Self-employed retirement plans Portland, OR. The flexibility of owning your own business in Portland, OR offers many benefits of having a self-directed career. However, this flexibility often comes with certain challenges, especially when it comes to building your retirement fund, as you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider looking into other possibilities. In addition to enjoying a more secure retirement, working with a financial advisor in Portland, OR to create your self-employed retirement plan delivers significant tax advantages that help you to move your business forward.
Few Portland, OR wealth management and retirement planning firms are as attuned to the requirements of entrepreneurs better than Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (check out our story here), and we take pride in helping businesses with their retirement planning needs. We understand that your professional and personal aspirations extend well past just monetary concerns, and we are dedicated to create personalized solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Portland, OR, or call Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Portland, OR today.
Why Portland, OR Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver real benefits today. With customizable contribution options to significant tax savings, consulting a financial advisor in Portland, OR helps you design your retirement plan to suit your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) offers the option to tailor how much you save:
- Customizable Contributions: Set aside more during successful years and cut back when revenues are down, so your plan works with your cash flow.
- Roth Options: Opting for 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 to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed deliver significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, so you can keep more of your earnings.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to accumulate.
- State-Specific Incentives: In some states, you may be eligible for additional tax breaks as a business owner. These state-level incentives make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for 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
Creating a stable future goes beyond just how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Allocating your investments across varied stocks, bonds, and alternatives serves to minimize exposure to risk while helping to grow your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund prevents you from using your retirement funds during challenging periods and risking extra costs.
Plan for the Future of Your Portland, OR Business
A thoughtful retirement strategy can assist you prepare for what’s next with your Portland, OR business:
- Selling Your Business: When selling your business, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These savings ensure the financial stability you’ll need later on. It’s important to note that while selling a business often leads to a capital gain, contributions to retirement accounts are capped at annual limits (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you might face when you sell your business.
- Succession Planning: If you’re passing the business on, your retirement savings ensure a stable foundation during the change. You might want to work with a financial advisor experienced in both succession and retirement strategies to reduce taxes during the sale.
With the best-fit retirement strategy, you gain control over your financial future, lower your tax bill, and build a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Portland, OR Now?
There’s no denying that time is one of the most valuable resources when it comes to saving for retirement. Starting early not only helps you grow a bigger financial cushion but also minimizes the financial burden of saving aggressively in the future. The following are reasons why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund can have a significant impact on the amount you’ll have when you stop working. The primary reason is compound interest—the powerful process where your investments earn returns, and those returns, in turn, generate even more returns. The more time your money has to grow, the more significant the benefit of this compounding process.
Example: Alex and Taylor are both self-employed individuals. They each aim 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 catch up.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently often create impressive growth. Consider this example 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 grow to approximately $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month yields 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 reach your retirement goals.
*The numbers shown in this scenario are estimates derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. The scenarios provided are for illustrative purposes only and are not a promise of future results. Your individual results may differ based on factors such as market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Portland, OR, it can be tempting to put more emphasis on reinvesting in your business instead of saving for retirement. However, initiating a plan now enables you to:
- Benefit from tax-deferred growth or tax-free withdrawals in the future.
- Enjoy adjustable savings that adapt to your income.
- Establish a long-term safety measure that offers peace of mind, no matter how your business evolves.
The sooner you start, the less you’ll be required to worry about making up for lost time later in life. Taking steps toward your retirement goals today means managing your financial future and creating for yourself the freedom to turn your attention to your goals—both for your golden years and your Portland, OR business.
