Self-employed retirement plans Reno, NV. The freedom of being your own boss in Reno, NV is one of the best aspects of being self-employed. However, this freedom sometimes brings with potential drawbacks, notably regarding planning for retirement, since you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many should consider looking into other possibilities. In addition to having a more comfortable retirement, partnering with a financial advisor in Reno, NV to create your self-employed retirement plan can provide significant tax advantages that enable your business to grow and succeed.
Few Reno, NV investment consulting and retirement planning firms are as attuned to the requirements of self-employed individuals as well as Correct Capital. The father of our founder was a small business owner himself (check out our story here), and Correct Capital take pride in assisting business owners in their retirement planning needs. We recognize that your business and retirement aspirations go far beyond simple financial figures, and we are dedicated to create customized solutions aligned with your vision. Read on to discover 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 talk to a entrepreneurial financial advisor in Reno, NV today.
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Why Reno, NV Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also provide real benefits today. Offering flexibility in contributions to significant tax savings, partnering with a financial advisor in Reno, NV allows you to customize 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) offers the flexibility to adjust how much you save:
- Customizable Contributions: Contribute more during high-income years and reduce savings when revenues are down, so that your plan works with your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw your savings tax-free down the road—a wise move if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, allowing you to keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you may be eligible for state-specific credits as a sole proprietor. These local incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax 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 about how you invest:
- Diversified Portfolios: Allocating your investments across varied asset classes like stocks and bonds can help reduce risk while still growing your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund prevents you from tapping into your nest egg during challenging periods and risking extra costs.
Plan for the Future of Your Reno, NV Business
A thoughtful retirement strategy also helps you plan ahead for what’s next with your Reno, NV business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These accounts offer the steady income you’ll need later on. It’s important to note that while the sale of a business usually creates a capital gain, retirement plan contributions are restricted by contribution limits (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you are required to pay when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg provide the funds you need through the transition. You can also work with a financial advisor who specializes in succession planning and retirement accounts to help with taxes associated with the transaction.
With the proper savings strategy, you gain control over your financial future, reduce your tax burden, and build a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Reno, NV Now?
Time is one of the most important resources for building your retirement fund. Beginning sooner rather than later not only lets you accumulate a more substantial retirement fund but also minimizes the stress of catching up later in life. The following are reasons why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement can have a substantial impact on the savings you’ll have when you stop working. The main reason is compound interest—the concept where your investments grow, and those returns, subsequently, earn even more returns. The longer your money has to grow, the greater the impact of compounding.
Example: Alex and Taylor are both self-employed individuals. 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 saves $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings invested steadily may result in impressive growth. Take a look at this scenario showing the effect of consistent growth:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll accumulate $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, 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 estimates calculated using NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. These examples are for illustrative purposes only and do not guarantee future performance. Your individual results may differ due to elements like market conditions, fees, and personal factors. We recommend consulting a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Reno, NV, it can be tempting to prioritize reinvesting in your business instead of saving for retirement. However, initiating a plan now enables you to:
- Leverage growth that is tax-deferred or tax-free withdrawals down the road.
- Benefit from adjustable savings that adapt to your cash flow.
- Create a safety net that provides security, no matter how your business evolves.
Starting early, the less you’ll be required to worry about catching up later in life. Saving for retirement now means managing your financial future and creating for yourself the freedom to focus on your objectives—both for your future retirement and your Reno, NV business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for self-employed individuals in Reno, NV, each offering its own pros and cons. A financial advisor will guide you to learn about the advantages and disadvantages of each plan and choose the one best suited for your circumstances. Generally speaking, 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 include specific tax advantages. In a conventional 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 using income already taxed, but qualified withdrawals in retirement, including earnings, are not taxed. In both types of accounts, withdrawals are penalty-free if you are at least 59½.
Eligibility: Unlike plans linked to your job, traditional and Roth IRAs are open to those with an earned 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: The Simplified Employee Pension IRA offers a way to save for retirement that permits self-employed individuals to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a sole proprietor, you (the employee) cannot make additional contributions 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 have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. SEP IRAs may be ideal for businesses that experience cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs lack expensive setup or ongoing fees.
SEPs work like conventional IRAs, where the contributions are tax-deferred and withdrawals are taxed as income.
Eligibility: Employers of any type, including self-employed individuals can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are capped at the lower of:
- 25% of compensation, or
- $70,000 for 2025
As a self-employed person, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan meant for businesses without employees or where the only employee is a spouse. These plans function similarly to employer-sponsored 401(k) plans, and allow you to contribute as both an employee or an employer with pre-tax money. This offers more savings versus SEPs or IRAs; however, the additional opportunities often come with more restricted investment choices. With this type of plan, you can make either traditional or Roth deferrals, which offer 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: 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.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your net earnings from self-employment, which is calculated as net profits less half of your self-employment tax and the elective deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (in 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans offers a structured retirement solution that provides a pre-established payout to self-employed individuals upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but allows self-employed individuals to know exactly how much they'll have in retirement. This strategy is ideal for higher-income self-employed individuals who are focused on saving a substantial amount for retirement and are prepared to contribute larger deposits. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income upon retirement.
Eligibility: Entrepreneurs managing a one-person company or with less than five employees can open an individual defined benefit plan, but it's generally recommended for people above age 50 who earn at least $250,000 a year. In most cases, good candidates for defined benefit plans tend to be:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 for individuals 50 and older)
- Businesses currently investing 3-4% but are open to increasing contributions
- Organizations showing consistent profit patterns
- Business leaders over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The cap on contributions must be determined by an actuary based on your income, age, and retirement goals. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Reno, NV for Your Self-Employed Retirement Plan
Partnering with an advisor in Reno, NV specialized in self-employed retirement plans can be an essential partner for entrepreneurs. They offer the knowledge to assist navigate the complexities of retirement planning and develop a tailored strategy that reflects your aspirations. Your advisor in Reno, NV will evaluate your financial situation, identify your risk preferences, and guide you in choosing wisely about saving and investing for retirement. Part of what we do for you includes:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Further adapt the plan to your needs even further
- Adopt a written plan in accordance with IRS guidelines
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Review and modify your plan as needed
- Deliver continuous support and financial insights throughout your retirement planning process
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Reno, NV: Correct Capital's Process
Entrepreneurs in Reno, NV who lack the time, interest, or knowledge to manage their own retirement planning themselves can become overwhelmed as they look at their available plans. With Correct Capital, our Reno, NV financial advisors take on the majority of your retirement strategy for you, and strive to ensure meeting your financial objectives as easy as possible for you. We can help you get set up 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 brief introduction helps us learn about your needs with no pressure or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including how many employees you have (if any), your current financial situation, and your retirement goals. This helps us create a tailored approach that aligns with your goals.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll meet with you and go over your plan thoroughly to ensure you understand it and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll put everything in place so you can begin contributing. Throughout our relationship, we'll meet with you and review your strategy to ensure it stays suited to your needs.
Our Reno, NV financial advisors and retirement plan consultants are fiduciary advisors, meaning they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Reno, NV 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 Reno, NV
To you, your business is more than "just a business", and your Reno, NV financial advisors need to offer more than basic financial recommendations. With Correct Capital, we take the time to get to know our clients and their businesses to provide tailored self-employed retirement plans. We offer all our Reno, NV clients our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To get started on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
