Self-employed retirement plans San Bernardino, CA. The independence of owning your own business in San Bernardino, CA is one of the best aspects of having a self-directed career. However, this freedom can come with a lack of security, notably regarding retirement savings, 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 exploring their options. In addition to having a more secure retirement, seeking advice from a financial advisor in San Bernardino, CA to establish your self-employed retirement plan offers significant tax advantages that enable both you and your business to thrive.
Few San Bernardino, CA investment consulting and retirement planning firms understand the needs of small business owners quite like Correct Capital. The father of our founder was a small business owner himself (check out our story here), and Correct Capital take pride in assisting business owners in their retirement planning needs. We recognize that your professional and personal aspirations extend well past basic numbers, and we are dedicated to create customized solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in San Bernardino, CA, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a small business financial advisor in San Bernardino, CA today.
Why San Bernardino, CA 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 substantial tax savings, partnering with a financial advisor in San Bernardino, CA allows you to customize your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income over time, a plan like a SEP IRA or Solo 401(k) gives you the option to tailor how much you save:
- Customizable Contributions: Set aside more during successful years and cut back when revenues are down, ensuring your plan fits your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, so you can withdraw your savings tax-free down the road—an advantageous choice if you believe your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, so you can keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to accumulate.
- State-Specific Incentives: Based on your location, you may be eligible for extra tax breaks as a business owner. These state-level incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements 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
Planning for a safe retirement requires more than how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across varied asset classes like stocks and bonds is a smart way to minimize exposure to risk while continuing to build your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business ensures you don’t tapping into your nest egg during financial hardships and incurring penalties.
Plan for the Future of Your San Bernardino, CA Business
Preparing for retirement also helps you think through what’s next with your San Bernardino, CA business:
- Selling Your Business: If you’re planning to sell, plans like SEP IRAs or Solo 401(k)s remain yours and are not part of the sale. These plans ensure the reliable income you’ll need during retirement. Keep in mind that while selling your business results in a capital gain, retirement plan contributions are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or up to $70,000 for Solo 401(k)s, factoring in catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you’ll owe when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings offer financial security during the change. You may also work with a financial advisor experienced in both succession and retirement strategies to reduce taxes on the sale.
With the proper savings strategy, you gain control over your financial future, reduce your tax burden, 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?
There’s no denying that time is one of the most important resources in retirement planning. Getting a head start not only allows you to build a larger nest egg but also minimizes the stress of catching up later in life. The following are reasons why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund can have a significant impact on the total you’ll have when you stop working. The primary reason is compound interest—the financial principle where your investments generate earnings, and those returns, then, earn even more returns. The more time your money has to grow, the greater the impact of compounding.
Example: Alex and Taylor are both entrepreneurs. Their shared goal is 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 saves $7,500 annually to make up for lost time.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and achieves a total of $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Even modest contributions made consistently may result in impressive growth. Take a look at this scenario 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 grow to approximately $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 difference of over $260,000, just from a 10-year delay.
Starting sooner, the less you need to save each year to achieve your retirement goals.
*The numbers shown in this scenario are based on 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. The scenarios provided are intended as illustrative examples and are not a promise of future results. Outcomes may change due to variables including market conditions, fees, and personal factors. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in San Bernardino, CA, it is often the case that you put more emphasis on reinvesting in your business over saving for retirement. However, starting a plan now gives you the chance to:
- Leverage growth that is tax-deferred or penalty-free withdrawals later on.
- Take advantage of adjustable savings that change with your income.
- Create a long-term safety measure that provides security, no matter how your business changes.
The sooner you start, the less you’ll be required to worry about catching up later in life. Taking steps toward your retirement goals today means managing your financial future and creating for yourself the ability to focus on your goals—both for your golden years and your San Bernardino, CA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for those working for themselves in San Bernardino, CA, each with its own benefits and trade-offs. A financial advisor is available to help you understand the advantages and disadvantages of each plan and determine the one best suited for your needs. Typically, your self-employed retirement plan options in San Bernardino, CA are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that offer distinct tax benefits. In a standard IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but money taken out during retirement are taxable. In contrast, Roth IRAs require contributions are made with after-tax income, but qualified withdrawals in retirement, including earnings, are not taxed. In both accounts, withdrawals don’t incur 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 available to anyone with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs is a retirement plan that permits 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 more than 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. It's your choice whether to contribute a set monetary value or a percentage of wages to employee accounts. This type of plan may be ideal for entrepreneurs facing cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs lack costly startup or administrative fees.
SEPs work like traditional IRAs, where the contributions are tax-deferred 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 must not exceed:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, also called 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 function similarly to employer-sponsored 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This offers more savings than 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: Only business owners and their spouses are eligible to open and contribute to a solo 401(k).
Contribution Limits: For self-employed individuals with a solo 401(k) plan, you have the ability to make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employment income, capped at the annual contribution limit. The contribution limits for 2025 include $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) cannot exceed 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.
Total contributions are capped at $70,000, or $77,500 if you're over age 50 (as of 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan is a retirement option that provides 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 lets individuals clearly understand what they'll receive in retirement. This option is best suited for high-earning self-employed individuals who aim to accumulate a large amount for retirement and are willing to make larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxable as income upon retirement.
Eligibility: Self-employed professionals operating a solo business or with less than five employees can open an individual defined benefit plan, but it's typically recommended for those over 50 who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans include:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% but are open to increasing contributions
- Companies that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The contribution limit is calculated by an actuary using your financial situation, age, and savings targets. 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 focused on self-employed retirement strategies can be an important asset for entrepreneurs. They have the expertise to help understand the intricacies of saving for retirement and design a tailored strategy that matches your objectives. A financial advisor in San Bernardino, CA will evaluate your financial situation, identify your risk preferences, and guide you in making informed decisions about saving and investing for retirement. Part of what we do for you involves:
- Help you choose a plan that aligns with your objectives and circumstances
- Tailor the plan to your specific situation even further
- Formalize a plan in writing as required by IRS rules
- Organize a trust plan to manage your 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
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in San Bernardino, CA: Correct Capital's Process
San Bernardino, CA business owners who aren’t equipped with the time or understanding to oversee their own retirement planning independently may end up overwhelmed by their options. With Correct Capital, our San Bernardino, CA financial advisors take on the lion's share of your savings plan setup for you, working to make meeting your retirement goals as straightforward as possible for you. We are here to assist you in setting up your self-employed retirement plan in four simple 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 brief introduction helps us get a sense of your goals with no pressure or significant effort on your part.
- Gather Information: Should we agree to proceed, we'll request information, including your employee count, your existing financial picture, and your long-term savings targets. This allows us to put together a custom plan suited specifically for your needs.
- Review Your Plan: When we finalize a plan based on the information you provide, we'll meet with you and review your plan step by step to help you fully grasp it and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can begin contributing. As time goes on, we'll meet with you and track your progress to keep it tailored to your evolving circumstances.
Our San Bernardino, CA financial advisors and retirement plan consultants are fiduciary advisors, meaning they are committed by law and ethics to act in your best interest.
Other financial advisory services we offer in San Bernardino, CA include:
- 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
- High-Net-Worth Wealth Management
Call Correct Capital for Your Self-Employed Retirement Plan in San Bernardino, CA
To you, your business is more than "just a business", and your San Bernardino, CA financial advisors need to offer 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 provide 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 take the first step on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
