Self-employed retirement plans Salt Lake City, UT. The flexibility of running your own company in Salt Lake City, UT is one of the best aspects of being self-employed. However, this freedom can come with certain challenges, particularly regarding building your retirement fund, because you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off understanding their retirement options. In addition to enjoying a more secure retirement, working with a financial advisor in Salt Lake City, UT to set up your self-employed retirement plan offers significant tax advantages that allow both you and your business to thrive.
Few Salt Lake City, UT financial advisory and retirement planning firms truly grasp the challenges faced by self-employed individuals better than 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 understand that your goals for your business and retirement aren’t limited to basic numbers, and we are dedicated to create customized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Salt Lake City, UT, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Salt Lake City, UT today.
Why Salt Lake City, UT Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also offer tangible benefits today. From flexible contributions to substantial tax savings, partnering with a financial advisor in Salt Lake City, UT allows you to create your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
When your earnings vary over time, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to adjust how much you save:
- Customizable Contributions: Set aside more during successful years and scale back when your earnings dip, ensuring your plan works with your cash flow.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw tax-free later—a smart decision if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Plans designed for the self-employed offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, helping you keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, which gives your money more time to compound.
- State-Specific Incentives: In some states, you might access state-specific deductions as a self-employed individual. These local incentives help 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 put into a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure retirement requires more than how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and other assets is a smart way to reduce risk while still growing your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net prevents you from tapping into your nest egg during financial hardships and risking extra costs.
Plan for the Future of Your Salt Lake City, UT Business
Retirement planning can assist you think through what’s next with your Salt Lake City, UT business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s remain your personal assets and are not part of the sale. These accounts ensure the steady income you’ll need later on. Remember that while selling a business often leads to a capital gain, deposits into these plans 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: Using retirement contributions wisely can reduce the taxes you’ll owe when you transfer your business.
- Succession Planning: If you’re passing the business on, your nest egg provide financial security through the transition. You might want to seek advice from a financial advisor with expertise in succession and retirement planning to help with taxes on the sale.
With the proper savings strategy, you gain control over your financial future, reduce your tax burden, and establish a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Salt Lake City, UT Now?
Time is one of the most important assets when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a more substantial retirement fund but also minimizes the financial burden of saving aggressively in the future. Here’s why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings can have a major impact on the savings you’ll have when you stop working. The biggest reason is compound interest—the concept where your investments grow, and those returns, in turn, accumulate even more returns. The more time your money has to grow, the more significant 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 begins contributing $5,000 annually at age 30.
- Taylor delays savings until age 40 but puts away $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex invests $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Even modest contributions made consistently can lead to significant growth. Consider this example showing the power of compounding:
- 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 would result in only $235,412.97* by age 65—a shortfall of over $260,000, just from a 10-year delay.
Saving early, the less effort required each year to reach your retirement goals.
*These calculations are estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is meant to provide general guidance and are not a promise of future results. Actual results may vary due to factors such as market conditions, fees, and individual circumstances. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Salt Lake City, UT, it is often the case that you focus more on reinvesting in your business rather than saving for retirement. That said, starting a plan now allows you to:
- Benefit from tax-free future growth or withdrawals without taxes later on.
- Enjoy adjustable savings that adapt to your earnings.
- Build a financial cushion that provides security, no matter how your business changes.
Getting started now, the less you’ll have to worry about catching up later in life. Taking steps toward your retirement goals today means taking control of your financial future and allowing yourself the opportunity to focus on your dreams—both for your future retirement and your Salt Lake City, UT business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for self-employed individuals in Salt Lake City, UT, each offering its own benefits and trade-offs. A financial advisor is available to help you evaluate the benefits and drawbacks of each option and determine the one ideal for your needs. In most cases, your self-employed retirement plan options in Salt Lake City, UT consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include distinct tax benefits. In a standard IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are subject to income tax. In contrast, Roth IRA contributions are made with after-tax income, but retirement withdrawals that qualify, including earnings, are tax-free. In both types of accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, IRAs, including traditional and Roth options are accessible for individuals with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs serves as a retirement savings option that permits those who are self-employed to contribute a percentage of their net earnings. Contributions are strictly employer contributions an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role above the 25% you (the employer) have designated. If you have employees, it's required to contribute the same amount for them as you do for yourself. You may choose to contribute a flat-dollar amount or a percentage of wages to employee accounts. This type of plan works well for companies with fluctuating revenue streams. Compared to other retirement options, SEP IRAs don’t have costly startup or administrative fees.
