Self-employed retirement plans San Bernardino, CA. The independence of running your own company in San Bernardino, CA is one of the greatest advantages of being self-employed. However, this freedom sometimes brings with potential drawbacks, particularly regarding building your retirement fund, since you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off looking into other possibilities. In addition to having a more comfortable retirement, partnering with a financial advisor in San Bernardino, CA to establish your self-employed retirement plan delivers significant tax advantages that allow your business to grow and succeed.
Few San Bernardino, CA wealth management and retirement planning firms understand the needs of self-employed individuals as well as Correct Capital. Our founder's father was a small business owner himself (check out our story here), and we take pride in assisting business owners in their retirement planning needs. We recognize that your business and retirement aspirations extend well past simple financial figures, and we work tirelessly to create personalized solutions to meet your unique goals. Continue exploring to find out about your self-employed retirement plan options in San Bernardino, CA, or reach out to Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in San Bernardino, CA today.
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Why San Bernardino, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also provide tangible benefits today. With customizable contribution options to considerable tax savings, working with a financial advisor in San Bernardino, CA helps you design your retirement plan to suit your unique financial situation.
Flexibility That Fits Your Income
If your income changes from year to year, a plan like a SEP IRA or Solo 401(k) offers the option to adjust how much you save:
- Customizable Contributions: Save extra during profitable years and scale back when revenues are down, so that 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 your savings tax-free down the road—a wise move if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, allowing you to 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 accumulate.
- State-Specific Incentives: Based on your location, you could qualify for additional tax breaks as a self-employed individual. These state-level incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can take advantage of 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
Building a secure retirement requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Allocating your investments across a mix of stocks, bonds, and other assets can help mitigate financial risk while helping to grow your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business helps you avoid dipping into savings during financial hardships and facing tax penalties.
Plan for the Future of Your San Bernardino, CA Business
Preparing for retirement enables you to prepare for what’s next with your San Bernardino, CA business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s stay in your name and don’t transfer with the business. These plans offer the steady income you’ll need in the future. It’s important to note that while the sale of a business usually creates a capital gain, contributions to retirement accounts are capped at annual limits (e.g., a maximum of $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you’ll owe when you sell your business.
- Succession Planning: If you’re passing the business on, your nest egg offer the funds you need through the transition. You can also partner with a financial advisor who specializes in succession planning and retirement accounts to reduce taxes on the sale.
With the proper savings strategy, you gain control over your financial future, lower your tax bill, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in San Bernardino, CA Now?
Time remains one of the most crucial resources when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a larger nest egg but also reduces the stress of saving aggressively in the future. Here’s why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund could lead to a significant impact on the total you’ll have when you stop working. The main reason is compound interest—the concept where your investments grow, and those returns, subsequently, generate even more returns. The greater time span your money has to grow, the larger the effect of this compounding process.
Example: Alex and Taylor are both entrepreneurs. 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 puts away $7,500 annually to catch up.
By age 65, using a projected 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments made consistently often create substantial 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 expected yearly growth rate of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month leaves you with only $235,412.97* by age 65—a shortfall of over $260,000, simply due to a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to achieve your retirement goals.
*These calculations are estimates calculated using NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are intended as illustrative examples and are not a promise of future results. Your individual results may differ due to elements like 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
As a self-employed person in San Bernardino, CA, it can be tempting to prioritize reinvesting in your business over saving for retirement. However, beginning a plan now enables you to:
- Leverage growth that is tax-deferred or tax-free withdrawals down the road.
- Enjoy flexible contributions that change with your earnings.
- Create a long-term safety measure that provides security, no matter how your business develops.
