Self-employed retirement plans Port St. Lucie, FL. The freedom of being your own boss in Port St. Lucie, FL is one of the greatest advantages of having a self-directed career. However, this flexibility can come with potential drawbacks, particularly regarding planning for retirement, as you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from looking into other possibilities. In addition to having a financially stable retirement, working with a financial advisor in Port St. Lucie, FL to create your self-employed retirement plan offers significant tax advantages that allow your business to grow and succeed.
Few Port St. Lucie, FL investment consulting and retirement planning firms truly grasp the challenges faced by self-employed individuals 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 have a rich history of assisting business owners in their retirement planning needs. We recognize that your business and retirement aspirations aren’t limited to simple financial figures, and we work tirelessly to provide tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Port St. Lucie, FL, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in Port St. Lucie, FL today.
Why Port St. Lucie, FL 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 tangible benefits today. From flexible contributions to considerable tax savings, consulting a financial advisor in Port St. Lucie, FL enables you to design your retirement plan to fit 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 cut back when your earnings dip, ensuring your plan fits your current income.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw without tax penalties in the future—an advantageous choice if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, allowing you to keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to grow.
- State-Specific Incentives: Depending on where you live, you may be eligible for state-specific tax breaks as a sole proprietor. These local incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can take advantage of a credit of up to 50% of the first $2,000 contributed a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future goes beyond just how much you save—it’s also about how you invest:
- Diversified Portfolios: Allocating your investments across varied asset classes like stocks and bonds serves to mitigate financial risk while helping to grow your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business prevents you from tapping into your nest egg during financial hardships and facing tax penalties.
Plan for the Future of Your Port St. Lucie, FL Business
A thoughtful retirement strategy enables you to plan ahead for what’s next with your Port St. Lucie, FL business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These accounts can provide the reliable income you’ll need during retirement. Remember that while selling a business often leads to a capital gain, deposits into these plans are restricted by contribution limits (e.g., a maximum of $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you’ll owe when you transfer your business.
- Succession Planning: If you’re passing the business on, your retirement accounts offer a stable foundation as you make this shift. You can also seek advice from a financial advisor with expertise in succession and retirement planning to help with taxes associated with the transaction.
With the best-fit retirement strategy, you gain control over your financial future, lower your tax bill, and build a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Port St. Lucie, FL Now?
There’s no denying that time is one of the most valuable resources in retirement planning. Starting early not only allows you to build a more substantial retirement fund but also lowers the pressure of saving aggressively in the future. This is why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement could lead to a major impact on the amount you’ll have when you stop working. The primary reason is compound interest—the powerful process where your investments grow, and those returns, subsequently, accumulate even more returns. The greater time span your money has to grow, the more significant the benefit of this growth.
Example: Taylor and Alex are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor delays savings until age 40 but puts away $7,500 annually to make up for lost time.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and accumulates $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Small, consistent savings invested steadily often create significant growth. Take a look at this scenario showing the effect of consistent growth:
- Starting at age 25: If you invest $200 per month in a retirement plan with an average annual 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 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 figures provided in this example are based on 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. Outcomes may change based on factors such as market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Port St. Lucie, FL, it is often the case that you focus more on reinvesting in your business rather than saving for retirement. Even so, starting a plan now enables you to:
- Leverage tax-free future growth or tax-free withdrawals in the future.
- Benefit from adjustable savings that adapt to your cash flow.
- Build a financial cushion that provides security, no matter how your business develops.