SEPs work like conventional 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 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 amount eligible to be contributed 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 retirement savings plan designed for businesses without employees or when the sole employee is your spouse. These plans operate much like traditional employer-managed 401(k) plans, and allow you to contribute as both the employer and the employee with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the additional opportunities may be offset by more constrained investment avenues. Using a solo 401(k), you can make either traditional or Roth deferrals, which offer the same tax benefits as their IRA contribution counterparts.
Eligibility: This plan is exclusively for business owners and their spouses are eligible to open and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you have the ability to make two types of contributions:
- Employee contributions of up to 100% of your earned income from self-employment, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 if you attain age 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) must not surpass 25% of your net earnings from self-employment, which is calculated as net profits less half of your self-employment tax and the employee contributions you made.
The total contribution cannot exceed $70,000, or $77,500 for individuals aged 50+ (as of 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 delivers a fixed, predetermined benefit to entrepreneurs upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but lets individuals clearly understand what they'll receive in retirement. This option is ideal for higher-income self-employed individuals who are focused on saving a significant sum for retirement and can commit to making larger deposits. Contributions are tax deferred, and withdrawals are taxable as income during retirement.
Eligibility: Self-employed professionals running an owner-only business or employing fewer than five people can open an individual defined benefit plan, but it's most commonly recommended for people above age 50 who earn at least $250,000 a year. Generally, good candidates for defined benefit plans tend to be:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% with plans to contribute more
- Companies showing consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution is calculated by an actuary determined by your income, age, and retirement goals. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Salt Lake City, UT for Your Self-Employed Retirement Plan
Partnering with an advisor in Salt Lake City, UT specialized in self-employed retirement plans serves as an invaluable resource for self-employed individuals. They bring the skills needed to navigate the complexities of retirement planning and design a personalized approach that aligns with your goals. Your advisor in Salt Lake City, UT will review your finances, determine how much risk you’re comfortable with, and help you in choosing wisely about saving and investing for retirement. Part of what we do for you includes:
- Help you choose a plan that suits your unique requirements
- Tailor the plan to fit you personally even further
- Create a written plan that complies with IRS regulations
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Monitor and adjust your plan to keep it aligned with your goals
- Deliver continuous support and financial insights to help you navigate your retirement journey
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Salt Lake City, UT: Correct Capital's Process
Entrepreneurs in Salt Lake City, UT who don’t have the time or expertise to oversee their own retirement planning independently often feel overwhelmed when faced with their options. Through our team at Correct Capital, our Salt Lake City, UT financial advisors take on the lion's share of your retirement planning for you, to help make meeting your financial objectives as hassle-free 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: It only takes 20 minutes, a member of our advisor team can determine if our services align for you and your business. This initial call helps us learn about your needs with zero commitment or major time investment on your part.
- Gather Information: Should we agree to proceed, we'll request information, including your employee count, your existing financial picture, and your retirement goals. This enables us to craft a tailored approach that aligns with your goals.
- Review Your Plan: After we put together a plan using the information you provide, we'll sit down with you and review your plan step by step to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll implement the necessary steps so you can start saving. Throughout our relationship, we'll check in and review your strategy to ensure it stays suited to your needs.
Our Salt Lake City, UT financial advisors and retirement plan consultants are fiduciary advisors, which means they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Salt Lake City, UT include:
- Investment Planning
- Retirement Financial Planning
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Call Correct Capital for Your Self-Employed Retirement Plan in Salt Lake City, UT
Your business isn't "just a business" to you, and your Salt Lake City, UT financial advisors should provide more than basic financial recommendations. At Correct Capital, we make it a priority to understand our clients and their businesses to deliver tailored self-employed retirement plans. All our clients in Salt Lake City, UT benefit from our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To get started on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
