Self-employed retirement plans San Francisco, CA. The freedom of running your own company in San Francisco, CA is one of the greatest advantages of working for yourself. That said, this freedom often comes with certain challenges, notably when it comes to retirement savings, since you don't have the benefit 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 financially stable retirement, seeking advice from a financial advisor in San Francisco, CA to create your self-employed retirement plan can provide significant tax advantages that allow both you and your business to thrive.
Few San Francisco, CA financial advisory and retirement planning firms truly grasp the challenges faced by small business owners better than Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (read more of our story here), and Correct Capital are deeply experienced in helping businesses with their retirement planning needs. We know that your professional and personal aspirations go far beyond just monetary concerns, and we work tirelessly to offer customized solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in San Francisco, CA, or call Correct Capital at 877-930-401k or contact us online to talk to a entrepreneurial financial advisor in San Francisco, CA today.
Why San Francisco, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver real benefits today. With customizable contribution options to substantial tax savings, working with a financial advisor in San Francisco, CA enables you to create your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) gives you the freedom to tailor how much you save:
- Customizable Contributions: Set aside more during high-income years and scale back when income is lower, so that your plan works with your current income.
- Roth Options: Choosing a Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw without tax penalties in the future—a wise move if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans deliver significant 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: Your savings grow untaxed until withdrawn, giving your money more time to accumulate.
- State-Specific Incentives: In some states, you may be eligible for extra credits as a business owner. These regional incentives help make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals 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
Planning for a safe retirement requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Distributing your investments across varied stocks, bonds, and other assets is a smart way to mitigate financial risk while still growing your savings.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net prevents you from tapping into your nest egg during tough times and risking extra costs.
Plan for the Future of Your San Francisco, CA Business
Retirement planning also helps you prepare for what’s next with your San Francisco, CA business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These savings ensure the steady income you’ll need during retirement. It’s important to note that while selling a business often leads to a capital gain, retirement plan contributions are subject to yearly maximums (e.g., as much as $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: Using retirement contributions wisely minimizes the taxes you’ll owe when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings provide a stable foundation through the transition. You may also partner with a financial advisor experienced in both succession and retirement strategies to minimize tax burdens on the sale.
With the best-fit retirement strategy, you gain control over your financial future, lower your tax bill, and establish a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in San Francisco, CA Now?
Time remains one of the most valuable resources in retirement planning. Getting a head start not only allows you to build a bigger financial cushion but also lowers the financial burden of playing catch-up as you get older. The following are reasons why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement could lead to a major impact on the amount you’ll have when you stop working. The primary reason is compound interest—the financial principle where your investments earn returns, and those returns, then, accumulate even more returns. The longer your money has to grow, the larger the impact of this growth.
Example: Taylor and Alex are both entrepreneurs. They each aim to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but saves $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor contributes $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time may result in impressive growth. Here’s a simple scenario showing the impact 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 accumulate $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month leaves you with only $235,412.97* by age 65—a shortfall 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 are 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. These examples are intended as illustrative examples and do not guarantee future performance. Outcomes may change based on factors such as market conditions, fees, and your unique situation. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
For self-employed individuals in San Francisco, CA, it can be tempting to put more emphasis on reinvesting in your business over saving for retirement. That said, initiating a plan now enables you to:
- Benefit from tax-free future growth or tax-free withdrawals down the road.
- Enjoy flexible contributions that adapt to your cash flow.
- Build a long-term safety measure that offers peace of mind, no matter how your business changes.
