Self-employed retirement plans Santa Ana, CA. The flexibility of owning your own business in Santa Ana, CA is one of the greatest advantages of having a self-directed career. That said, this flexibility often comes with a lack of security, especially when it comes to retirement savings, 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 understanding their retirement options. In addition to achieving a financially stable retirement, seeking advice from a financial advisor in Santa Ana, CA to set up your self-employed retirement plan offers significant tax advantages that help your business to grow and succeed.
Few Santa Ana, CA investment consulting and retirement planning firms truly grasp the challenges faced by self-employed individuals quite like 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 helping businesses with their retirement planning needs. We recognize that your goals for your business and retirement go far beyond simple financial figures, and we are dedicated to offer customized solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Santa Ana, CA, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a entrepreneurial financial advisor in Santa Ana, CA today.
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Why Santa Ana, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also provide real benefits today. Offering flexibility in contributions to significant tax savings, working with a financial advisor in Santa Ana, CA allows you to create your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
For those with fluctuating income over time, a plan like a SEP IRA or Solo 401(k) offers the freedom to adjust how much you save:
- Customizable Contributions: Set aside more during successful years and cut back when your earnings dip, ensuring your plan aligns with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, enabling you to withdraw without tax penalties in the future—a wise move if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, helping you keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you may be eligible for state-specific tax breaks as a sole proprietor. These regional incentives can make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can take advantage of a credit of up to 50% of the first $2,000 put into a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement goes beyond just 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 serves to reduce risk while helping to grow your savings.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business helps you avoid dipping into savings during tough times and incurring penalties.
Plan for the Future of Your Santa Ana, CA Business
Retirement planning enables you to think through what’s next with your Santa Ana, CA business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and won’t be included in the sale. These accounts ensure the reliable income you’ll need later on. It’s important to note that while selling your business results in a capital gain, retirement plan contributions are capped at annual limits (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, including catch-up contributions, according to plan rules).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you might face when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts ensure a stable foundation as you make this shift. You might want to partner with a financial advisor who specializes in succession planning and retirement accounts to help with taxes associated with the transaction.
With the proper savings strategy, you gain control over your financial future, lower your tax bill, and create a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Santa Ana, CA Now?
There’s no denying that time is one of the most valuable resources when it comes to saving for retirement. Getting a head start not only helps you grow a bigger financial cushion but also reduces the pressure of catching up later in life. This is why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement could lead to a substantial impact on the amount you’ll have when you reach retirement age. The main reason is compound interest—the financial principle where your investments generate earnings, and those returns, then, accumulate even more returns. The longer your money has to grow, the larger the effect of this compounding process.
Example: Alex and Taylor are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but saves $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex puts in $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
Small, consistent savings made consistently often create substantial growth. Here’s a simple scenario showing the effect of consistent growth:
- Starting at age 25: Putting aside $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: Saving the same $200 per month leaves you with only $235,412.97* by age 65—a gap of over $260,000, simply due to a 10-year delay.
Saving early, the lower your annual savings needs each year to meet your retirement goals.
*The numbers shown in this scenario represent estimates derived from NerdWallet’s Compound Interest Calculator, based on 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 for illustrative purposes only and are not a promise of future results. Outcomes may change depending on variables including market conditions, fees, and your unique situation. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Santa Ana, CA, it can be tempting to focus more on reinvesting in your business rather than saving for retirement. That said, starting a plan now allows you to:
- Benefit from tax-free future growth or tax-free withdrawals in the future.
- Benefit from adjustable savings that align with your income.
- Create a safety net that offers peace of mind, no matter how your business changes.
Starting early, the less you’ll have to worry about catching up later in life. Saving for retirement now means managing your financial future and giving yourself the opportunity to concentrate on your goals—both for your retirement years and your Santa Ana, CA business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for those working for themselves in Santa Ana, CA, each providing its own benefits and trade-offs. A financial advisor will guide you to learn about the pros and cons of each plan and choose the one most suitable for your needs. In most cases, your self-employed retirement plan options in Santa Ana, CA are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include specific tax advantages. In a conventional IRA, contributions are typically tax-deductible, and returns grow free of current taxes, but retirement distributions are taxable. In contrast, Roth IRAs require contributions using income already taxed, but retirement withdrawals that qualify, including earnings, are not taxed. In both types of accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, both traditional and Roth IRAs are available to anyone with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs offers a way to save for retirement that permits entrepreneurs to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a independent business owner, you (the employee) are limited to contributions from the employer role beyond the 25% you (the employer) have designated. 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 fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA works well for entrepreneurs facing fluctuating revenue streams. Compared to other retirement options, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs operate like traditional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
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
For self-employed individuals, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), commonly known as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed meant for companies that have no employees or where the only employee is a spouse. Solo 401(k)s are similar to employer-sponsored 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the increased savings potential can be balanced by more limited investment options. 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: For self-employed individuals with a solo 401(k) plan, you can make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employment income, up to the annual contribution limit. For 2025, the limits will be $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) are limited to 25% of your net earnings from self-employment, which is calculated as net profits less half of your self-employment tax and the employee contributions you made.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (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 delivers a fixed, predetermined benefit to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine exactly how much they'll have in retirement. This option is ideal for higher-income professionals who want to save a substantial amount for retirement and are prepared to contribute larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxable as income upon retirement.
Eligibility: Any self-employed individual running an owner-only business or with a small staff of under five are eligible to open an individual defined benefit plan, but it's generally recommended for those over 50 who make $250,000 or more annually. Typically, good candidates for defined benefit plans include:
- Partners or owners who desire to contribute more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% with plans to contribute more
- Organizations showing 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 is calculated by an actuary determined by your income, age, and retirement goals. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Santa Ana, CA for Your Self-Employed Retirement Plan
A financial advisor in Santa Ana, CA experienced with retirement plans for the self-employed serves as an essential partner for self-employed individuals. They have the expertise to help navigate the complexities of retirement planning and develop a personalized approach that reflects your aspirations. A financial advisor in Santa Ana, CA will evaluate your financial situation, identify your risk preferences, and assist you in choosing wisely about saving and investing for retirement. Included in what we do for you includes:
- Guide you in choosing a plan that best fits your needs and goals
- Further adapt the plan to your specific situation even further
- Formalize a plan in writing in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Ensure you comprehend the plan's terms
- Review and modify your plan when necessary
- Provide ongoing education and advice to help you navigate your retirement journey
- Maximize what you receive in retirement by making the most of your social security
Self-Employed Retirement Plans in Santa Ana, CA: Correct Capital's Process
Entrepreneurs in Santa Ana, CA who lack the time, interest, or knowledge to handle their retirement savings strategy on their own often feel overwhelmed as they look at their choices. At Correct Capital, our Santa Ana, CA financial advisors handle the majority of your savings plan setup for you, and strive to ensure 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 allows us to understand what you're looking for with no pressure or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll request information, including how many employees you have (if any), your current financial situation, and your long-term savings targets. This helps us create a tailored approach designed just for you.
- Review Your Plan: When we finalize a plan using the information you provide, we'll schedule a meeting and discuss your plan in detail to make sure it's clear 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 start saving. Over the course of our partnership, we'll have regular meetings and track your progress to keep it tailored to your evolving circumstances.
Our Santa Ana, CA financial advisors and retirement plan consultants are fiduciary advisors, which means they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Santa Ana, 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 Santa Ana, CA
You don't see your business as "just a business", and your Santa Ana, CA financial advisors should provide more than just good financial guidance. At Correct Capital, we make it a priority to understand our clients and their businesses to provide customized self-employed retirement plans. To every client in Santa Ana, CA, we provide our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To get started on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
