Self-employed retirement plans Oklahoma City, OK. The independence of owning your own business in Oklahoma City, OK offers many benefits of having a self-directed career. Even so, this freedom sometimes brings with a lack of security, notably regarding retirement savings, since you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off understanding their retirement options. In addition to enjoying a financially stable retirement, partnering with a financial advisor in Oklahoma City, OK to create your self-employed retirement plan offers significant tax advantages that enable you to move your business forward.
Few Oklahoma City, OK financial advisory and retirement planning firms are as attuned to the requirements of entrepreneurs quite like Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and our firm have a rich history of helping businesses with their retirement planning needs. We know that your professional and personal aspirations extend well past just monetary concerns, and we strive to provide tailored solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Oklahoma City, OK, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Oklahoma City, OK today.
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Why Oklahoma City, OK Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also provide immediate benefits today. With customizable contribution options to significant tax savings, consulting a financial advisor in Oklahoma City, OK enables you to design your retirement plan to align with 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 option to adjust how much you save:
- Customizable Contributions: Contribute more during profitable years and cut back when income is lower, so your plan fits your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw your savings tax-free down the road—an advantageous choice if you expect your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, allowing you to keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you may be eligible for additional credits as a business owner. 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, further reducing 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 about how you invest:
- Diversified Portfolios: Distributing your investments across different stocks, bonds, and alternatives is a smart way to reduce risk while still growing your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net helps you avoid tapping into your nest egg during tough times and facing tax penalties.
Plan for the Future of Your Oklahoma City, OK Business
Preparing for retirement also helps you prepare for what’s next with your Oklahoma City, OK business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These savings ensure the reliable income you’ll need during retirement. Keep in mind that while the sale of a business usually creates a capital gain, contributions to retirement accounts are restricted by contribution limits (e.g., a maximum of $7,000 for IRAs or up to $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: If you’re passing the business on, your nest egg provide financial security through the transition. You may also work with a financial advisor who specializes in succession planning and retirement accounts to help with taxes on the sale.
With the best-fit retirement strategy, you manage your financial future, lower your tax bill, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Oklahoma City, OK Now?
There’s no denying that time is one of the most important assets for building your retirement fund. Beginning sooner rather than later not only helps you grow a larger nest egg but also lowers the stress of catching up later in life. This is why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund can have a significant impact on the savings you’ll have when you stop working. The main reason is compound interest—the powerful process where your investments earn returns, and those returns, in turn, generate even more returns. The more time your money has to grow, the more significant the impact of compounding.
Example: Taylor and Alex 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 puts away $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex contributes $180,000 and achieves a total of $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 can lead to significant growth. Here’s a simple scenario showing the impact of consistent growth:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an average annual return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month yields only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
Starting sooner, the lower your annual savings needs each year to meet your retirement goals.
*The numbers shown in this scenario are estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. The scenarios provided are for illustrative purposes only and are not a promise of future results. Outcomes may change based on variables including market conditions, fees, and personal factors. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Oklahoma City, OK, it can be tempting to put more emphasis on reinvesting in your business rather than saving for retirement. However, starting a plan now gives you the chance to:
- Take advantage of tax-deferred growth or withdrawals without taxes later on.
- Take advantage of adjustable savings that change with your cash flow.
- Create a financial cushion that ensures stability, no matter how your business develops.
Starting early, the less you’ll need to worry about playing catch-up later in life. Building your retirement savings today means managing your financial future and allowing yourself the opportunity to turn your attention to your goals—both for your retirement years and your Oklahoma City, OK business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for those working for themselves in Oklahoma City, OK, each offering its own benefits and trade-offs. A financial advisor is available to help you evaluate the pros and cons of each choice and choose the one most suitable for your circumstances. Typically, your self-employed retirement plan options in Oklahoma City, OK are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that include key tax perks. In a standard IRA, the money you contribute is often tax-deductible, and investment earnings grow tax-deferred, but withdrawals in retirement are taxable. In contrast, with Roth IRAs, you contribute from post-tax earnings, but eligible distributions during retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals don’t incur penalties as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are available to anyone with a source of 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: SEP IRAs is a retirement plan that allows those who are self-employed to save a percentage of their net business profits. Contributions are strictly employer contributions an employer, so, as a self-employed individual, you (the employee) would not be able to contribute more than the 25% you (the employer) have designated. 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 companies with fluctuating revenue streams. Compared to other retirement options, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs operate like conventional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Both employers and self-employed individuals can set up 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 contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan intended for businesses without employees or where the only employee is a spouse. Solo 401(k)s function similarly to traditional employer-managed 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This offers more savings compared to SEPs or IRAs; however, the increased savings potential often come with more limited investment options. Using a solo 401(k), you can make either traditional or Roth deferrals, which offer the same tax benefits as their IRA contribution counterparts.
Eligibility: Solo 401(k)s are available solely to business owners and their spouses may establish 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 earned income from self-employment, up to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you're over 50, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) are limited to 25% of your net self-employment income, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
Total contributions are capped at $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 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 lets individuals clearly understand exactly how much they'll receive in retirement. This strategy is best suited for high-earning self-employed individuals who are focused on saving a substantial amount for retirement and can commit to making sizeable contributions. Contributions are tax deferred, and withdrawals are taxable as income upon retirement.
Eligibility: Self-employed professionals managing a one-person company or with a small staff of under five can open 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 include:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Organizations that already put in 3-4% and are willing to do more
- Companies that have demonstrated consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The cap on contributions must be determined by an actuary determined by your income, age, and retirement goals. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Oklahoma City, OK for Your Self-Employed Retirement Plan
Working with a financial advisor in Oklahoma City, OK focused on self-employed retirement strategies can be an invaluable resource for those working for themselves. They offer the knowledge to assist guide you through the challenges of retirement planning and develop a personalized approach that reflects your aspirations. Your advisor in Oklahoma City, OK will evaluate your financial situation, understand your risk tolerance, and help you in making informed decisions 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 fit you personally even further
- Formalize a plan in writing as required by IRS rules
- Organize a trust plan to manage your assets
- Help you understand the plan's terms
- Review and modify your plan when necessary
- 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 Oklahoma City, OK: Correct Capital's Process
Oklahoma City, OK business owners who lack the time, interest, or knowledge to manage their retirement savings strategy themselves can become overwhelmed by their options. Through our team at Correct Capital, our Oklahoma City, OK financial advisors handle the majority of your retirement strategy for you, to help make 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 four simple steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can determine if we're suited to your needs for you and your business. This brief introduction allows us to get a sense of your goals with zero commitment or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll request information, including whether you have employees, your existing financial picture, and your long-term savings targets. This allows us to put together a personalized strategy that aligns with your goals.
- Review Your Plan: When we finalize a plan from the information you provide, we'll sit down with you and discuss your plan step by step to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can begin contributing. Throughout our relationship, we'll check in and track your progress to keep it tailored to your evolving circumstances.
Our Oklahoma City, OK financial advisors and retirement plan consultants are fiduciary advisors, which means they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Oklahoma City, OK include:
- Independent Financial Advisor
- 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 Oklahoma City, OK
You don't see your business as "just a business", and your Oklahoma City, OK financial advisors should provide more than basic financial recommendations. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to deliver customized self-employed retirement plans. We offer all our Oklahoma City, OK clients our I.O.U. promise: all guidance we provide 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.
