Self-employed retirement plans Ontario, CA. The flexibility of being your own boss in Ontario, CA is one of the greatest advantages of having a self-directed career. Even so, this independence can come with potential drawbacks, particularly in terms of retirement savings, since you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider understanding their retirement options. In addition to enjoying a more comfortable retirement, seeking advice from a financial advisor in Ontario, CA to set up your self-employed retirement plan offers significant tax advantages that enable both you and your business to thrive.
Few Ontario, CA investment consulting and retirement planning firms are as attuned to the requirements of self-employed individuals better than 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 are deeply experienced in supporting entrepreneurs with their retirement planning needs. We recognize that your professional and personal aspirations go far beyond simple financial figures, and we strive to provide personalized solutions to meet your unique goals. Read on to discover about your self-employed retirement plan options in Ontario, CA, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Ontario, CA today.
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Why Ontario, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver immediate benefits today. Offering flexibility in contributions to significant tax savings, working with a financial advisor in Ontario, CA helps you customize your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
If your income changes over time, a plan like a SEP IRA or Solo 401(k) offers the flexibility to adjust how much you save:
- Customizable Contributions: Save extra during successful years and scale back when income is lower, so that your plan fits your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw without tax penalties in the future—a wise move if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed provide powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, allowing you to keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to compound.
- State-Specific Incentives: In some states, you might access additional tax breaks as a self-employed individual. These state-level incentives 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 contributed a retirement plan, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future requires more than how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Allocating your investments across varied stocks, bonds, and alternatives serves to mitigate financial risk while still growing your nest egg.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund ensures you don’t using your retirement funds during financial hardships and incurring penalties.
Plan for the Future of Your Ontario, CA Business
Preparing for retirement also helps you prepare for what’s next with your Ontario, CA business:
- Selling Your Business: If you’re planning to sell, plans like SEP IRAs or Solo 401(k)s remain your personal assets and don’t transfer with the business. These savings ensure the financial stability you’ll need later on. 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., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you might face when you transfer your business.
- Succession Planning: For those winding down or handing over their business, your nest egg offer financial security through the transition. You might want to partner with a financial advisor experienced in both succession and retirement strategies to help with taxes associated with the transaction.
With the best-fit retirement strategy, you manage your financial future, cut down your tax obligations, and create a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Ontario, CA Now?
Time remains one of the most valuable resources in retirement planning. Starting early not only lets you accumulate a more substantial retirement fund but also lowers the financial burden of playing catch-up as you get older. This is why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings may cause a major impact on the amount you’ll have when you reach retirement age. The primary reason is compound interest—the powerful process where your investments earn returns, and those returns, in turn, earn even more returns. The more time your money has to grow, the larger the impact of compounding.
Example: Taylor and Alex are both self-employed professionals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor waits until age 40 but contributes $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 puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time may result in 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 end up with $497,303.29* by age 65.
- Starting at age 35: Saving the same $200 per month leaves you with only $235,412.97* by age 65—a shortfall of over $260,000, simply due to a 10-year delay.
Saving early, the less effort required each year to achieve your retirement goals.
*The numbers shown in this scenario represent estimates generated with NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. The scenarios provided are for illustrative purposes only and do not guarantee future performance. Your individual results may differ due to factors such as market conditions, fees, and individual circumstances. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in Ontario, CA, it is often the case that you focus more on reinvesting in your business rather than saving for retirement. That said, beginning a plan now allows you to:
- Take advantage of tax-deferred growth or penalty-free withdrawals in the future.
- Benefit from contribution flexibility that adapt to your earnings.
- Create a financial cushion that provides security, no matter how your business changes.
The sooner you start, the less you’ll have to worry about catching 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 golden years and your Ontario, CA business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for those working for themselves in Ontario, CA, each with its own benefits and trade-offs. A financial advisor will guide you to evaluate the pros and cons of each choice and determine the one ideal for your needs. In most cases, your self-employed retirement plan options in Ontario, CA are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that provide key tax perks. In a standard 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 from post-tax earnings, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, traditional and Roth IRAs are accessible for individuals with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that enables self-employed individuals to set aside a portion of their self-employment income. Contributions are strictly employer contributions an employer, so, as a sole proprietor, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) allocate. If you have employees, you are obligated 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 is a good option for entrepreneurs facing fluctuating revenue streams. In contrast to some alternatives, SEP IRAs are free of costly startup or administrative fees.
SEPs work like standard IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed can set up 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), also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed designed for companies that have no employees or if the only employee is your spouse. This type of plan operate much like traditional employer-managed 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This provides more savings versus SEPs or IRAs; however, the increased savings potential can be balanced by more restricted investment choices. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which have the same tax benefits as their IRA contribution counterparts.
Eligibility: Solo 401(k)s are available solely to business owners and their spouses are eligible to open and contribute to a solo 401(k).
Contribution Limits: If you are self-employed with a solo 401(k) plan, you have the ability to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your self-employment income, capped at 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.
- Employer profit-sharing contributions (as an employer) must not surpass 25% of your net earnings from self-employment, which is calculated as net profits less half of your self-employment tax and the deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (as of 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan represents a type of retirement plan that guarantees a fixed, predetermined benefit to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but lets individuals clearly understand the precise amount they'll receive in retirement. This plan is recommended for wealthier professionals who are focused on saving a substantial amount for retirement and are willing to make sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income in retirement.
Eligibility: Entrepreneurs managing a one-person company or with a small staff of under five are eligible to open an individual defined benefit plan, but it's generally advised for those over 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans are:
- Business owners or partners who want to invest more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% and are willing to do more
- Businesses showing consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The contribution limit must be determined by an actuary based on your earnings, age, and retirement objectives. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in Ontario, CA for Your Self-Employed Retirement Plan
A financial advisor in Ontario, CA specialized in self-employed retirement plans is an important asset for entrepreneurs. They offer the knowledge to assist navigate the complexities of retirement planning and craft a personalized approach that matches your objectives. Your advisor in Ontario, CA will evaluate your financial situation, identify your risk preferences, and assist you in making informed decisions about saving and investing for retirement. Included in what we do for you includes:
- Assist in selecting a plan that best fits your needs and goals
- Customize 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
- Track and fine-tune your plan when necessary
- Offer continued financial education and guidance to help you navigate your retirement journey
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Ontario, CA: Correct Capital's Process
Self-employed individuals in Ontario, CA who aren’t equipped with the time or understanding to oversee their own retirement planning independently often feel overwhelmed as they look at their choices. At Correct Capital, our Ontario, CA financial advisors manage the bulk of your retirement strategy for you, and strive to ensure meeting your financial objectives as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in four simple steps:
- 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 helps us get a sense of your goals with zero commitment or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll gather information, including whether you have employees, your present financial standing, and your long-term savings targets. This allows us to put together a tailored approach that aligns with your goals.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll meet with you and discuss your plan thoroughly to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can begin contributing. Throughout our relationship, we'll check in and review your strategy to ensure it stays suited to your needs.
Our Ontario, CA financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Ontario, CA 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 Ontario, CA
You don't see your business as "just a business", and your Ontario, CA financial advisors must deliver more than just good financial guidance. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to provide customized self-employed retirement plans. All our clients in Ontario, CA benefit from our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
