Self-employed retirement plans Portland, OR. The independence of being your own boss in Portland, OR is one of the best aspects of being self-employed. However, this flexibility can come with certain challenges, notably in terms of building your retirement fund, since you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off looking into other possibilities. In addition to having a financially stable retirement, seeking advice from a financial advisor in Portland, OR to create your self-employed retirement plan can provide significant tax advantages that enable both you and your business to thrive.
Few Portland, OR financial advisory and retirement planning firms are as attuned to the requirements of small business owners quite like Correct Capital. Our founder's father was a small business owner himself (check out our story here), and we take pride in helping businesses with their retirement planning needs. We recognize that your business and retirement aspirations aren’t limited to simple financial figures, and we work tirelessly to create tailored solutions that reflect your objectives. Continue exploring to find out about your self-employed retirement plan options in Portland, OR, or call Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Portland, OR today.
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Why Portland, OR Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also provide tangible benefits today. With customizable contribution options to considerable tax savings, consulting a financial advisor in Portland, OR helps you customize your retirement plan to fit your individual circumstances.
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 tailor how much you save:
- Customizable Contributions: Contribute more during profitable years and cut back when your earnings dip, ensuring your plan works with your current income.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw tax-free later—an advantageous choice if you believe your tax rate will increase in the future.
Save Money on Taxes
Retirement plans for self-employed individuals provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, helping you keep more of your income.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, giving your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for state-specific credits as a self-employed individual. These regional 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 they contribute a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement goes beyond just how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Distributing your investments across varied stocks, bonds, and alternatives is a smart way to mitigate financial risk while continuing to build your savings.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund helps you avoid dipping into savings during tough times and incurring penalties.
Plan for the Future of Your Portland, OR Business
A thoughtful retirement strategy enables you to plan ahead for what’s next with your Portland, OR business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s remain your personal assets and don’t transfer with the business. These accounts can provide the steady income you’ll need during retirement. Keep in mind that while the sale of a business usually creates 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, depending on plan details).
- 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 nest egg offer a stable foundation during the change. You can also partner with a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens on the sale.
With the best-fit retirement strategy, you can take control of your financial future, lower your tax bill, and create a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Portland, OR Now?
Time remains one of the most important resources when it comes to saving for retirement. Beginning sooner rather than later not only allows you to build a bigger financial cushion but also minimizes the pressure of catching up later in life. Here’s why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement could lead to a major impact on the total you’ll have when you retire. The primary reason is compound interest—the financial principle where your investments grow, and those returns, subsequently, generate even more returns. The longer your money has to grow, the more significant the benefit of compounding.
Example: Two individuals, Alex and Taylor 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 postpones starting contributions to 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 puts in $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently may result in substantial growth. Consider this example showing the impact 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.
The earlier you begin, the less you need to save each year to meet your retirement goals.
*The figures provided in this example 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. These examples are intended as illustrative examples and do not guarantee future performance. Outcomes may change 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 Portland, OR, it can be tempting to prioritize reinvesting in your business rather than saving for retirement. However, beginning a plan now gives you the chance to:
- Leverage tax-free future growth or tax-free withdrawals in the future.
- Benefit from contribution flexibility that change with your earnings.
- Build a long-term safety measure that ensures stability, no matter how your business changes.
Starting early, the less you’ll need to worry about playing catch-up later in life. Saving for retirement now means gaining control over your financial future and allowing yourself the freedom to concentrate on your objectives—both for your retirement years and your Portland, OR business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for self-employed individuals in Portland, OR, each offering its own advantages and considerations. A financial advisor can help you learn about the benefits and drawbacks of each choice and identify the one best suited for your unique situation. Typically, your self-employed retirement plan options in Portland, OR consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that provide specific tax advantages. In a conventional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but retirement distributions are taxable. In contrast, Roth IRA contributions from post-tax earnings, but retirement withdrawals that qualify, 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, both traditional and Roth IRAs are accessible for individuals 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: SEP IRAs is a retirement plan that permits entrepreneurs to contribute a percentage of their net earnings. Contributions are strictly employer contributions an employer, so, as a sole proprietor, you (the employee) are limited to contributions from the employer role beyond 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 have the flexibility to contribute a fixed dollar figure or a percentage of wages to employee accounts. SEP IRAs works well for entrepreneurs facing cycles of high revenue and low revenue. Unlike other plans, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs function like conventional IRAs, where contributions are made with pre-tax money 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
If you’re self-employed, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed intended for companies that have no employees or if the only employee is your spouse. These plans are similar to standard 401(k) plans, and allow you to contribute as both the employer and the employee with pre-tax money. This provides more savings than SEPs or IRAs; however, the increased savings potential often come with more restricted investment choices. 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: Solo 401(k)s are available solely to business owners and their spouses may establish and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you can make two types of contributions:
- Employee contributions of up to 100% of your earned income from self-employment, up to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you're over 50, or $34,750 for those who turn 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your adjusted self-employment income, which is calculated as net profits less 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+ (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan is a retirement option that delivers a set amount to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but enables participants to determine exactly how much they'll receive in retirement. This strategy is best suited for high-earning professionals who aim to accumulate a substantial amount for retirement and can commit to making larger deposits. Contributions are tax deferred, and withdrawals incur taxes as income in retirement.
Eligibility: Self-employed professionals running an owner-only business or with less than five employees can open an individual defined benefit plan, but it's generally recommended for individuals aged 50+ who earn at least $250,000 a year. Typically, good candidates for defined benefit plans tend to be:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% with plans to contribute more
- Businesses with proven consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The maximum allowable contribution requires calculation from an actuary determined by your income, age, and retirement goals. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Portland, OR for Your Self-Employed Retirement Plan
Working with a financial advisor in Portland, OR experienced with retirement plans for the self-employed can be an invaluable resource for self-employed individuals. They bring the skills needed to navigate the complexities of retirement planning and craft a customized plan that reflects your aspirations. Your advisor in Portland, OR will evaluate your financial situation, understand your risk tolerance, and assist 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
- Tailor the plan to your needs even further
- Create a written plan as required by IRS rules
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Review and modify your plan when necessary
- Provide ongoing education and advice as you continue on the road to retirement
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Portland, OR: Correct Capital's Process
Portland, OR business owners who aren’t equipped with the time or understanding to oversee their self-employed retirement plan themselves may end up overwhelmed as they look at their choices. At Correct Capital, our Portland, OR financial advisors handle the majority of your savings plan setup for you, and strive to ensure 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: In just 20 minutes, a member of our advisor team can determine if our services align for you and your business. This initial call lets us get a sense of your goals with zero commitment or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll request information, including whether you have employees, your present financial standing, and your future objectives. This enables us to craft a custom plan suited specifically for your needs.
- Review Your Plan: When we finalize a plan using the information you provide, we'll meet with you and go over your plan thoroughly to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can begin contributing. As time goes on, we'll check in and review your strategy to make sure it remains aligned with your goals.
Our Portland, OR financial advisors and retirement plan consultants are fiduciary advisors, meaning they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Portland, OR 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 Portland, OR
You don't see your business as "just a business", and your Portland, OR financial advisors should provide more than basic financial recommendations. With Correct Capital, we make it a priority to understand our clients and their businesses to create tailored self-employed retirement plans. To every client in Portland, OR, we provide our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To begin on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
