picture, and your future objectives. This allows us to put together a custom plan designed just for you.
- Review Your Plan: When we finalize a plan from the information you provide, we'll schedule a meeting 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 implement the necessary steps so you can start saving. As time goes on, we'll meet with you and monitor your plan to keep it tailored to your evolving circumstances.
Our Oakland, CA financial advisors and retirement plan consultants serve as fiduciary advisors, meaning they are required by law and ethical standards to prioritize your needs above all else.
Other financial advisory services we offer in Oakland, CA 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 Oakland, CA
To you, your business is more than "just a business", and your Oakland, CA financial advisors need to offer more than basic financial recommendations. With Correct Capital, we focus on building a relationship with our clients and their businesses to deliver tailored self-employed retirement plans. We offer all our Oakland, CA clients 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, call Correct Capital today at 877-930-401k or contact us online.
