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 working for yourself. However, this freedom sometimes brings with a lack of security, particularly regarding building your retirement fund, as you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off exploring their options. In addition to achieving a more comfortable retirement, partnering with a financial advisor in Salt Lake City, UT to create your self-employed retirement plan can provide significant tax advantages that allow you to move your business forward.
Few Salt Lake City, UT financial advisory and retirement planning firms truly grasp the challenges faced by entrepreneurs better than Correct Capital. The father of our founder was a small business owner himself (check out our story here), and we have a rich history of assisting business owners in their retirement planning needs. We know that your business and retirement aspirations aren’t limited to just monetary concerns, 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 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.
Why Salt Lake City, UT Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also deliver real benefits today. With customizable contribution options to significant tax savings, partnering with a financial advisor in Salt Lake City, UT allows you to customize your retirement plan to align with your individual circumstances.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) gives you the option to modify how much you save:
- Customizable Contributions: Set aside more during successful years and scale back when income is lower, ensuring your plan fits your financial situation.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw tax-free later—a smart decision if you expect your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, allowing you to keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to compound.
- State-Specific Incentives: In some states, you might access extra deductions as a sole proprietor. These local incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can claim a tax credit of up to 50% of the first $2,000 contributed a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future isn’t only about 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 can help reduce risk while still growing your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business helps you avoid dipping into savings during tough times and risking extra costs.
Plan for the Future of Your Salt Lake City, UT Business
Preparing for retirement enables you to plan ahead for what’s next with your Salt Lake City, UT business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and don’t transfer with the business. These plans ensure the financial stability you’ll need during retirement. Keep in mind that while selling a business often leads to a capital gain, contributions to retirement accounts 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, according to plan rules).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you might face when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg provide a stable foundation during the change. You might want to seek advice from a financial advisor with expertise in succession and retirement planning to reduce taxes on the sale.
With the best-fit retirement strategy, you gain control over your financial future, lower your tax bill, and create a strong framework 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. Getting a head start not only lets you accumulate a bigger financial cushion but also minimizes the stress of saving aggressively in the future. This is why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings can have a significant impact on the savings you’ll have when you retire. The biggest reason is compound interest—the powerful process where your investments earn returns, and those returns, in turn, generate even more returns. The longer your money has to grow, the more significant the benefit of this compounding process.
Example: Taylor and Alex are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor waits until age 40 but saves $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and ends up with $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time may result in significant growth. Consider this example showing the power of consistent growth:
- Starting at age 25: If you invest $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 would result in only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
Starting sooner, the less effort required each year to reach your retirement goals.
*These calculations represent estimates generated with 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 intended as illustrative examples and do not guarantee future performance. Your individual results may differ due to factors such as market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Salt Lake City, UT, it might seem easier to focus more on reinvesting in your business over saving for retirement. However, starting a plan now gives you the chance to:
- Benefit from tax-free future growth or withdrawals without taxes down the road.
- Enjoy adjustable savings that align with your cash flow.
- Build a financial cushion that offers peace of mind, no matter how your business develops.
The sooner you start, the less you’ll be required to worry about catching up later in life. Saving for retirement now means gaining control over your financial future and giving yourself the opportunity to turn your attention to your goals—both for your golden years and your Salt Lake City, UT business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for entrepreneurs in Salt Lake City, UT, each with its own benefits and trade-offs. A financial advisor can help you understand the pros and cons of each option and identify the one ideal for your needs. Generally speaking, your self-employed retirement plan options in Salt Lake City, UT are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that provide distinct tax benefits. In a traditional IRA, contributions are typically tax-deductible, and returns grow free of current taxes, but money taken out during retirement are subject to income tax. In contrast, with Roth IRAs, you contribute are made with after-tax income, but retirement withdrawals that qualify, including earnings, are tax-free. In both accounts, withdrawals come without penalties if you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are open to those with a source of 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 is a retirement plan that permits entrepreneurs to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) would not be able to contribute above the 25% you (the employer) have designated. If you have employees, you must contribute the same amount for them as you do for yourself. It's your choice whether to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA is a good option for businesses that experience fluctuating revenue streams. In contrast to some alternatives, SEP IRAs don’t have costly startup or administrative fees.
