Self-employed retirement plans Omaha, NE. The independence of owning your own business in Omaha, NE offers many benefits of being self-employed. However, this freedom sometimes brings with potential drawbacks, especially when it comes to planning for retirement, as 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 understanding their retirement options. In addition to enjoying a more secure retirement, partnering with a financial advisor in Omaha, NE to establish your self-employed retirement plan delivers significant tax advantages that help your business to grow and succeed.
Few Omaha, NE financial advisory and retirement planning firms are as attuned to the requirements of small business owners better than Correct Capital. The father of our founder was a small business owner himself (check out our story here), and Correct Capital take pride in supporting entrepreneurs with their retirement planning needs. We know that your professional and personal aspirations go far beyond just monetary concerns, and we strive to provide customized solutions that reflect your objectives. Continue exploring to find out about your self-employed retirement plan options in Omaha, NE, or reach out to Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Omaha, NE today.
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Why Omaha, NE Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also offer tangible benefits today. Offering flexibility in contributions to substantial tax savings, partnering with a financial advisor in Omaha, NE enables you to create your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
If your income changes from year to year, a plan like a SEP IRA or Solo 401(k) gives you the option to tailor how much you save:
- Customizable Contributions: Contribute more during high-income years and cut back when income is lower, ensuring your plan works with 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 will increase in the future.
Save Money on Taxes
Plans designed for the self-employed deliver significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, so you can keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for extra tax breaks as a sole proprietor. These regional incentives can 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, 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: Spreading your investments across varied asset classes like stocks and bonds serves to mitigate financial risk while continuing to build your nest egg.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business prevents you from dipping into savings during tough times and risking extra costs.
Plan for the Future of Your Omaha, NE Business
A thoughtful retirement strategy enables you to prepare for what’s next with your Omaha, NE business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These savings ensure the steady income you’ll need during retirement. Remember that while selling a business often leads to a capital gain, deposits into these plans are restricted by contribution limits (e.g., a maximum of $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Using retirement contributions wisely helps lower the taxes you might face when you sell your business.
- Succession Planning: If you’re passing the business on, your retirement accounts offer financial security through the transition. You might want to partner with a financial advisor experienced in both succession and retirement strategies to minimize tax burdens associated with the transaction.
With the proper savings strategy, you can take control of your financial future, lower your tax bill, and create a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Omaha, NE Now?
Time remains one of the most crucial assets when it comes to saving for retirement. Beginning sooner rather than later not only allows you to build a more substantial retirement fund but also minimizes the pressure of catching up later in life. Here’s why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings could lead to a substantial impact on the total you’ll have when you retire. The primary reason is compound interest—the concept where your investments generate earnings, and those returns, subsequently, earn even more returns. The greater time span your money has to grow, the more significant the benefit of this compounding process.
Example: Taylor and Alex are both self-employed individuals. Their shared goal is 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 bridge the gap.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings invested steadily often create substantial growth. Here’s a simple scenario showing the effect 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 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, all because of a 10-year delay.
Saving early, the less you need to save each year to meet your retirement goals.
*These calculations represent estimates calculated using NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. The scenarios provided are intended as illustrative examples and do not guarantee future performance. Actual results may vary due to variables including market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Omaha, NE, it can be tempting to prioritize reinvesting in your business over saving for retirement. That said, starting a plan now enables you to:
- Benefit from tax-free future growth or penalty-free withdrawals later on.
- Enjoy adjustable savings that adapt to your income.
- Create a safety net that provides security, no matter how your business evolves.
The sooner you start, the less you’ll need to worry about catching up later in life. Taking steps toward your retirement goals today means gaining control over your financial future and allowing yourself the ability to turn your attention to your goals—both for your retirement years and your Omaha, NE business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for entrepreneurs in Omaha, NE, each with its own benefits and trade-offs. A financial advisor is available to help you learn about the benefits and drawbacks of each choice and identify the one ideal for your circumstances. In most cases, your self-employed retirement plan options in Omaha, NE include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that include distinct tax benefits. In a conventional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but withdrawals in retirement are taxed as income. In contrast, Roth IRAs require contributions using income already taxed, but eligible distributions during retirement, including earnings, are not taxed. In both cases, withdrawals come without penalties if 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 capped at $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 is a retirement plan that permits entrepreneurs to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a sole proprietor, you (the employee) cannot make additional contributions above the 25% you (the employer) already contributed. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. It's your choice whether to contribute a fixed dollar figure or a percentage of wages to employee accounts. SEP IRAs works well for companies with fluctuating revenue streams. Compared to other retirement options, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs operate like traditional IRAs, where the contributions are tax-deferred 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 must not exceed:
- 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: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed intended for businesses without employees or where the only employee is a spouse. Solo 401(k)s operate much like employer-sponsored 401(k) plans, and allow you to contribute 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 may be offset by 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: Solo 401(k)s are available solely to business owners and their spouses can set up and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you can make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your self-employment income, up 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 those who turn 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 deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for individuals aged 50+ (in 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans represents a type of retirement plan that guarantees a set amount to business owners upon retirement. As opposed to defined contribution plans, this plan is not influenced by market performance, but enables participants to determine exactly how much they'll have in retirement. This option is best suited for higher-income professionals who are focused on saving a large amount for retirement and are willing to make sizeable contributions. Contributions are tax deferred, and withdrawals are taxable as income upon retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees may establish an individual defined benefit plan, but it's generally advised for people above age 50 who generate a minimum of $250,000 yearly. 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+)
- Businesses currently investing 3-4% with plans to contribute more
- Companies that have demonstrated consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution is calculated by an actuary determined by your earnings, age, and retirement objectives. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Omaha, NE for Your Self-Employed Retirement Plan
Working with a financial advisor in Omaha, NE specialized in self-employed retirement plans is an invaluable resource for entrepreneurs. They offer the knowledge to assist understand the intricacies of saving for retirement and craft a tailored strategy that reflects your aspirations. An expert in your area will evaluate your financial situation, understand your risk tolerance, and guide you in making informed decisions about saving and investing for retirement. Included in what we do for you includes:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Customize the plan to fit you personally even further
- Create a written plan that complies with IRS regulations
- Organize a trust plan to manage your assets
- Ensure you comprehend 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
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Omaha, NE: Correct Capital's Process
Omaha, NE business owners who aren’t equipped with the time or understanding to oversee their own retirement planning independently can become overwhelmed by their choices. Through our team at Correct Capital, our Omaha, NE financial advisors manage the bulk of your retirement strategy for you, to help make meeting your retirement goals as easy as possible for you. We can help you get set 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 help understand if we're a good fit for you and your business. This short conversation helps us get a sense of your goals with no obligation or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including whether you have employees, your current financial situation, and your future objectives. This helps us create a tailored approach suited specifically for your needs.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll sit down with you and go over your plan thoroughly to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can initiate your savings journey. As time goes on, we'll meet with you and track your progress to ensure it stays suited to your needs.
Our Omaha, NE financial advisors and retirement plan consultants are fiduciary advisors, meaning they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Omaha, NE 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 Omaha, NE
You don't see your business as "just a business", and your Omaha, NE financial advisors should provide more than just good financial guidance. With Correct Capital, we take the time to get to know our clients and their businesses to deliver customized self-employed retirement plans. All our clients in Omaha, NE benefit from our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