The sooner you start, the less you’ll be required to worry about playing catch-up later in life. Taking steps toward your retirement goals today means taking control of your financial future and giving yourself the freedom to turn your attention to your objectives—both for your future retirement and your Port St. Lucie, FL business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for entrepreneurs in Port St. Lucie, FL, each providing its own advantages and considerations. A financial advisor is available to help you learn about the advantages and disadvantages of each option and identify the one most suitable for your needs. Typically, your self-employed retirement plan options in Port St. Lucie, FL consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that offer specific tax advantages. In a conventional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but withdrawals in retirement are taxed as income. In contrast, Roth IRA contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are tax-free. In both cases, withdrawals come without penalties provided you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are accessible for individuals with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs offers a way to save for retirement that enables self-employed individuals to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a self-employed individual, you (the employee) cannot make additional contributions above the 25% you (the employer) have designated. 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 flat-dollar amount or a percentage of wages to employee accounts. This type of plan works well for entrepreneurs facing periods of inconsistent earnings. Unlike other plans, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs work like traditional IRAs, where you contribute pre-tax dollars 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 must not exceed:
- 25% of compensation, or
- $70,000 for 2025
As a self-employed person, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan intended for companies that have no employees or when the sole employee is your spouse. Solo 401(k)s are similar to employer-sponsored 401(k) plans, and enable contributions as both an employee or an employer with pre-tax money. This offers more savings compared to SEPs or IRAs; however, the extra savings options often come with more restricted investment choices. Using a solo 401(k), 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 may establish 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:
- Employee contributions of up to 100% of your earned income from self-employment, up to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your net self-employment income, which is your net profit minus half of your self-employment tax and the employee contributions you made.
The total contribution cannot exceed $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: A defined benefit plan represents a type of retirement plan that guarantees a set amount to business owners upon retirement. As opposed to defined contribution plans, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine exactly how much they'll receive in retirement. This strategy is recommended for high-earning self-employed individuals who aim to accumulate a substantial amount for retirement and are prepared to contribute substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income during retirement.
Eligibility: Self-employed professionals managing a one-person company or employing fewer than five people can open an individual defined benefit plan, but it's generally advised for those over 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans are:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Businesses currently investing 3-4% and are willing to do more
- Organizations with proven consistent profit patterns
- Business leaders over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions is calculated by an actuary determined by your financial situation, age, and savings targets. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Port St. Lucie, FL for Your Self-Employed Retirement Plan
A financial advisor in Port St. Lucie, FL focused on self-employed retirement strategies can be an essential partner for entrepreneurs. They offer the knowledge to assist understand the intricacies of saving for retirement and design a customized plan that matches your objectives. Your advisor in Port St. Lucie, FL will assess where you stand financially, understand your risk tolerance, and assist you in choosing wisely about saving and investing for retirement. A key part of what we do for you includes:
- Help you choose a plan that best fits your needs and goals
- Customize the plan to your needs even further
- Create a written plan in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Ensure you comprehend the plan's terms
- Review and modify your plan when necessary
- Deliver continuous support and financial insights as you continue on the road to retirement
- Boost your retirement earnings by optimizing your social security benefits
Self-Employed Retirement Plans in Port St. Lucie, FL: Correct Capital's Process
Self-employed individuals in Port St. Lucie, FL who aren’t equipped with the time or understanding to oversee their retirement savings strategy on their own often feel overwhelmed as they look at their available plans. With Correct Capital, our Port St. Lucie, FL financial advisors take on the majority of your retirement strategy for you, to help make meeting your future savings targets as straightforward as possible for you. We can help you get set up your self-employed retirement plan in just four steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can determine if we're a good fit for you and your business. This short conversation allows us to get a sense of your goals with no pressure or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including your employee count, your current financial situation, and your future objectives. This enables us to craft a tailored approach designed just for you.
- Review Your Plan: After we put together a plan based on the information you provide, we'll schedule a meeting and review your plan thoroughly to make sure it's clear and understand how it best correlates to your needs.
- 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 check in and monitor your plan to make sure it remains aligned with your goals.
Our Port St. Lucie, FL financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Port St. Lucie, FL 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 Port St. Lucie, FL
Your business isn't "just a business" to you, and your Port St. Lucie, FL financial advisors should provide more than simply sound financial advice. With Correct Capital, we make it a priority to understand our clients and their businesses to provide personalized self-employed retirement plans. To every client in Port St. Lucie, FL, we provide our I.O.U. promise: everything we recommend 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.
