Self-employed retirement plans Overland Park, KS. The independence of being your own boss in Overland Park, KS offers many benefits of having a self-directed career. Even so, this independence often comes with a lack of security, especially regarding retirement savings, 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 enjoying a more comfortable retirement, seeking advice from a financial advisor in Overland Park, KS to establish your self-employed retirement plan delivers significant tax advantages that allow you to move your business forward.
Few Overland Park, KS wealth management and retirement planning firms are as attuned to the requirements of 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 assisting business owners in their retirement planning needs. We understand that your professional and personal aspirations aren’t limited to basic numbers, and we strive to create customized solutions that reflect your objectives. Continue exploring to find out about your self-employed retirement plan options in Overland Park, KS, or reach out to Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Overland Park, KS today.
Schedule a Meeting With an Advisor Today
Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
Schedule a 15-Minute Introductory Call
More From Correct Capital Wealth Management
Explore how Correct Capital Wealth Management can help guide you toward smarter decisions, clearer goals, and lasting financial success.
Subscribe To Our Newsletter Listen To Our Podcast Watch Our YouTube Channel
Why Overland Park, KS Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also deliver immediate benefits today. From flexible contributions to considerable tax savings, working with a financial advisor in Overland Park, KS enables you to design 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 option to adjust how much you save:
- Customizable Contributions: Save extra during high-income years and scale back when your earnings dip, so that your plan works with your current income.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw without tax penalties in the future—a wise move if you believe 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 lower your taxable income, helping you keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to grow.
- State-Specific Incentives: Based on your location, you may be eligible for state-specific deductions as a business owner. These regional incentives make these plans even more valuable.
- 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
Planning for a safe retirement requires more than how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Spreading your investments across a mix of asset classes like stocks and bonds can help mitigate financial risk while helping to grow your savings.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund helps you avoid dipping into savings during tough times and risking extra costs.
Plan for the Future of Your Overland Park, KS Business
Preparing for retirement enables you to think through what’s next with your Overland Park, KS business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain your personal assets and won’t be included in the sale. These plans ensure the steady income you’ll need during retirement. It’s important to note that while selling your business results in a capital gain, retirement plan contributions are restricted by contribution limits (e.g., up to $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you are required to pay when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement savings provide a stable foundation as you make this shift. You may also seek advice from a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens associated with the transaction.
With the right retirement plan, you gain control over your financial future, reduce your tax burden, and create a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Overland Park, KS 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 larger nest egg but also lowers the financial burden of saving aggressively in the future. Here’s why it is beneficial to start now:
The Cost of Waiting
Waiting to start your retirement fund could lead to a substantial impact on the savings you’ll have when you reach retirement age. The primary reason is compound interest—the financial principle where your investments generate earnings, and those returns, in turn, earn even more returns. The greater time span your money has to grow, the greater the benefit of this compounding process.
Example: Alex and Taylor are both self-employed professionals. They each aim 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 saves $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time often create impressive growth. Here’s a simple scenario showing the effect of consistent growth:
- Starting at age 25: By investing $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 difference of over $260,000, simply due to a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to meet your retirement goals.
*The numbers shown in this scenario are based on estimates generated with NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. The scenarios provided are meant to provide general guidance and cannot predict actual future outcomes. Your individual results may differ depending on elements like 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 Overland Park, KS, it is often the case that you prioritize reinvesting in your business rather than saving for retirement. Even so, starting a plan now allows you to:
- Take advantage of growth that is tax-deferred or withdrawals without taxes down the road.
- Enjoy flexible contributions that align with your cash flow.
- Build a financial cushion that ensures stability, no matter how your business develops.
