Self-employed retirement plans Oklahoma City, OK. The independence of running your own company in Oklahoma City, OK is one of the greatest advantages of having a self-directed career. Even so, this independence sometimes brings with potential drawbacks, especially regarding building your retirement fund, as you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off looking into other possibilities. In addition to enjoying a more comfortable retirement, seeking advice from a financial advisor in Oklahoma City, OK to establish your self-employed retirement plan delivers significant tax advantages that allow your business to grow and succeed.
Few Oklahoma City, OK wealth management and retirement planning firms are as attuned to the requirements of self-employed individuals better than Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and Correct Capital take pride in supporting entrepreneurs with their retirement planning needs. We know that your business and retirement aspirations aren’t limited to basic numbers, and we are dedicated to offer customized 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 speak with a small business financial advisor in Oklahoma City, OK today.
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 deliver real benefits today. Offering flexibility in contributions to considerable tax savings, working with a financial advisor in Oklahoma City, OK helps you customize your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
If your income changes annually, a plan like a SEP IRA or Solo 401(k) offers the freedom to tailor how much you save:
- Customizable Contributions: Contribute more during high-income years and cut back when revenues are down, so that your plan aligns with your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you pay taxes on contributions now, so you can withdraw your savings tax-free down the road—a smart decision if you believe your tax rate is likely to rise in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA shrink your tax liability, so you can keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to grow.
- State-Specific Incentives: Based on your location, you may be eligible for state-specific deductions as a sole proprietor. These regional incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can take advantage of a credit of up to 50% of the first $2,000 they contribute a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future goes beyond just 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 minimize exposure to risk while continuing to build your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net ensures you don’t using your retirement funds during challenging periods and incurring penalties.
Plan for the Future of Your Oklahoma City, OK Business
Preparing for retirement can assist you plan ahead for what’s next with your Oklahoma City, OK business:
- Selling Your Business: If you’re planning to sell, plans like SEP IRAs or Solo 401(k)s remain yours and don’t transfer with the business. These plans can provide the reliable income you’ll need in the future. Keep in mind that while selling a business often leads to a capital gain, deposits into these plans are subject to yearly maximums (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, based on plan compensation).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you’ll owe when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement savings provide a stable foundation through the transition. You might want to seek advice from a financial advisor with expertise in succession and retirement planning to minimize tax burdens on the sale.
With the best-fit retirement strategy, you gain control over your financial future, cut down your tax obligations, and build a strong framework 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 when it comes to saving for retirement. Getting a head start not only helps you grow a bigger financial cushion but also lowers the pressure of playing catch-up as you get older. Here’s why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement can have a substantial impact on the amount you’ll have when you retire. The biggest reason is compound interest—the financial principle where your investments generate earnings, and those returns, subsequently, generate even more returns. The more time your money has to grow, the larger the impact of this growth.
Example: Taylor and Alex are both self-employed professionals. Both of them want to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but saves $7,500 annually to make up for lost time.
By age 65, with an assumption of 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time may result in significant growth. Here’s a simple scenario showing the power of compound interest:
- Starting at age 25: If you invest $200 per month in a retirement plan with an projected return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month would result in only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
The earlier you begin, the less you need to save each year to achieve your retirement goals.
*The numbers shown in this scenario are based on estimates derived from NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. The scenarios provided are intended as illustrative examples and are not a promise of future results. Outcomes may change depending on factors such as market conditions, fees, and personal factors. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
For self-employed individuals in Oklahoma City, OK, it might seem easier to put more emphasis on reinvesting in your business over saving for retirement. Even so, starting a plan now allows you to:
- Take advantage of tax-deferred growth or tax-free withdrawals down the road.
- Take advantage of flexible contributions that adapt to your income.
- Establish a safety net that provides security, no matter how your business changes.
The sooner you start, the less you’ll be required to worry about making up for lost time later in life. Building your retirement savings today means taking control of your financial future and giving yourself the opportunity to turn your attention to your objectives—both for your retirement years and your Oklahoma City, OK business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for self-employed individuals 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 needs. In most cases, your self-employed retirement plan options in Oklahoma City, OK consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include key tax perks. In a conventional IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but money taken out during retirement are subject to income tax. In contrast, Roth IRAs require contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are tax-free. In both types of accounts, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are open to those with taxable earnings.
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: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that permits self-employed individuals to set aside a portion of their self-employment income. Contributions can only be made by an employer, so, as a sole proprietor, you (the employee) cannot make additional contributions 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. It's your choice whether to contribute a set monetary value or a percentage of wages to employee accounts. SEP IRAs may be ideal for companies with periods of inconsistent earnings. Compared to other retirement options, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs work like conventional IRAs, where the contributions are tax-deferred and withdrawals are taxed as income.
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
If you’re self-employed, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, 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 when the sole employee is your spouse. This type of plan function similarly to standard 401(k) plans, and allow you to contribute as both the employer and the employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the extra savings options may be offset by more constrained investment avenues. 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 can set up and contribute to a solo 401(k).
Contribution Limits: For self-employed individuals with a solo 401(k) plan, you can 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 if you attain age 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your net earnings from self-employment, which is your net profit minus half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan offers a structured retirement solution that provides a pre-established payout to entrepreneurs upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but enables participants to determine exactly how much they'll get 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 substantial contributions. Contributions offer tax-deferred growth, and withdrawals are taxable as income upon retirement.
Eligibility: Any self-employed individual managing a one-person company or with less than five employees may establish an individual defined benefit plan, but it's most commonly advised for individuals aged 50+ who make $250,000 or more annually. In most cases, good candidates for defined benefit plans are:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% but are open to increasing contributions
- Businesses showing consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution requires calculation from an actuary based on your financial situation, age, and savings targets. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Oklahoma City, OK for Your Self-Employed Retirement Plan
A financial advisor in Oklahoma City, OK focused on self-employed retirement strategies can be an important asset for those working for themselves. They offer the knowledge to assist navigate the complexities of retirement planning and design a personalized approach that reflects your aspirations. An expert in your area will review your finances, understand your risk tolerance, and help you in choosing wisely about saving and investing for retirement. A key part of what we do for you involves:
- Help you choose a plan that aligns with your objectives and circumstances
- Tailor the plan to your needs even further
- Create a written plan in accordance with IRS guidelines
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Monitor and adjust your plan when necessary
- Offer continued financial education and guidance throughout your retirement planning process
- 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 handle their own retirement planning on their own may end up overwhelmed when faced with their available plans. Through our team at Correct Capital, our Oklahoma City, OK financial advisors handle the majority of your savings plan setup for you, and strive to ensure meeting your financial objectives as hassle-free 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 can determine if our services align for you and your business. This initial call allows us to get a sense of your goals with zero commitment or major time investment 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 retirement goals. This helps us create a custom plan that aligns with your goals.
- Review Your Plan: After we put together a plan from the information you provide, we'll schedule a meeting and review your plan in detail to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll implement the necessary steps so you can begin contributing. Throughout our relationship, we'll have regular meetings and review your strategy to keep it tailored to your evolving circumstances.
Our Oklahoma City, OK financial advisors and retirement plan consultants serve as fiduciary advisors, meaning they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Oklahoma City, OK 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 Oklahoma City, OK
To you, your business is more than "just a business", and your Oklahoma City, OK financial advisors should provide more than simply sound financial advice. With Correct Capital, we focus on building a relationship with our clients and their businesses to create personalized self-employed retirement plans. To every client in Oklahoma City, OK, we provide our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To begin on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
