Self-employed retirement plans Salem, OR. The independence of running your own company in Salem, OR offers many benefits of working for yourself. However, this independence sometimes brings with certain challenges, notably in terms of retirement savings, because you don't have access to employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider understanding their retirement options. In addition to achieving a more secure retirement, working with a financial advisor in Salem, OR to establish your self-employed retirement plan offers significant tax advantages that allow your business to grow and succeed.
Few Salem, OR investment consulting and retirement planning firms are as attuned to the requirements of small business owners better than Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and we have a rich history of helping businesses with their retirement planning needs. We understand that your professional and personal aspirations aren’t limited to just monetary concerns, and we strive to offer personalized solutions aligned with your vision. Keep reading to learn more about your self-employed retirement plan options in Salem, OR, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a small business financial advisor in Salem, OR today.
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Why Salem, 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. Offering flexibility in contributions to substantial tax savings, working with a financial advisor in Salem, OR helps you create your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) offers the flexibility to tailor how much you save:
- Customizable Contributions: Contribute more during high-income years and reduce savings when revenues are down, so your plan aligns with your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw tax-free later—a wise move if you expect your tax rate will increase in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) lower your taxable income, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, which gives your money more time to grow.
- State-Specific Incentives: Based on your location, you may be eligible for state-specific credits as a business owner. These state-level incentives make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can apply for 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: Allocating your investments across varied stocks, bonds, and other assets is a smart way to minimize exposure to risk while helping to grow your nest egg.
- Emergency Back-Up: Pairing your retirement plan with a business emergency fund helps you avoid tapping into your nest egg during tough times and facing tax penalties.
Plan for the Future of Your Salem, OR Business
Retirement planning also helps you prepare for what’s next with your Salem, OR business:
- Selling Your Business: When selling your business, accounts such as SEP IRAs or Solo 401(k)s stay in your name and don’t transfer with the business. These plans can provide the financial stability you’ll need during retirement. Remember that while selling your business results in a capital gain, contributions to retirement accounts are capped at annual limits (e.g., as much as $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, based on plan compensation).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you are required to pay when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts offer the funds you need during the change. You may also seek advice from a financial advisor who specializes in succession planning and retirement accounts to reduce taxes associated with the transaction.
With the best-fit retirement strategy, you gain control over your financial future, reduce your tax burden, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Salem, OR Now?
Time is one of the most important assets in retirement planning. Starting early not only helps you grow a larger nest egg but also reduces the stress of catching up later in life. This is why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement could lead to a major impact on the savings you’ll have when you stop working. The main reason is compound interest—the financial principle where your investments generate earnings, and those returns, in turn, accumulate even more returns. The more time your money has to grow, the larger the impact of this growth.
Example: Two individuals, Alex and Taylor are both self-employed professionals. Their shared goal is 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 saves $7,500 annually to make up for lost time.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently may result in significant 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 average annual return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month would result in only $235,412.97* by age 65—a gap of over $260,000, all because of a 10-year delay.
Saving early, the less you need to save each year to achieve your retirement goals.
*The numbers shown in this scenario represent estimates derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. This information is meant to provide general guidance and do not guarantee future performance. Outcomes may change depending on factors such as market conditions, fees, and personal factors. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in Salem, OR, it might seem easier to prioritize reinvesting in your business instead of saving for retirement. However, initiating a plan now allows you to:
- Benefit from tax-free future growth or penalty-free withdrawals down the road.
- Benefit from flexible contributions that change with your income.
- Build a financial cushion that offers peace of mind, no matter how your business develops.
Getting started now, the less you’ll have to worry about catching up later in life. Saving for retirement now means managing your financial future and giving yourself the freedom to turn your attention to your objectives—both for your future retirement and your Salem, OR business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for those working for themselves in Salem, OR, each providing its own benefits and trade-offs. A financial advisor can help you learn about the advantages and disadvantages of each option and identify the one ideal for your needs. Generally speaking, your self-employed retirement plan options in Salem, OR include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that offer key tax perks. In a conventional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but money taken out during retirement are taxable. In contrast, Roth IRA contributions using income already taxed, but eligible distributions during retirement, including earnings, are tax-free. In both types of accounts, withdrawals are penalty-free as long as 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 are set at $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs serves as a retirement savings option that allows self-employed individuals to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a independent business owner, 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 may choose to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA may be ideal for businesses that experience cycles of high revenue and low revenue. Unlike other plans, SEP IRAs lack expensive setup or ongoing fees.
SEPs operate like conventional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Both employers and 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
As a self-employed person, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan meant for companies that have no employees or when the sole 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 additional opportunities can be balanced by more limited investment options. 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 may establish and contribute to a solo 401(k).
Contribution Limits: If you are self-employed with a solo 401(k) plan, you are allowed to make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employment income, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) are limited to 25% of your net self-employment income, which is defined as net profit minus half of your self-employment tax and the elective deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (in 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan is a retirement option that provides 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 what they'll receive in retirement. This plan is best suited for wealthier entrepreneurs who are focused on saving a large amount for retirement and can commit to making substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income during retirement.
Eligibility: Entrepreneurs operating a solo business or with a small staff of under five can open an individual defined benefit plan, but it's generally recommended for those over 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans tend to be:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 if over age 50)
- Organizations that already put in 3-4% and are willing to do more
- Companies with proven consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The contribution limit must be determined by an actuary determined by your earnings, age, and retirement objectives. Contribution limits change annually.
The Importance of a Financial Advisor in Salem, OR for Your Self-Employed Retirement Plan
A financial advisor in Salem, OR specialized in self-employed retirement plans can be an essential partner for those working for themselves. They bring the skills needed to understand the intricacies of saving for retirement and develop a customized plan that matches your objectives. Your advisor in Salem, OR will evaluate your financial situation, determine how much risk you’re comfortable with, and assist you in choosing wisely about saving and investing for retirement. A key part of what we do for you features:
- Help you choose a plan that best fits your needs and goals
- Customize the plan to your specific situation even further
- Formalize a plan in writing in accordance with IRS guidelines
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Track and fine-tune your plan when necessary
- Provide ongoing education and advice to help you navigate your retirement journey
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Salem, OR: Correct Capital's Process
Salem, OR business owners who aren’t equipped with the time or understanding to manage their retirement savings strategy independently may end up overwhelmed when faced with their options. With Correct Capital, our Salem, OR financial advisors manage the lion's share of your retirement strategy for you, and strive to ensure meeting your future savings targets as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in four simple steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can determine if we're suited to your needs for you and your business. This short conversation helps us understand what you're looking for with no pressure or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including your employee count, your current financial situation, and your retirement goals. This helps us create a personalized strategy designed just for you.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll sit down with you and discuss your plan in detail to make sure it's clear and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll implement the necessary steps so you can begin contributing. As time goes on, we'll meet with you and track your progress to make sure it remains aligned with your goals.
Our Salem, OR financial advisors and retirement plan consultants act as fiduciary advisors, meaning they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Salem, 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 Salem, OR
You don't see your business as "just a business", and your Salem, OR financial advisors need to offer more than simply sound financial advice. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to provide tailored self-employed retirement plans. To every client in Salem, 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, call Correct Capital today at 877-930-401k or contact us online.