The sooner you start, the less you’ll have to worry about catching up later in life. Taking steps toward your retirement goals today means gaining control over your financial future and giving yourself the ability to concentrate on your goals—both for your retirement years and your Overland Park, KS business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for those working for themselves in Overland Park, KS, each with its own advantages and considerations. A financial advisor can help you understand the advantages and disadvantages of each option and determine the one best suited for your unique situation. Typically, your self-employed retirement plan options in Overland Park, KS consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that offer key tax perks. In a conventional 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 are made with after-tax income, but eligible distributions during retirement, including earnings, are exempt from taxes. In both cases, withdrawals come without penalties provided you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, IRAs, including traditional and Roth options are open to those with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA is a retirement plan that permits entrepreneurs to set aside a portion of their self-employment income. Contributions must come from an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role above the 25% you (the employer) allocate. If you have employees, you must contribute the same amount for them as you do for yourself. You have the flexibility to contribute a flat-dollar amount or a percentage of wages to employee accounts. This type of plan may be ideal for entrepreneurs facing fluctuating revenue streams. Unlike other plans, SEP IRAs lack costly startup or administrative fees.
SEPs work like conventional IRAs, where the contributions are tax-deferred and retirement distributions are taxable.
Eligibility: Employers of any type, including self-employed individuals can set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser 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: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan designed for companies that have no employees or where the only employee is a spouse. Solo 401(k)s function similarly to traditional employer-managed 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the extra savings options can be balanced by more restricted investment choices. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which share 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 can make two types of contributions:
- Elective 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.
- Profit-sharing contributions (as an employer) cannot exceed 25% of your adjusted self-employment income, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
Total contributions are capped at $70,000, or $77,500 for individuals aged 50+ (in 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that guarantees a set amount to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but allows self-employed individuals to know what they'll receive in retirement. This strategy is best suited for wealthier professionals who want to save a substantial amount for retirement and are willing to make sizeable contributions. Contributions offer tax-deferred growth, and withdrawals incur taxes as income in retirement.
Eligibility: Self-employed professionals operating a solo business or with less than five employees may establish an individual defined benefit plan, but it's typically advised for those over 50 who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans include:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% and are willing to do more
- Organizations with proven consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions is calculated by an actuary based on your income, age, and retirement goals. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in Overland Park, KS for Your Self-Employed Retirement Plan
A financial advisor in Overland Park, KS focused on self-employed retirement strategies is an essential partner for self-employed individuals. They have the expertise to help navigate the complexities of retirement planning and craft a tailored strategy that matches your objectives. A financial advisor in Overland Park, KS will review your finances, understand your risk tolerance, and help you in making informed decisions about saving and investing for retirement. Part of what we do for you involves:
- Assist in selecting a plan that aligns with your objectives and circumstances
- Customize the plan to your needs even further
- Formalize a plan in writing in accordance with IRS guidelines
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Review and modify your plan when necessary
- Provide ongoing education and advice to help you navigate your retirement journey
- Boost your retirement earnings by optimizing your social security benefits
Self-Employed Retirement Plans in Overland Park, KS: Correct Capital's Process
Entrepreneurs in Overland Park, KS who lack the time, interest, or knowledge to oversee their retirement savings strategy themselves may end up overwhelmed when faced with their options. With Correct Capital, our Overland Park, KS financial advisors take on the bulk of your retirement planning for you, working to make meeting your financial objectives 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: In just 20 minutes, a member of our advisor team can help understand if we're a good fit for you and your business. This short conversation lets us get a sense of your goals with no pressure or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll request information, including how many employees you have (if any), your present financial standing, and your long-term savings targets. This helps us create a custom plan suited specifically for your needs.
- Review Your Plan: After we put together a plan from the information you provide, we'll schedule a meeting and go over your plan thoroughly to ensure you understand it and show how it aligns with your goals.
- Implementation and Monitoring: When we finalize on your plan, we'll implement the necessary steps so you can begin contributing. As time goes on, we'll have regular meetings and track your progress to make sure it remains aligned with your goals.
Our Overland Park, KS financial advisors and retirement plan consultants serve 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 Overland Park, KS include:
- 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 Overland Park, KS
To you, your business is more than "just a business", and your Overland Park, KS financial advisors should provide more than basic financial recommendations. With Correct Capital, we focus on building a relationship with our clients and their businesses to deliver tailored self-employed retirement plans. To every client in Overland Park, KS, we provide our I.O.U. promise: everything we recommend 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.
