Self-employed retirement plans Reno, NV. The freedom of being your own boss in Reno, NV is one of the best aspects of working for yourself. However, this independence can come with certain challenges, especially in terms of building your retirement fund, because you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from understanding their retirement options. In addition to having a more comfortable retirement, working with a financial advisor in Reno, NV to create your self-employed retirement plan offers significant tax advantages that enable you to move your business forward.
Few Reno, NV financial advisory and retirement planning firms understand the needs of entrepreneurs quite like Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and we are deeply experienced in supporting entrepreneurs with their retirement planning needs. We understand that your goals for your business and retirement go far beyond simple financial figures, and we strive to offer personalized solutions to meet your unique goals. Keep reading to learn more about your self-employed retirement plan options in Reno, NV, 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 Reno, NV today.
Why Reno, NV Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also provide real benefits today. With customizable contribution options to substantial tax savings, partnering with a financial advisor in Reno, NV helps you design your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) provides the flexibility to modify how much you save:
- Customizable Contributions: Set aside more during successful years and reduce savings when your earnings dip, ensuring your plan works with your cash flow.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw without tax penalties in the future—an advantageous choice if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Retirement plans for self-employed individuals provide valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, so you can keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to grow.
- State-Specific Incentives: Based on your location, you could qualify for extra tax breaks as a business owner. These local incentives make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can take advantage of a credit of up to 50% of the first $2,000 contributed a retirement plan, further reducing 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: Distributing your investments across varied asset classes like stocks and bonds can help reduce risk while still growing your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund prevents you from tapping into your nest egg during challenging periods and incurring penalties.
Plan for the Future of Your Reno, NV Business
A thoughtful retirement strategy also helps you prepare for what’s next with your Reno, NV business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and won’t be included in the sale. These savings offer the financial stability you’ll need during retirement. Keep in mind that while the sale of a business usually creates a capital gain, contributions to retirement accounts are capped at annual limits (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you’ll owe when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement accounts ensure financial security through the transition. You can also partner with a financial advisor with expertise in succession and retirement planning to help with taxes associated with the transaction.
With the right retirement plan, you can take control of your financial future, cut down your tax obligations, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Reno, NV Now?
Time remains one of the most valuable 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 saving aggressively in the future. Here’s why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings may cause a significant impact on the savings you’ll have when you reach retirement age. The biggest reason is compound interest—the concept where your investments earn returns, and those returns, then, generate even more returns. The more time your money has to grow, the larger the benefit of this growth.
Example: Taylor and Alex are both self-employed professionals. Both of them want 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 puts away $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex invests $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently can lead to significant growth. Take a look at this scenario showing the impact of compound interest:
- Starting at age 25: If you invest $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: Saving 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.
The earlier you begin, the lower your annual savings needs each year to achieve your retirement goals.
*These calculations are based on estimates derived from NerdWallet’s Compound Interest Calculator, with the assumption of 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 do not guarantee future performance. Your individual results may differ depending on variables including market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Reno, NV, it can be tempting to focus more on reinvesting in your business over saving for retirement. However, beginning a plan now allows you to:
- Benefit from tax-deferred growth or tax-free withdrawals in the future.
- Take advantage of contribution flexibility that align with your income.
- Create a financial cushion that provides security, no matter how your business changes.
Getting started now, the less you’ll be required to worry about playing catch-up later in life. Taking steps toward your retirement goals today means managing your financial future and allowing yourself the ability to focus on your objectives—both for your golden years and your Reno, NV business.
Types of Self-Employed Retirement Plans
There are several retirement savings options available for self-employed individuals in Reno, NV, each offering its own advantages and considerations. A financial advisor will guide you to evaluate the benefits and drawbacks of each plan and choose the one best suited for your circumstances. In most cases, your self-employed retirement plan options in Reno, NV 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 standard IRA, contributions are typically tax-deductible, and returns grow free of current taxes, but retirement distributions are subject to income tax. In contrast, with Roth IRAs, you contribute from post-tax earnings, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals don’t incur penalties if you are at least 59½.
Eligibility: Unlike plans linked to your job, traditional and Roth IRAs are available to anyone with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA serves as a retirement savings option that allows self-employed individuals to contribute a percentage of their net earnings. Contributions are strictly employer contributions 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. It's your choice whether to contribute a flat-dollar amount or a percentage of wages to employee accounts. A SEP IRA works well for entrepreneurs facing cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs work like standard IRAs, where you contribute pre-tax dollars 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 must not exceed:
- 25% of compensation, or
- $70,000 for 2025
For self-employed individuals, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses with no employees or if the only employee is your spouse. These plans function similarly to employer-sponsored 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This offers more savings compared to SEPs or IRAs; however, the additional opportunities can be balanced by more constrained investment avenues. 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: 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: For self-employed individuals with a solo 401(k) plan, you can make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, up to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 for those aged 50 and above, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your adjusted self-employment income, which is your 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 for individuals aged 50+ (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans offers a structured retirement solution that guarantees a set amount to self-employed individuals upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but lets individuals clearly understand what they'll receive in retirement. This strategy is ideal for higher-income professionals who want to save a large amount for retirement and are prepared to contribute larger deposits. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income during retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees may establish an individual defined benefit plan, but it's typically suggested for those over 50 who make $250,000 or more annually. Generally, good candidates for defined benefit plans tend to be:
- Entrepreneurs 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 that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The cap on contributions is calculated by an actuary determined by your income, age, and retirement goals. Contribution limits change annually.
The Importance of a Financial Advisor in Reno, NV for Your Self-Employed Retirement Plan
Working with a financial advisor in Reno, NV specialized in self-employed retirement plans serves as an important asset for entrepreneurs. They have the expertise to help navigate the complexities of retirement planning and develop a tailored strategy that matches your objectives. Your advisor in Reno, NV will assess where you stand financially, identify your risk preferences, and guide you in choosing wisely about saving and investing for retirement. A key part of what we do for you involves:
- Assist in selecting a plan that suits your unique requirements
- Further adapt the plan to your specific situation even further
- Formalize a plan in writing as required by IRS rules
- Set up an asset trust plan
- Help you understand the plan's terms
- Review and modify your plan as needed
- Provide ongoing education and advice throughout your retirement planning process
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Reno, NV: Correct Capital's Process
Entrepreneurs in Reno, NV who aren’t equipped with the time or understanding to manage their own retirement planning themselves may end up overwhelmed when faced with their available plans. Through our team at Correct Capital, our Reno, NV financial advisors manage the lion's share of your retirement strategy for you, and strive to ensure meeting your future savings targets as easy 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: In just 20 minutes, a member of our advisor team will assess if we're a good fit for you and your business. This short conversation allows us to learn about your needs with zero commitment or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including whether you have employees, your present financial standing, and your future objectives. This helps us create a custom plan suited specifically for your needs.
- Review Your Plan: When we finalize a plan from the information you provide, we'll sit down with you and go over your plan thoroughly to help you fully grasp it and show how it aligns with your goals.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can start saving. As time goes on, we'll have regular meetings and track your progress to ensure it stays suited to your needs.
Our Reno, NV financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are committed by law and ethics to act in your best interest.
Other financial advisory services we offer in Reno, NV 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 Reno, NV
Your business isn't "just a business" to you, and your Reno, NV financial advisors need to offer more than just good financial guidance. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to provide tailored self-employed retirement plans. To every client in Reno, NV, we provide our I.O.U. promise: all of the advice you get from us 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.
