Self-employed retirement plans Savannah, GA. The freedom of being your own boss in Savannah, GA offers many benefits of working for yourself. That said, this flexibility often comes with potential drawbacks, particularly in terms of retirement savings, because you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many could benefit from exploring their options. In addition to enjoying a more comfortable retirement, working with a financial advisor in Savannah, GA to set up your self-employed retirement plan offers significant tax advantages that help both you and your business to thrive.
Few Savannah, GA wealth management and retirement planning firms understand the needs of small business owners better than Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and Correct Capital 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 work tirelessly to offer tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Savannah, GA, or call Correct Capital at 877-930-401k or contact us online to talk to a entrepreneurial financial advisor in Savannah, GA today.
Why Savannah, GA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also offer real benefits today. From flexible contributions to significant tax savings, working with a financial advisor in Savannah, GA allows you to design your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) offers the flexibility to adjust how much you save:
- Customizable Contributions: Save extra during profitable years and scale back when income is lower, so that your plan aligns with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw tax-free later—a wise move if you expect your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans provide powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA shrink your tax liability, allowing you to keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to compound.
- State-Specific Incentives: Based on your location, you could qualify for state-specific deductions as a sole proprietor. These state-level incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can claim a tax credit of up to 50% of the first $2,000 they contribute a retirement plan, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future isn’t only about how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Allocating your investments across different asset classes like stocks and bonds is a smart way to minimize exposure to risk while helping to grow your savings.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business ensures you don’t using your retirement funds during tough times and incurring penalties.
Plan for the Future of Your Savannah, GA Business
A thoughtful retirement strategy enables you to think through what’s next with your Savannah, GA business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and won’t be included in the sale. These plans offer the reliable income you’ll need in the future. Remember that while selling a business often leads to a capital gain, deposits into these plans are subject to yearly maximums (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, factoring in catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you might face when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts provide a stable foundation during the change. You can also work with a financial advisor with expertise in succession and retirement planning to help with taxes on the sale.
With the proper savings strategy, you manage your financial future, lower your tax bill, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Savannah, GA Now?
Time remains one of the most valuable assets for building your retirement fund. Starting early not only helps you grow a more substantial retirement fund but also lowers the financial burden of playing catch-up as you get older. The following are reasons why it is beneficial to start now:
The Cost of Waiting
Waiting to start your retirement fund could lead to a major impact on the amount you’ll have when you retire. The primary reason is compound interest—the financial principle where your investments grow, and those returns, in turn, earn even more returns. The longer your money has to grow, the greater the impact of compounding.
Example: Alex and Taylor are both self-employed professionals. 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, with an assumption of 7% annual return:
- Alex puts in $180,000 and ends up with $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time may result in significant growth. Consider this example showing the power of compounding:
- Starting at age 25: By investing $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll end up with $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.
The earlier you begin, the lower your annual savings needs each year to achieve your retirement goals.
*The numbers shown in this scenario 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. The scenarios provided are meant to provide general guidance and cannot predict actual future outcomes. Outcomes may change depending on elements like market conditions, fees, and individual circumstances. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Savannah, GA, it might seem easier to put more emphasis on reinvesting in your business instead of saving for retirement. Even so, initiating a plan now gives you the chance to:
- Benefit from tax-deferred growth or withdrawals without taxes later on.
- Take advantage of contribution flexibility that change with your earnings.
- Create a long-term safety measure that provides security, no matter how your business evolves.
