Self-employed retirement plans San Antonio, TX. The freedom of running your own company in San Antonio, TX is one of the greatest advantages of having a self-directed career. However, this flexibility often comes with certain challenges, notably when it comes to building your retirement fund, as you don't have the option of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, although many could benefit from looking into other possibilities. In addition to achieving a more comfortable retirement, partnering with a financial advisor in San Antonio, TX to establish your self-employed retirement plan offers significant tax advantages that enable both you and your business to thrive.
Few San Antonio, TX wealth management 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 (learn more about our story here), and our firm have a rich history of assisting business owners in their retirement planning needs. We understand that your goals for your business and retirement go far beyond basic numbers, and we are dedicated to provide tailored solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in San Antonio, TX, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a small business financial advisor in San Antonio, TX today.
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Why San Antonio, TX Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver real benefits today. With customizable contribution options to considerable tax savings, working with a financial advisor in San Antonio, TX enables you to customize your retirement plan to align with 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 freedom to tailor how much you save:
- Customizable Contributions: Set aside more during successful years and scale back when your earnings dip, so your plan fits your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw without tax penalties in the future—an advantageous choice 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 SIMPLE IRA lower your taxable income, so you can keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, which gives your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for extra tax breaks as a sole proprietor. These regional incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a credit of up to 50% of the first $2,000 contributed a retirement plan, further reducing 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 varied stocks, bonds, and alternatives serves to mitigate financial risk while still growing your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net helps you avoid using your retirement funds during financial hardships and risking extra costs.
Plan for the Future of Your San Antonio, TX Business
A thoughtful retirement strategy can assist you prepare for what’s next with your San Antonio, TX business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and don’t transfer with the business. These accounts ensure the financial stability you’ll need later on. Remember that while the sale of a business usually creates a capital gain, deposits into these plans are restricted by contribution limits (e.g., as much as $7,000 for IRAs or up to $70,000 for Solo 401(k)s, including catch-up contributions, based on plan compensation).
- Minimizing Taxes: Using retirement contributions wisely helps lower the taxes you’ll owe when you transfer your business.
- Succession Planning: For those winding down or handing over their business, your retirement accounts provide a stable foundation as you make this shift. You can also seek advice from a financial advisor who specializes in succession planning and retirement accounts to help with taxes during the sale.
With the proper savings strategy, you manage your financial future, cut down your tax obligations, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in San Antonio, TX Now?
Time remains one of the most valuable factors when it comes to saving for retirement. Getting a head start not only lets you accumulate a more substantial retirement fund but also reduces the pressure of playing catch-up as you get older. Here’s why it is beneficial to start now:
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 financial principle where your investments earn returns, and those returns, in turn, generate even more returns. The more time your money has to grow, the more significant the effect of this compounding process.
Example: Taylor and Alex 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 contributes $7,500 annually to bridge the gap.
By age 65, using a projected 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
Even modest contributions invested steadily may result in significant growth. Take a look at this scenario showing the impact 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 grow to approximately $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month yields only $235,412.97* by age 65—a difference of over $260,000, all because of a 10-year delay.
The earlier you begin, 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, assuming a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. The scenarios provided are meant to provide general guidance and do not guarantee future performance. Actual results may vary based on factors such as market conditions, fees, and personal factors. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in San Antonio, TX, it might seem easier to prioritize reinvesting in your business instead of saving for retirement. However, initiating a plan now gives you the chance to:
- Benefit from tax-free future growth or tax-free withdrawals later on.
- Enjoy adjustable savings that align with your income.
- Create a long-term safety measure that ensures stability, no matter how your business changes.
Starting early, the less you’ll need to worry about making up for lost time later in life. Building your retirement savings today means gaining control over your financial future and giving yourself the ability to focus on your objectives—both for your retirement years and your San Antonio, TX business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for entrepreneurs in San Antonio, TX, each with its own advantages and considerations. A financial advisor is available to help you understand the advantages and disadvantages of each choice and determine the one best suited for your unique situation. In most cases, your self-employed retirement plan options in San Antonio, TX are:
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, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but retirement distributions are subject to income tax. In contrast, Roth IRAs require contributions using income already taxed, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are available to anyone with an earned 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: The Simplified Employee Pension IRA offers a way to save for retirement that permits entrepreneurs to save a percentage of their net business profits. Contributions are strictly employer contributions an employer, so, as a self-employed individual, 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 have the flexibility to contribute a flat-dollar amount or a percentage of wages to employee accounts. SEP IRAs works well for businesses that experience periods of inconsistent earnings. In contrast to some alternatives, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs function like standard IRAs, where the contributions are tax-deferred and withdrawals are taxed as income.
Eligibility: Both employers and self-employed individuals can open a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses without employees or if the only employee is your spouse. These plans are similar to standard 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the increased savings potential often come with more constrained investment avenues. 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 can set up and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you can make two types of contributions:
- Deferrals as an employee of up to 100% of your earned income from self-employment, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) cannot exceed 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.
Your combined contributions must not surpass $70,000, or $77,500 if you're over age 50 (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 guarantees a fixed, predetermined benefit to business owners upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but enables participants to determine the precise amount they'll have in retirement. This plan is best suited for high-earning entrepreneurs who are focused on saving a large amount for retirement and are prepared to contribute sizeable contributions. Contributions are tax deferred, and withdrawals are taxed as income during retirement.
Eligibility: Self-employed professionals managing a one-person company or employing fewer than five people can open an individual defined benefit plan, but it's most commonly advised for individuals aged 50+ who make $250,000 or more annually. Typically, good candidates for defined benefit plans include:
- Business owners or partners who want to invest more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% but are open to increasing contributions
- Companies with proven consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The contribution limit must be determined by an actuary using your income, age, and retirement goals. Contribution limits are updated yearly.
The Importance of a Financial Advisor in San Antonio, TX for Your Self-Employed Retirement Plan
A financial advisor in San Antonio, TX specialized in self-employed retirement plans is an invaluable resource for those working for themselves. They bring the skills needed to understand the intricacies of saving for retirement and craft a personalized approach that aligns with your goals. A financial advisor in San Antonio, TX will assess where you stand financially, determine how much risk you’re comfortable with, and assist you in making informed decisions about saving and investing for retirement. Part of what we do for you includes:
- Help you choose a plan that aligns with your objectives and circumstances
- Customize the plan to your needs 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
- Track and fine-tune your plan when necessary
- Deliver continuous support and financial insights throughout your retirement planning process
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in San Antonio, TX: Correct Capital's Process
San Antonio, TX business owners who don’t have the time or expertise to oversee their retirement savings strategy on their own can become overwhelmed by their choices. Through our team at Correct Capital, our San Antonio, TX financial advisors handle the lion's share of your retirement strategy for you, working to make meeting your retirement goals as hassle-free 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: It only takes 20 minutes, a member of our advisor team will assess if our services align for you and your business. This initial call helps us understand what you're looking for with zero commitment or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including whether you have employees, your existing financial picture, and your retirement goals. This helps us create a tailored approach suited specifically for your needs.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll schedule a meeting and go over your plan in detail to ensure you understand it and show how it aligns with your goals.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can begin contributing. As time goes on, we'll have regular meetings and monitor your plan to make sure it remains aligned with your goals.
Our San Antonio, TX financial advisors and retirement plan consultants act as fiduciary advisors, which means they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in San Antonio, TX 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 San Antonio, TX
Your business isn't "just a business" to you, and your San Antonio, TX financial advisors must deliver more than basic financial recommendations. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to deliver tailored self-employed retirement plans. We offer all our San Antonio, TX clients our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To begin on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
