Self-employed retirement plans Plano, TX. The freedom of owning your own business in Plano, TX is one of the best aspects of having a self-directed career. That said, this independence can come with certain challenges, notably in terms of planning for retirement, since you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off exploring their options. In addition to enjoying a more secure retirement, seeking advice from a financial advisor in Plano, TX to set up your self-employed retirement plan offers significant tax advantages that allow both you and your business to thrive.
Few Plano, TX investment consulting and retirement planning firms truly grasp the challenges faced by self-employed individuals as well as Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and we have a rich history of helping businesses with their retirement planning needs. We recognize that your professional and personal aspirations go far beyond basic numbers, and we work tirelessly to create tailored solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Plano, TX, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Plano, TX today.
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Why Plano, TX 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. From flexible contributions to significant tax savings, working with a financial advisor in Plano, TX enables you to customize your retirement plan to align with your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary from year to year, a plan like a SEP IRA or Solo 401(k) gives you the option to modify how much you save:
- Customizable Contributions: Set aside more during profitable years and scale back when your earnings dip, so that your plan aligns with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, so you can withdraw without tax penalties in the future—a smart decision if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, helping you keep more of your income.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, giving your money more time to compound.
- State-Specific Incentives: In some states, you could qualify for extra deductions as a sole proprietor. These regional incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can take advantage of a credit of up to 50% of the first $2,000 they contribute 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: Allocating your investments across different asset classes like stocks and bonds serves to mitigate financial risk while helping to grow your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund prevents you from tapping into your nest egg during financial hardships and facing tax penalties.
Plan for the Future of Your Plano, TX Business
Preparing for retirement enables you to think through what’s next with your Plano, TX business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These savings ensure the reliable income you’ll need in the future. Remember that while selling your business results in a capital gain, deposits into these plans are subject to yearly maximums (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you’ll owe when you transfer your business.
- Succession Planning: For those winding down or handing over their business, your retirement savings ensure financial security as you make this shift. You might want to partner with a financial advisor who specializes in succession planning and retirement accounts to reduce taxes associated with the transaction.
With the right retirement plan, you gain control over your financial future, cut down your tax obligations, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Plano, TX Now?
Time remains one of the most crucial resources for building your retirement fund. Starting early not only allows you to build a bigger financial cushion but also lowers the financial burden of playing catch-up as you get older. This is why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement can have a significant impact on the savings you’ll have when you reach retirement age. The biggest reason is compound interest—the powerful process where your investments grow, and those returns, then, earn even more returns. The longer your money has to grow, the greater the effect of this growth.
Example: Taylor and Alex 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 make up for lost time.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and ends up with $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions invested steadily may result in impressive growth. Take a look at this scenario showing the effect of compound interest:
- Starting at age 25: If you invest $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 yields only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
Saving early, the lower your annual savings needs 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. These calculations involved multiplying yearly deposits by the years contributed. The scenarios provided are intended as illustrative examples and do not guarantee future performance. Actual results may vary due to elements like market conditions, fees, and personal factors. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Plano, TX, it might seem easier to put more emphasis on reinvesting in your business over saving for retirement. Even so, initiating a plan now gives you the chance to:
- Benefit from growth that is tax-deferred or penalty-free withdrawals down the road.
- Take advantage of contribution flexibility that change with your cash flow.
- Build a long-term safety measure that ensures stability, no matter how your business evolves.
Starting early, the less you’ll need to worry about catching up later in life. Building your retirement savings today means gaining control over your financial future and creating for yourself the freedom to concentrate on your goals—both for your future retirement and your Plano, TX business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for entrepreneurs in Plano, TX, each providing its own benefits and trade-offs. A financial advisor can help you evaluate the benefits and drawbacks of each plan and determine the one ideal for your circumstances. Generally speaking, your self-employed retirement plan options in Plano, TX are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that include distinct tax benefits. In a traditional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but money taken out during retirement are subject to income tax. In contrast, with Roth IRAs, you contribute are made with after-tax income, but eligible distributions during retirement, including earnings, are not taxed. In both cases, withdrawals are penalty-free 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 open to those with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set 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 is a retirement plan that permits self-employed individuals to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) would not be able to contribute more than the 25% you (the employer) have designated. If you have employees, you must 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. A SEP IRA may be ideal for companies with cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs don’t have costly startup or administrative fees.
SEPs operate like conventional IRAs, where contributions are made with pre-tax money 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 the lesser 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: A Solo 401(k) plan, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for companies that have no employees or where the only employee is a spouse. This type of plan operate much like standard 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the increased savings potential may be offset 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: This plan is exclusively for 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 are allowed to make two types of contributions:
- Employee contributions of up to 100% of your self-employment income, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 for those who turn 60-63 in 2025.
- Profit-sharing contributions (as an employer) are limited to 25% of your net self-employment income, which is calculated as net profits less half of your self-employment tax and the employee contributions you made.
Your combined contributions must not surpass $70,000, or $77,500 for individuals aged 50+ (as of 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans is a retirement option that provides a set amount to self-employed individuals upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but lets individuals clearly understand exactly how much they'll have in retirement. This plan is recommended for higher-income entrepreneurs who aim to accumulate a substantial amount for retirement and can commit to making larger deposits. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income upon retirement.
Eligibility: Entrepreneurs managing a one-person company or employing fewer than five people can open an individual defined benefit plan, but it's most commonly recommended for people above age 50 who make $250,000 or more annually. Generally, good candidates for defined benefit plans tend to be:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% but are open to increasing contributions
- Companies with proven consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The contribution limit requires calculation from an actuary based on your income, age, and retirement goals. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in Plano, TX for Your Self-Employed Retirement Plan
A financial advisor in Plano, TX specialized in self-employed retirement plans is an invaluable resource for those working for themselves. They offer the knowledge to assist understand the intricacies of saving for retirement and craft a customized plan that matches your objectives. A financial advisor in Plano, TX will review your finances, understand your risk tolerance, 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
- Customize the plan to your needs even further
- Create a written plan in accordance with IRS guidelines
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Track and fine-tune your plan as needed
- Provide ongoing education and advice to help you navigate your retirement journey
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Plano, TX: Correct Capital's Process
Entrepreneurs in Plano, TX who aren’t equipped with the time or understanding to manage their own retirement planning themselves can become overwhelmed when faced with their options. Through our team at Correct Capital, our Plano, TX financial advisors take on the lion's share of your retirement planning for you, to help make meeting your future savings targets as hassle-free as possible for you. We are here to assist you in setting up your self-employed retirement plan in just four steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if we're a good fit for you and your business. This brief introduction helps us get a sense of your goals with zero commitment or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including your employee count, your present financial standing, and your future objectives. This allows us to put together a tailored approach designed just for you.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll meet with you and go over your plan in detail to help you fully grasp it and understand how it best correlates to your needs.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can start saving. Throughout our relationship, we'll check in and review your strategy to keep it tailored to your evolving circumstances.
Our Plano, TX financial advisors and retirement plan consultants serve as fiduciary advisors, meaning they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Plano, TX 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 Plano, TX
You don't see your business as "just a business", and your Plano, TX financial advisors must deliver more than simply sound financial advice. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to create tailored self-employed retirement plans. All our clients in Plano, TX 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, call Correct Capital today at 877-930-401k or contact us online.