Starting early, the less you’ll be required to worry about playing catch-up later in life. Taking steps toward your retirement goals today means taking control of your financial future and allowing yourself the opportunity to turn your attention to your goals—both for your future retirement and your Savannah, GA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for self-employed individuals in Savannah, GA, each providing its own advantages and considerations. A financial advisor can help you evaluate the benefits and drawbacks of each choice and identify the one best suited for your unique situation. Typically, your self-employed retirement plan options in Savannah, GA consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that offer specific tax advantages. In a conventional IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but retirement distributions are subject to income tax. In contrast, Roth IRAs require contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are exempt from taxes. In both accounts, withdrawals don’t incur penalties if you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs are open to those with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $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 allows entrepreneurs to contribute a percentage of their net earnings. Contributions are strictly employer contributions an employer, so, as a self-employed individual, you (the employee) would not be able to contribute beyond the 25% you (the employer) already contributed. If you have employees, you must contribute the same amount for them as you do for yourself. You may choose to contribute a flat-dollar amount or a percentage of wages to employee accounts. This type of plan may be ideal for entrepreneurs facing fluctuating revenue streams. In contrast to some alternatives, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs work like standard IRAs, where contributions are made with pre-tax money and withdrawals are taxed as income.
Eligibility: Both employers and self-employed individuals can establish 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 amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed intended for companies that have no employees or when the sole employee is your spouse. Solo 401(k)s function similarly to standard 401(k) plans, and allow you to contribute as both the employer and the employee with pre-tax money. This allows for more savings than SEPs or IRAs; however, the extra savings options may be offset by more constrained investment avenues. Using a solo 401(k), you can make either traditional or Roth deferrals, which have the same tax benefits as their IRA contribution counterparts.
Eligibility: Only 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 can make two types of contributions:
- Employee contributions of up to 100% of your self-employment income, up to 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.
- Employer profit-sharing contributions (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.
The total contribution cannot exceed $70,000, or $77,500 if you're over age 50 (for 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 guarantees a pre-established payout to business owners upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but lets individuals clearly understand exactly how much they'll get in retirement. This plan is ideal for wealthier self-employed individuals who want to save a significant sum for retirement and can commit to making substantial contributions. Contributions offer tax-deferred growth, and withdrawals incur taxes as income upon retirement.
Eligibility: Self-employed professionals running an owner-only business or with a small staff of under five may establish an individual defined benefit plan, but it's typically recommended for those over 50 who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans tend to be:
- Business owners or partners who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% and are willing to do more
- Businesses that have demonstrated consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The cap on contributions is calculated by an actuary determined by your financial situation, age, and savings targets. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Savannah, GA for Your Self-Employed Retirement Plan
A financial advisor in Savannah, GA focused on self-employed retirement strategies can be an invaluable resource for self-employed individuals. They offer the knowledge to assist navigate the complexities of retirement planning and craft a personalized approach that reflects your aspirations. A financial advisor in Savannah, GA will review your finances, identify your risk preferences, and help you in selecting the best options about saving and investing for retirement. A key part of what we do for you involves:
- Help you choose a plan that best fits your needs and goals
- Customize the plan to your specific situation even further
- Formalize a plan in writing in accordance with IRS guidelines
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Review and modify your plan as needed
- 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 Savannah, GA: Correct Capital's Process
Self-employed individuals in Savannah, GA who don’t have the time or expertise to handle their self-employed retirement plan themselves often feel overwhelmed as they look at their available plans. At Correct Capital, our Savannah, GA financial advisors manage the bulk of your savings plan setup for you, to help 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 four simple steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can help understand if we're a good fit for you and your business. This brief introduction allows us to understand what you're looking for with no pressure or extensive time commitment 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 long-term savings targets. This enables us to craft a custom plan designed just for you.
- Review Your Plan: After we put together a plan using the information you provide, we'll sit down with you and discuss your plan in detail to ensure you understand it and understand how it best correlates to your needs.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can begin contributing. As time goes on, we'll check in and track your progress to ensure it stays suited to your needs.
Our Savannah, GA financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Savannah, GA include:
- Investment Planning
- Retirement Financial Planning
- Investment Management
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
Call Correct Capital for Your Self-Employed Retirement Plan in Savannah, GA
Your business isn't "just a business" to you, and your Savannah, GA financial advisors need to offer more than just good financial guidance. At Correct Capital, we make it a priority to understand our clients and their businesses to provide tailored self-employed retirement plans. To every client in Savannah, GA, we provide 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, call Correct Capital today at 877-930-401k or contact us online.
