Self-employed retirement plans Orlando, FL. The freedom of being your own boss in Orlando, FL is one of the best aspects of having a self-directed career. However, this freedom sometimes brings with potential drawbacks, notably when it comes to planning for retirement, because you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider understanding their retirement options. In addition to achieving a more comfortable retirement, seeking advice from a financial advisor in Orlando, FL to set up your self-employed retirement plan can provide significant tax advantages that allow you to move your business forward.
Few Orlando, FL financial advisory and retirement planning firms understand the needs of self-employed individuals as well as 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 assisting business owners in their retirement planning needs. We understand that your goals for your business and retirement extend well past just monetary concerns, and we strive to create tailored solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Orlando, FL, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Orlando, FL today.
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Why Orlando, FL Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also offer tangible benefits today. Offering flexibility in contributions to considerable tax savings, working with a financial advisor in Orlando, FL allows you to design your retirement plan to align with your specific needs.
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 tailor how much you save:
- Customizable Contributions: Set aside more during high-income years and reduce savings when revenues are down, so your plan aligns with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you pay taxes on contributions now, so you can withdraw tax-free later—a smart decision if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to grow.
- State-Specific Incentives: Based on your location, you might access extra deductions as a business owner. These local incentives help make these plans even more beneficial.
- 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 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 linked to the way you invest:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and other assets serves to reduce risk while still growing your savings.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net helps you avoid dipping into savings during financial hardships and facing tax penalties.
Plan for the Future of Your Orlando, FL Business
A thoughtful retirement strategy also helps you plan ahead for what’s next with your Orlando, FL business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These accounts offer the steady income you’ll need during retirement. It’s important to note that while selling a business often leads to a capital gain, deposits into these plans are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or up to $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Using retirement contributions wisely can reduce the taxes you’ll owe when you sell your business.
- Succession Planning: If you’re passing the business on, your retirement savings ensure a stable foundation through the transition. You may also seek advice from a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens on the sale.
With the right retirement plan, you can take control of your financial future, lower your tax bill, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Orlando, FL Now?
There’s no denying that time is one of the most crucial assets for building your retirement fund. Starting early not only helps you grow a more substantial retirement fund but also reduces the financial burden 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 may cause a major impact on the savings you’ll have when you stop working. The primary reason is compound interest—the concept where your investments grow, and those returns, subsequently, generate even more returns. The more time your money has to grow, the larger the effect 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 initiates savings of $5,000 annually at age 30.
- Taylor waits until age 40 but saves $7,500 annually to bridge the gap.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and ends up with $691,184.39*.
- Taylor invests $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently often create substantial growth. Here’s a simple scenario showing the impact 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 accumulate $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 gap of over $260,000, just from a 10-year delay.
Saving early, the less effort required each year to meet your retirement goals.
*The numbers shown in this scenario represent estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is meant to provide general guidance and cannot predict actual future outcomes. Actual results may vary depending on factors such as market conditions, fees, and individual circumstances. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Orlando, FL, it can be tempting to prioritize reinvesting in your business rather than saving for retirement. That said, initiating a plan now allows you to:
- Benefit from tax-free future growth or withdrawals without taxes down the road.
- Enjoy contribution flexibility that align with your earnings.
- Establish a financial cushion that offers peace of mind, no matter how your business evolves.
Getting started now, the less you’ll have to worry about making up for lost time later in life. Saving for retirement now means taking control of your financial future and giving yourself the opportunity to turn your attention to your objectives—both for your future retirement and your Orlando, FL business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for entrepreneurs in Orlando, FL, each with its own benefits and trade-offs. A financial advisor can help you understand the pros and cons of each option and choose the one ideal for your needs. In most cases, your self-employed retirement plan options in Orlando, FL are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that include key tax perks. In a traditional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but money taken out during retirement are subject to income tax. In contrast, with Roth IRAs, you contribute from post-tax earnings, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, both traditional and Roth IRAs are available to anyone with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA serves as a retirement savings option that enables 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) would not be able to contribute 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. You have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA may be ideal for entrepreneurs facing periods of inconsistent earnings. In contrast to some alternatives, SEP IRAs are free of costly startup or administrative fees.
SEPs operate like standard IRAs, where you contribute pre-tax dollars 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 the lesser of:
- 25% of compensation, or
- $70,000 for 2025
For self-employed individuals, the allowable contribution 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 retirement savings plan designed for businesses with no employees or where the only employee is a spouse. This type of plan function similarly to employer-sponsored 401(k) plans, and allow you to contribute as both an employer and an employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the additional opportunities may be offset by more limited investment options. 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: 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: If you are self-employed with a solo 401(k) plan, you have the ability to make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employed earnings, up to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your adjusted self-employment income, which is calculated as net profits less 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 (as of 2025), $81,250 if you attain age 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. As opposed to defined contribution plans, this plan is not influenced by market performance, but enables participants to determine the precise amount they'll get in retirement. This option is ideal for high-earning entrepreneurs who want to save a significant sum for retirement and are prepared to contribute larger deposits. Contributions are tax deferred, and withdrawals incur taxes as income during retirement.
Eligibility: Entrepreneurs running an owner-only business or with a small staff of under five 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. In most cases, good candidates for defined benefit plans tend to be:
- Partners or owners who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% and are willing to do more
- Organizations with proven consistent profit patterns
- Entrepreneurs over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution is calculated by an actuary based on your earnings, age, and retirement objectives. Contribution limits change annually.
The Importance of a Financial Advisor in Orlando, FL for Your Self-Employed Retirement Plan
A financial advisor in Orlando, FL specialized in self-employed retirement plans is an essential partner for self-employed individuals. They bring the skills needed to navigate the complexities of retirement planning and craft a tailored strategy that matches your objectives. Your advisor in Orlando, FL will review your finances, identify your risk preferences, and guide you in selecting the best options about saving and investing for retirement. Included in what we do for you features:
- Guide you in choosing a plan that best fits your needs and goals
- Customize the plan to your specific situation even further
- Create a written plan that complies with IRS regulations
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Review and modify your plan to keep it aligned with your goals
- Provide ongoing education and advice throughout your retirement planning process
- Boost your retirement earnings by making the most of your social security
Self-Employed Retirement Plans in Orlando, FL: Correct Capital's Process
Self-employed individuals in Orlando, FL who aren’t equipped with the time or understanding to handle their retirement savings strategy independently often feel overwhelmed as they look at their choices. Through our team at Correct Capital, our Orlando, FL financial advisors manage the bulk of your retirement strategy for you, to help make meeting your future savings targets as easy as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can help understand if we're suited to your needs for you and your business. This initial call allows us to 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 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: Once we've developed a plan using the information you provide, we'll sit down with you and review your plan step by step to ensure you understand 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 initiate your savings journey. As time goes on, we'll meet with you and monitor your plan to keep it tailored to your evolving circumstances.
Our Orlando, FL financial advisors and retirement plan consultants act as fiduciary advisors, which means they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Orlando, FL 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 Orlando, FL
You don't see your business as "just a business", and your Orlando, FL financial advisors need to offer more than simply sound financial advice. At Correct Capital, we focus on building a relationship with our clients and their businesses to create customized self-employed retirement plans. We offer all our Orlando, FL clients our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To begin on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