Types of Self-Employed Retirement Plans
There are several retirement savings options available for entrepreneurs in Portland, OR, each providing its own benefits and trade-offs. A financial advisor is available to help you learn about the benefits and drawbacks of each plan and determine the one most suitable for your needs. Typically, your self-employed retirement plan options in Portland, OR are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that offer specific tax advantages. In a standard IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but withdrawals in retirement are taxed as income. In contrast, Roth IRAs require contributions from post-tax earnings, but eligible distributions during retirement, including earnings, are not taxed. In both types of accounts, withdrawals don’t incur penalties provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are available to anyone with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that permits self-employed individuals to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a sole proprietor, you (the employee) are limited to contributions from the employer role above 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 fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA is a good option for businesses that experience fluctuating revenue streams. Compared to other retirement options, SEP IRAs are free of the high fees associated with starting or maintaining other plans.
SEPs operate like traditional IRAs, where contributions are made with pre-tax money and money withdrawn is subject to income tax.
Eligibility: Employers of any type, including self-employed individuals 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
If you’re self-employed, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, also called an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan designed for businesses with no employees or if the only employee is your spouse. These plans operate much like employer-sponsored 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 can be balanced by more constrained investment avenues. 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: Only 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 earned income from self-employment, capped at the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you are 50 or older, or $34,750 for those who turn 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the elective deferrals you made.
Total contributions are capped at $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: The defined benefit plan represents a type of retirement plan that guarantees a pre-established payout to self-employed individuals upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine the precise amount they'll have in retirement. This strategy is best suited for high-earning entrepreneurs who want to save a large amount for retirement and are prepared to contribute sizeable contributions. Contributions are tax deferred, and withdrawals are taxable as income upon 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 typically advised for people above age 50 who make $250,000 or more annually. In most cases, good candidates for defined benefit plans tend to be:
- Business owners or partners who want to invest more than $70,000 (or $77,500 if over age 50)
- Organizations that already put in 3-4% with plans to contribute more
- Organizations showing consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution is calculated by an actuary based on your income, age, and retirement goals. Allowable contributions are adjusted each year.
The Importance of a Financial Advisor in Portland, OR for Your Self-Employed Retirement Plan
A financial advisor in Portland, OR experienced with retirement plans for the self-employed serves as an important asset for entrepreneurs. They offer the knowledge to assist guide you through the challenges of retirement planning and design a personalized approach that reflects your aspirations. An expert in your area will review your finances, understand your risk tolerance, and help you in selecting the best options about saving and investing for retirement. Included in what we do for you features:
- Assist in selecting a plan that suits your unique requirements
- Customize the plan to your specific situation even further
- Formalize a plan in writing in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Track and fine-tune your plan as needed
- Provide ongoing education and advice throughout your retirement planning process
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Portland, OR: Correct Capital's Process
Portland, OR business owners who don’t have the time or expertise to manage their own retirement planning themselves can become overwhelmed when faced with their options. With Correct Capital, our Portland, OR financial advisors manage the majority of your savings plan setup for you, working to make meeting your retirement goals as hassle-free as possible for you. We can help you get set up your self-employed retirement plan in four simple steps:
- Schedule a Call: A quick 20-minute call is all it takes, 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 understand what you're looking for with zero commitment or extensive time commitment on your part.
- Gather Information: If we both decide to move forward, we'll request information, including whether you have employees, your existing financial picture, and your long-term savings targets. This helps us create a tailored approach designed just for you.
- Review Your Plan: After we put together a plan based on the information you provide, we'll meet with you and discuss your plan in detail to ensure you understand it and show how it aligns with your goals.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can start saving. Throughout our relationship, we'll have regular meetings and monitor your plan to ensure it stays suited to your needs.
Our Portland, OR financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are required by law and ethical standards to prioritize your needs above all else.
Other financial advisory services we offer in Portland, OR include:
- Family Wealth Planning
- Financial Planning for Business Owners
- Comprehensive Financial Planning
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 401(k) Audit
Call Correct Capital for Your Self-Employed Retirement Plan in Portland, OR
You don't see your business as "just a business", and your Portland, OR financial advisors should provide more than just good financial guidance. At Correct Capital, we take the time to get to know our clients and their businesses to deliver tailored self-employed retirement plans. To every client in Portland, OR, we provide our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