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 ability to concentrate on your objectives—both for your retirement years and your San Bernardino, CA business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for self-employed individuals in San Bernardino, CA, each providing its own advantages and considerations. A financial advisor can help you understand the pros and cons of each choice and identify the one best suited for your needs. Typically, your self-employed retirement plan options in San Bernardino, CA consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include key tax perks. 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 from post-tax earnings, but retirement withdrawals that qualify, including earnings, are not taxed. In both accounts, withdrawals don’t incur penalties as long as 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 an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that allows those who are self-employed to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a sole proprietor, you (the employee) would not be able to contribute beyond the 25% you (the employer) already contributed. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. It's your choice whether to contribute a flat-dollar amount or a percentage of wages to employee accounts. A SEP IRA may be ideal for companies with cycles of high revenue and low revenue. In contrast to some alternatives, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs function like traditional IRAs, where contributions are made with pre-tax money and retirement distributions are taxable.
Eligibility: Both employers and 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
As a self-employed person, the contribution you can make 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 self-employed retirement plan designed for businesses without employees or if the only employee is your spouse. This type of plan are similar to employer-sponsored 401(k) plans, and allow you to contribute as both an employer and an employee with pre-tax money. This offers more savings than SEPs or IRAs; however, the additional opportunities can be balanced by more constrained investment avenues. 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: Solo 401(k)s are available solely to business owners and their spouses may establish 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 self-employed earnings, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 for those aged 50 and above, or $34,750 for those who turn 60-63 in 2025.
- Contributions as an employer (as an employer) must not surpass 25% of your net earnings from self-employment, 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 if you're over age 50 (in 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans represents a type of retirement plan that provides a set amount to self-employed individuals upon retirement. As opposed to defined contribution plans, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine exactly how much they'll get in retirement. This option is ideal for wealthier professionals who aim to accumulate a large amount for retirement and can commit to making substantial contributions. Contributions offer tax-deferred growth, and withdrawals incur taxes as income during retirement.
Eligibility: Entrepreneurs running an owner-only business or with less than five employees are eligible to open an individual defined benefit plan, but it's generally suggested for people above age 50 who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans include:
- Partners or owners who want to invest more than $70,000 (or $77,500 for individuals 50 and older)
- Businesses currently investing 3-4% with plans to contribute more
- Companies with proven consistent profit patterns
- Business leaders over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The contribution limit requires calculation from an actuary using your income, age, and retirement goals. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in San Bernardino, CA for Your Self-Employed Retirement Plan
A financial advisor in San Bernardino, CA specialized in self-employed retirement plans can be an invaluable resource for those working for themselves. They have the expertise to help understand the intricacies of saving for retirement and develop a personalized approach that aligns with your goals. A financial advisor in San Bernardino, CA will assess where you stand financially, determine how much risk you’re comfortable with, and assist you in selecting the best options about saving and investing for retirement. A key part of what we do for you features:
- Assist in selecting a plan that best fits your needs and goals
- 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
- Offer continued financial education and guidance throughout your retirement planning process
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in San Bernardino, CA: Correct Capital's Process
San Bernardino, CA business owners who lack the time, interest, or knowledge to oversee their self-employed retirement plan themselves often feel overwhelmed by their choices. At Correct Capital, our San Bernardino, CA financial advisors handle the lion's share of your retirement planning for you, and strive to ensure meeting your financial objectives 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: In just 20 minutes, a member of our advisor team will assess if we're suited to your needs for you and your business. This initial call lets us learn about your needs with no pressure or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including your employee count, your existing financial picture, and your future objectives. This helps us create a tailored approach that aligns with your goals.
- Review Your Plan: When we finalize a plan using the information you provide, we'll schedule a meeting and review your plan thoroughly to ensure you understand it and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll put everything in place so you can initiate your savings journey. Over the course of our partnership, we'll meet with you and monitor your plan to make sure it remains aligned with your goals.
Our San Bernardino, CA financial advisors and retirement plan consultants serve 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 San Bernardino, CA 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 Bernardino, CA
Your business isn't "just a business" to you, and your San Bernardino, CA financial advisors must deliver more than basic financial recommendations. With Correct Capital, we focus on building a relationship with our clients and their businesses to deliver tailored self-employed retirement plans. We offer all our San Bernardino, CA clients our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To get started on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
