Self-employed retirement plans Salt Lake City, UT. The freedom of being your own boss in Salt Lake City, UT offers many benefits of having a self-directed career. However, this independence sometimes brings with certain challenges, notably 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, although many should consider exploring their options. In addition to having a more secure retirement, working with a financial advisor in Salt Lake City, UT to set up your self-employed retirement plan delivers significant tax advantages that enable both you and your business to thrive.
Few Salt Lake City, UT investment consulting and retirement planning firms truly grasp the challenges faced by entrepreneurs as well as Correct Capital. Our founder's father was a small business owner himself (learn more about our story here), and our firm take pride in helping businesses with their retirement planning needs. We understand that your business and retirement aspirations go far beyond simple financial figures, and we strive to provide personalized solutions to meet your unique goals. Read on to discover about your self-employed retirement plan options in Salt Lake City, UT, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Salt Lake City, UT today.
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Why Salt Lake City, UT Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also provide immediate benefits today. With customizable contribution options to significant tax savings, working with a financial advisor in Salt Lake City, UT helps you design your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
When your earnings vary from year to year, a plan like a SEP IRA or Solo 401(k) provides the freedom to adjust how much you save:
- Customizable Contributions: Save extra during successful years and cut back when your earnings dip, so your plan works with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw without tax penalties in the future—an advantageous choice if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, so you can keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to grow.
- State-Specific Incentives: Based on your location, you might access state-specific credits as a self-employed individual. These local incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can apply for a credit of up to 50% of the first $2,000 put into a retirement plan, cutting down 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 determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across different stocks, bonds, and alternatives serves to reduce risk while continuing to build your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business prevents you from using your retirement funds during financial hardships and risking extra costs.
Plan for the Future of Your Salt Lake City, UT Business
Preparing for retirement enables you to prepare for what’s next with your Salt Lake City, UT business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s remain yours and don’t transfer with the business. These accounts ensure the reliable income you’ll need during retirement. It’s important to note that while selling your business results in a capital gain, contributions to retirement accounts are restricted by contribution limits (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, factoring in catch-up contributions, depending on plan details).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you are required to pay when you pass on your business.
- Succession Planning: For those winding down or handing over their business, your nest egg offer the funds you need during the change. You might want to work with a financial advisor experienced in both succession and retirement strategies to help with taxes on the sale.
With the best-fit retirement strategy, you gain control over your financial future, lower your tax bill, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Salt Lake City, UT Now?
There’s no denying that time is one of the most important factors when it comes to saving for retirement. Starting early not only lets you accumulate a bigger financial cushion but also lowers the pressure of playing catch-up as you get older. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Waiting to start your retirement fund may cause a major impact on the savings you’ll have when you reach retirement age. The main reason is compound interest—the financial principle where your investments grow, and those returns, in turn, generate even more returns. The longer your money has to grow, the greater the impact of compounding.
Example: Two individuals, Alex and Taylor are both self-employed individuals. They each aim to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor waits until age 40 but saves $7,500 annually to make up for lost time.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently can lead to impressive growth. Consider this example showing the power of compound interest:
- Starting at age 25: If you invest $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: Investing the same $200 per month would result in only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to reach your retirement goals.
*These calculations represent estimates calculated using 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. This information is for illustrative purposes only and are not a promise of future results. Outcomes may change due to elements like market conditions, fees, and personal factors. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in Salt Lake City, UT, it is often the case that you prioritize reinvesting in your business over saving for retirement. That said, starting a plan now gives you the chance to:
- Benefit from tax-deferred growth or penalty-free withdrawals later on.
- Take advantage of adjustable savings that change with your income.
- Build a long-term safety measure that ensures stability, no matter how your business develops.
The sooner you start, the less you’ll need to worry about catching up later in life. Taking steps toward your retirement goals today means taking control of your financial future and creating for yourself the freedom to focus on your objectives—both for your future retirement and your Salt Lake City, UT business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for self-employed individuals in Salt Lake City, UT, each with its own benefits and trade-offs. A financial advisor is available to help you understand the advantages and disadvantages of each choice and choose the one ideal for your unique situation. Generally speaking, 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 retirement savings vehicles that provide specific tax advantages. In a conventional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but money taken out during retirement are taxable. In contrast, Roth IRAs require contributions from post-tax earnings, but retirement withdrawals that qualify, including earnings, are tax-free. In both accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, 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 qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs offers a way to save for retirement that allows those who are self-employed to contribute a percentage of their net earnings. Contributions must come from an employer, so, as a sole proprietor, you (the employee) are limited to contributions from the employer role above the 25% you (the employer) already contributed. If you have employees, you must contribute the same amount for them as you do for yourself. You may choose to contribute a fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA may be ideal for entrepreneurs facing periods of inconsistent earnings. In contrast to some alternatives, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs work like traditional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed can set up 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 allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed designed for businesses with no employees or when the sole employee is your spouse. This type of plan function similarly to traditional employer-managed 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the increased savings potential can be balanced by 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: This plan is exclusively for business owners and their spouses can set up 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:
- Employee contributions of up to 100% of your self-employment income, up to the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 if you are 50 or older, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) are limited to 25% of your net earnings from self-employment, 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 if you're over age 50 (as of 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that delivers a fixed, predetermined benefit to self-employed individuals upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but enables participants to determine exactly how much they'll get in retirement. This plan is best suited for high-earning entrepreneurs who want to save a large amount for retirement and are prepared to contribute substantial contributions. Contributions offer tax-deferred growth, and withdrawals are taxable as income during retirement.
Eligibility: Entrepreneurs running an owner-only business or with a small staff of under five may establish an individual defined benefit plan, but it's most commonly advised for people above age 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans are:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% but are open to increasing contributions
- Businesses that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The cap on contributions must be determined by an actuary based on your financial situation, age, and savings targets. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Salt Lake City, UT for Your Self-Employed Retirement Plan
A financial advisor in Salt Lake City, UT specialized in self-employed retirement plans is an essential partner for those working for themselves. They offer the knowledge to assist understand the intricacies of saving for retirement and craft a personalized approach that reflects your aspirations. Your advisor in Salt Lake City, UT will assess where you stand financially, understand your risk tolerance, and assist you in choosing wisely about saving and investing for retirement. A key part of what we do for you includes:
- Assist in selecting a plan that aligns with your objectives and circumstances
- Further adapt the plan to fit you personally even further
- Create a written plan as required by IRS rules
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Track and fine-tune your plan when necessary
- Deliver continuous support and financial insights to help you navigate your retirement journey
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Salt Lake City, UT: Correct Capital's Process
Self-employed individuals in Salt Lake City, UT who don’t have the time or expertise to handle their self-employed retirement plan on their own often feel overwhelmed when faced with their choices. With Correct Capital, our Salt Lake City, UT financial advisors handle the bulk of your retirement planning for you, to help make meeting your future savings targets as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can help understand if our services align for you and your business. This initial call lets us learn about your needs with zero commitment 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 present financial standing, and your future objectives. This allows us to put together a tailored approach designed just for you.
- Review Your Plan: When we finalize a plan based on the information you provide, we'll sit down with you and review your plan thoroughly to ensure you understand it and understand how it best correlates to your needs.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can initiate your savings journey. As time goes on, we'll check in and review your strategy to keep it tailored to your evolving circumstances.
Our Salt Lake City, UT financial advisors and retirement plan consultants act 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 Salt Lake City, UT 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 Salt Lake City, UT
You don't see your business as "just a business", and your Salt Lake City, UT financial advisors need to offer more than just good financial guidance. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to deliver customized self-employed retirement plans. To every client in Salt Lake City, UT, 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.
