Self-employed retirement plans Omaha, NE. The freedom of running your own company in Omaha, NE offers many benefits of working for yourself. That said, this flexibility sometimes brings with potential drawbacks, notably in terms of building your retirement fund, because you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from exploring their options. In addition to achieving a more secure retirement, partnering with a financial advisor in Omaha, NE to set up your self-employed retirement plan can provide significant tax advantages that allow your business to grow and succeed.
Few Omaha, NE financial advisory and retirement planning firms understand the needs of entrepreneurs better than Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (learn more about our story here), and we are deeply experienced in helping businesses with their retirement planning needs. We know that your goals for your business and retirement extend well past simple financial figures, and we strive to provide personalized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Omaha, NE, or call Correct Capital at 877-930-401k or contact us online to consult 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 not only prepare you for the future, they also provide tangible benefits today. Offering flexibility in contributions to substantial tax savings, partnering with a financial advisor in Omaha, NE helps you customize your retirement plan to suit your individual circumstances.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) provides the freedom to modify how much you save:
- Customizable Contributions: Set aside more during profitable years and reduce savings when revenues are down, so that your plan works with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw tax-free later—a smart decision if you believe your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA shrink your tax liability, helping you keep more of your income.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, which gives your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you may be eligible for additional tax breaks as a self-employed individual. These state-level incentives help make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax credit of up to 50% of the first $2,000 they contribute a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement goes beyond just how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Allocating your investments across a mix of asset classes like stocks and bonds can help minimize exposure to risk while still growing your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net ensures you don’t using your retirement funds during financial hardships and incurring penalties.
Plan for the Future of Your Omaha, NE Business
Preparing for retirement enables you to plan ahead for what’s next with your Omaha, NE business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s stay in your name and don’t transfer with the business. These accounts ensure the reliable income you’ll need in the future. Keep in mind that while selling your business results in a capital gain, contributions to retirement accounts are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, including catch-up contributions, based on plan compensation).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you might face when you pass on your business.
- Succession Planning: If you’re passing the business on, your retirement savings provide financial security during the change. You can also seek advice from a financial advisor who specializes in succession planning and retirement accounts to reduce taxes during the sale.
With the proper savings strategy, you manage your financial future, reduce your tax burden, and create a secure foundation 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 valuable factors in retirement planning. Beginning sooner rather than later not only lets you accumulate a more substantial retirement fund but also lowers the stress of saving aggressively in the future. This is why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement could lead to a substantial impact on the total you’ll have when you reach retirement age. The primary reason is compound interest—the financial principle where your investments earn returns, and those returns, subsequently, earn even more returns. The more time your money has to grow, the greater the effect 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 begins contributing $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 achieves a total of $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Even modest contributions invested steadily often create impressive growth. Here’s a simple scenario showing the effect of compound interest:
- Starting at age 25: By investing $200 per month in a retirement plan with an projected 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, just from a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to achieve your retirement goals.
*The numbers shown in this scenario are based on estimates generated with NerdWallet’s Compound Interest Calculator, based on a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. These examples are meant to provide general guidance and do not guarantee future performance. Actual results may vary based on variables including market conditions, fees, and personal factors. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in Omaha, NE, it might seem easier to prioritize reinvesting in your business instead of saving for retirement. However, starting a plan now enables you to:
- Leverage growth that is tax-deferred or tax-free withdrawals down the road.
- Benefit from contribution flexibility that align with your earnings.
- Build a long-term safety measure that ensures stability, no matter how your business changes.
The sooner you start, the less you’ll need to worry about catching up later in life. Saving for retirement now means taking control of your financial future and creating for yourself the freedom to turn your attention to your objectives—both for your golden years and your Omaha, NE business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for those working for themselves in Omaha, NE, each with its own benefits and trade-offs. A financial advisor will guide you to evaluate the advantages and disadvantages of each choice and determine the one ideal for your needs. In most cases, your self-employed retirement plan options in Omaha, NE include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include specific tax advantages. In a traditional IRA, the money you contribute is often tax-deductible, and investment earnings grow tax-deferred, but retirement distributions are taxed as income. In contrast, Roth IRA contributions from post-tax earnings, but eligible distributions during retirement, including earnings, are not taxed. In both types of accounts, withdrawals don’t incur penalties as long as you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, IRAs, including traditional and Roth options are accessible for individuals with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA offers a way to save for retirement that allows those who are self-employed to contribute a percentage of their net earnings. 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) 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. This type of plan works well for businesses that experience fluctuating revenue streams. In contrast to some alternatives, SEP IRAs are free of expensive setup or ongoing fees.
SEPs work like traditional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
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
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), also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed designed for businesses without employees or if the only employee is your spouse. Solo 401(k)s are similar to standard 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This provides more savings than SEPs or IRAs; however, the increased savings potential may be offset by more constrained investment avenues. With this type of plan, 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 are allowed to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, capped at the annual contribution limit. The contribution limits for 2025 include $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) are limited to 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the deferrals you made.
Total contributions are capped at $70,000, or $77,500 if you're over age 50 (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans represents a type of retirement plan that guarantees a fixed, predetermined benefit to business owners upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but lets individuals clearly understand the precise amount they'll get in retirement. This strategy is recommended for wealthier professionals who are focused on saving a large amount for retirement and are prepared to contribute larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxable 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 people above age 50 who make $250,000 or more annually. In most cases, good candidates for defined benefit plans tend to be:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% but are open to increasing contributions
- Companies with proven consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The cap on contributions requires calculation from an actuary using your earnings, age, and retirement objectives. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Omaha, NE for Your Self-Employed Retirement Plan
Partnering with an advisor in Omaha, NE experienced with retirement plans for the self-employed serves as an important asset for entrepreneurs. They bring the skills needed to navigate the complexities of retirement planning and craft a tailored strategy that aligns with your goals. Your advisor in Omaha, NE will review your finances, determine how much risk you’re comfortable with, and assist you in selecting the best options about saving and investing for retirement. A key part of what we do for you features:
- Help you choose a plan that suits your unique requirements
- Tailor the plan to fit you personally even further
- Adopt 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
- Deliver continuous support and financial insights throughout your retirement planning process
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Omaha, NE: Correct Capital's Process
Self-employed individuals in Omaha, NE who lack the time, interest, or knowledge to handle their retirement savings strategy on their own may end up overwhelmed when faced with their choices. With Correct Capital, our Omaha, NE financial advisors manage the bulk of your retirement strategy for you, to help make 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 four simple steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can determine if our services align for you and your business. This brief introduction allows us to learn about your needs with zero commitment or extensive time commitment on your part.
- Gather Information: If we both decide to move forward, we'll request information, including your employee count, your existing financial picture, and your future objectives. This enables us to craft a custom plan that aligns with your goals.
- Review Your Plan: After we put together a plan based on the information you provide, we'll meet with you and review your plan in detail to help you fully grasp it and show how it aligns with your goals.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can start saving. Over the course of our partnership, we'll check in and track your progress to keep it tailored to your evolving circumstances.
Our Omaha, NE financial advisors and retirement plan consultants are fiduciary advisors, which means they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Omaha, NE 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 Omaha, NE
Your business isn't "just a business" to you, and your Omaha, NE financial advisors should provide more than just good financial guidance. With Correct Capital, we make it a priority to understand our clients and their businesses to create customized 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 get started on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
