Self-employed retirement plans Omaha, NE. The flexibility of owning your own business in Omaha, NE offers many benefits of having a self-directed career. Even so, this flexibility can come with potential drawbacks, especially regarding building your retirement fund, since you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider understanding their retirement options. In addition to having a more secure retirement, working with a financial advisor in Omaha, NE to create your self-employed retirement plan can provide significant tax advantages that enable you to move your business forward.
Few Omaha, NE wealth management and retirement planning firms truly grasp the challenges faced by entrepreneurs 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 Correct Capital take pride in helping businesses with their retirement planning needs. We recognize that your business and retirement aspirations extend well past basic numbers, and we strive to create customized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Omaha, NE, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Omaha, NE today.
Why Omaha, NE Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver tangible benefits today. With customizable contribution options to considerable tax savings, working with a financial advisor in Omaha, NE allows you to customize your retirement plan to align with your unique financial situation.
Flexibility That Fits Your Income
If your income changes annually, a plan like a SEP IRA or Solo 401(k) provides the flexibility to adjust how much you save:
- Customizable Contributions: Save extra during profitable years and reduce savings when revenues are down, so your plan works with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw without tax penalties in the future—an advantageous choice if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans deliver significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA shrink your tax liability, allowing you to keep more of your earnings.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, giving your money more time to grow.
- State-Specific Incentives: Based on your location, you may be eligible for extra credits as a self-employed individual. These local incentives make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can take advantage of a credit of up to 50% of the first $2,000 contributed a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future 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 asset classes like stocks and bonds is a smart way to reduce risk while still growing your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund prevents you from dipping into savings during tough times and facing tax penalties.
Plan for the Future of Your Omaha, NE Business
Retirement planning also helps you think through what’s next with your Omaha, NE business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These savings offer the reliable income you’ll need later on. Keep in mind that while selling your business results in a capital gain, contributions to retirement accounts are capped at annual limits (e.g., a maximum of $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you’ll owe when you transfer your business.
- Succession Planning: If you’re passing the business on, your retirement accounts provide financial security during the change. You can also seek advice from a financial advisor experienced in both succession and retirement strategies to reduce taxes during the sale.
With the proper savings strategy, you can take control of your financial future, reduce your tax burden, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Omaha, NE Now?
There’s no denying that time is one of the most crucial assets when it comes to saving for retirement. Getting a head start not only allows you to build a bigger financial cushion but also lowers the stress of catching up later in life. Here’s why it makes sense to begin today:
The Cost of Waiting
Waiting to start your retirement fund may cause a substantial impact on the amount you’ll have when you stop working. The primary reason is compound interest—the powerful process where your investments generate earnings, and those returns, then, earn even more returns. The longer your money has to grow, the larger the effect of this growth.
Example: Alex and Taylor are both entrepreneurs. Their shared goal is to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor delays savings until age 40 but saves $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions made consistently often create substantial growth. Take a look at this scenario showing the power of compounding:
- 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 difference of over $260,000, simply due to a 10-year delay.
Starting sooner, the less you need to save each year to achieve 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. These examples are for illustrative purposes only and do not guarantee future performance. Actual results may vary based on elements like market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Omaha, NE, it is often the case that you focus more on reinvesting in your business over saving for retirement. However, initiating a plan now gives you the chance to:
- Benefit from tax-deferred growth or penalty-free withdrawals later on.
- Benefit from contribution flexibility that change with your earnings.
- Establish a financial cushion that provides security, no matter how your business develops.
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 creating for yourself the opportunity to concentrate on your dreams—both for your retirement years and your Omaha, NE business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for those working for themselves in Omaha, NE, each offering its own benefits and trade-offs. A financial advisor is available to help you understand the advantages and disadvantages of each choice and identify the one most suitable for your needs. Generally speaking, your self-employed retirement plan options in Omaha, NE include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that offer key tax perks. In a standard IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but withdrawals in retirement are taxable. In contrast, with Roth IRAs, you contribute from post-tax earnings, but retirement withdrawals that qualify, including earnings, are tax-free. In both cases, withdrawals are penalty-free provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, both traditional and Roth IRAs are available to anyone with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are set 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 serves as a retirement savings option that allows those who are self-employed to set aside a portion of their self-employment income. Contributions can only be made by an employer, so, as a independent business owner, you (the employee) cannot make additional contributions beyond the 25% you (the employer) already contributed. 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 works well for entrepreneurs facing cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs lack costly startup or administrative fees.
SEPs operate like conventional IRAs, where the contributions are tax-deferred and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are capped at the lower of:
- 25% of compensation, or
- $70,000 for 2025
For self-employed individuals, the contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), commonly known 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. Solo 401(k)s function similarly to standard 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This provides more savings than SEPs or IRAs; however, the additional opportunities can be balanced by more constrained investment avenues. Using a solo 401(k), you can make either traditional or Roth deferrals, which have 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:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, subject 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 individuals aged 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) must not surpass 25% of your net self-employment income, 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 if you're over age 50 (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that delivers a set amount to business owners upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but lets individuals clearly understand the precise amount they'll receive in retirement. This option is best suited for high-earning entrepreneurs who aim to accumulate a large amount for retirement and are willing to make sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income during retirement.
Eligibility: Self-employed professionals operating a solo business or employing fewer than five people are eligible to open an individual defined benefit plan, but it's typically suggested for individuals aged 50+ who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans are:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% with plans to contribute more
- Companies that have demonstrated consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The contribution limit is calculated by an actuary using your financial situation, age, and savings targets. 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 essential partner for those working for themselves. They have the expertise to help understand the intricacies of saving for retirement and develop a personalized approach that reflects your aspirations. An expert in your area will review your finances, understand your risk tolerance, and guide you in selecting the best options about saving and investing for retirement. Part of what we do for you features:
- Assist in selecting a plan that aligns with your objectives and circumstances
- Tailor the plan to your needs even further
- Adopt a written plan in accordance with IRS guidelines
- Set up an asset trust plan
- Help you understand the plan's terms
- Review and modify your plan as needed
- Offer continued financial education and guidance as you continue on the road to retirement
- Boost your retirement earnings 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 self-employed retirement plan independently often feel overwhelmed by their options. Through our team at Correct Capital, our Omaha, NE financial advisors handle the lion's share of your retirement strategy for you, to help make meeting your retirement goals as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: In just 20 minutes, 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 get a sense of your goals with no obligation or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll gather information, including how many employees you have (if any), your current financial situation, and your future objectives. This allows us to put together a personalized strategy designed just for you.
- Review Your Plan: After we put together a plan based on the information you provide, we'll schedule a meeting and discuss your plan in detail to help you fully grasp it and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can initiate your savings journey. Throughout our relationship, we'll have regular meetings and track your progress to make sure it remains aligned with your goals.
Our Omaha, NE financial advisors and retirement plan consultants act 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 Omaha, NE 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 Omaha, NE
To you, your business is more than "just a business", and your Omaha, NE financial advisors need to offer more than basic financial recommendations. At Correct Capital, we take the time to get to know our clients and their businesses to create tailored self-employed retirement plans. All our clients in Omaha, NE benefit from 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.