SEPs operate like traditional IRAs, where the contributions are tax-deferred and money withdrawn is subject to income tax.
Eligibility: Both employers and self-employed individuals 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: 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 where the only employee is a spouse. This type of plan function similarly to standard 401(k) plans, and let you make contributions as both an employer and an employee with pre-tax money. This offers more savings versus SEPs or IRAs; however, the extra savings options can be balanced by more restricted investment choices. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which have the same tax benefits as their IRA contribution counterparts.
Eligibility: Only 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 earned income from self-employment, up to 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.
- Employer profit-sharing contributions (as an employer) are limited to 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the deferrals you made.
Total contributions are capped at $70,000, or $77,500 for individuals aged 50+ (in 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that guarantees a pre-established payout to business owners upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but allows self-employed individuals to know what they'll get in retirement. This option is ideal for higher-income professionals who aim to accumulate a large amount for retirement and are willing to make sizeable contributions. Contributions are tax deferred, and withdrawals incur taxes as income in retirement.
Eligibility: Self-employed professionals running an owner-only business or with a small staff of under five can open an individual defined benefit plan, but it's typically advised for individuals aged 50+ who earn at least $250,000 a year. Generally, good candidates for defined benefit plans are:
- Business owners or partners 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
- Companies showing consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The contribution limit requires calculation from an actuary based on your income, age, and retirement goals. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Salt Lake City, UT for Your Self-Employed Retirement Plan
Working with a financial advisor in Salt Lake City, UT focused on self-employed retirement strategies serves as an essential partner for self-employed individuals. They bring the skills needed to navigate the complexities of retirement planning and craft a tailored strategy that aligns with your goals. A financial advisor in Salt Lake City, UT will assess where you stand financially, identify your risk preferences, and guide you in making informed decisions about saving and investing for retirement. Included in what we do for you involves:
- Help you choose a plan that aligns with your objectives and circumstances
- Further adapt the plan to your specific situation even further
- Adopt a written plan that complies with IRS regulations
- Set up an asset trust plan
- Help you understand the plan's terms
- Track and fine-tune your plan when necessary
- Deliver continuous support and financial insights as you continue on the road to retirement
- Boost your retirement earnings by making the most of your social security
Self-Employed Retirement Plans in Salt Lake City, UT: Correct Capital's Process
Salt Lake City, UT business owners who lack the time, interest, or knowledge to handle their own retirement planning independently often feel overwhelmed by their options. At Correct Capital, our Salt Lake City, UT financial advisors take on the lion's share of your savings plan setup for you, working to make meeting your future savings targets as easy as possible for you. We can help you get set up your self-employed retirement plan in just four steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team will assess if we're a good fit for you and your business. This initial call allows us to learn about your needs with no obligation or significant effort on your part.
- Gather Information: Should we agree to proceed, we'll ask for information, including how many employees you have (if any), your current financial situation, and your retirement goals. This enables us to craft a personalized strategy designed just for you.
- Review Your Plan: When we finalize a plan based on the information you provide, we'll meet with you and discuss your plan step by step to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can initiate your savings journey. As time goes on, we'll meet with you 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, meaning they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in Salt Lake City, UT include:
- Family Wealth Planning
- Financial Planning for Business Owners
- Comprehensive Financial Planning
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 401(k) Audit
Call Correct Capital for Your Self-Employed Retirement Plan in Salt Lake City, UT
To you, your business is more than "just a business", and your Salt Lake City, UT financial advisors must deliver more than simply sound financial advice. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to create personalized self-employed retirement plans. We offer all our Salt Lake City, UT clients our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To begin on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