Getting started now, the less you’ll need to worry about making up for lost time later in life. Taking steps toward your retirement goals today means gaining control over your financial future and creating for yourself the opportunity to concentrate on your objectives—both for your golden years and your San Francisco, CA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for self-employed individuals in San Francisco, CA, each offering its own pros and cons. A financial advisor can help you understand the advantages and disadvantages of each plan and choose the one most suitable for your unique situation. In most cases, your self-employed retirement plan options in San Francisco, CA include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that offer key tax perks. In a conventional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but retirement distributions are subject to income tax. In contrast, Roth IRAs require contributions using income already taxed, but eligible distributions during retirement, including earnings, are not taxed. In both accounts, withdrawals are penalty-free provided you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, both traditional and Roth IRAs 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 qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs is a retirement plan that allows entrepreneurs to save a percentage of their net business profits. Contributions are strictly employer contributions an employer, so, as a sole proprietor, you (the employee) cannot make additional contributions beyond the 25% you (the employer) allocate. If you have employees, you must contribute the same amount for them as you do for yourself. You have the flexibility to contribute a fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA may be ideal for businesses that experience cycles of high revenue and low revenue. Unlike other plans, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs function like traditional IRAs, where contributions are made with pre-tax money and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed can set up 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 amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed meant for businesses with no employees or where the only employee is a spouse. Solo 401(k)s operate much like traditional employer-managed 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This provides more savings than SEPs or IRAs; however, the additional opportunities often come with more limited investment options. Using a solo 401(k), you can make either traditional or Roth deferrals, which share the same tax benefits as their IRA contribution counterparts.
Eligibility: This plan is exclusively for 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 can make two types of contributions:
- Employee contributions of up to 100% of your self-employed earnings, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 if you attain age 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your adjusted self-employment income, which is calculated as net profits less 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+ (as of 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that provides a set amount to entrepreneurs upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but enables participants to determine exactly how much they'll get in retirement. This option is ideal for wealthier self-employed individuals who want to save a significant sum for retirement and can commit to making sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income upon retirement.
Eligibility: Any self-employed individual managing a one-person company or with less than five employees are eligible to open an individual defined benefit plan, but it's typically recommended for individuals aged 50+ who make $250,000 or more annually. Typically, good candidates for defined benefit plans tend to be:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% with plans to contribute more
- Businesses that have demonstrated consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings 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. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in San Francisco, CA for Your Self-Employed Retirement Plan
Partnering with an advisor in San Francisco, CA focused on self-employed retirement strategies can be an important asset for self-employed individuals. They offer the knowledge to assist guide you through the challenges of retirement planning and craft a tailored strategy that reflects your aspirations. Your advisor in San Francisco, CA will assess where you stand financially, determine how much risk you’re comfortable with, and help you in making informed decisions about saving and investing for retirement. Part of what we do for you features:
- Guide you in choosing a plan that best fits your needs and goals
- Customize the plan to your needs even further
- Adopt a written plan in accordance with IRS guidelines
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan to keep it aligned with your goals
- Provide ongoing education and advice as you continue on the road to retirement
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in San Francisco, CA: Correct Capital's Process
Self-employed individuals in San Francisco, CA who don’t have the time or expertise to oversee their self-employed retirement plan themselves may end up overwhelmed as they look at their available plans. With Correct Capital, our San Francisco, CA financial advisors handle the bulk of your savings plan setup for you, to help make meeting your financial objectives 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 can determine if our services align for you and your business. This initial call lets us understand what you're looking for with no obligation or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll gather information, including how many employees you have (if any), your current financial situation, and your long-term savings targets. This helps us create a personalized strategy suited specifically for your needs.
- Review Your Plan: When we finalize a plan based on the information you provide, we'll sit down with you and review your plan step by step to help you fully grasp 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 start saving. Over the course of our partnership, we'll have regular meetings and monitor your plan to make sure it remains aligned with your goals.
Our San Francisco, CA financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in San Francisco, 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 Francisco, CA
To you, your business is more than "just a business", and your San Francisco, CA financial advisors should provide more than basic financial recommendations. At Correct Capital, we focus on building a relationship with our clients and their businesses to create tailored self-employed retirement plans. We offer all our San Francisco, CA clients our I.O.U. promise: all guidance we provide 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.
