Self-employed retirement plans Scottsdale, AZ. The independence of being your own boss in Scottsdale, AZ is one of the best aspects of working for yourself. That said, this flexibility often comes with potential drawbacks, particularly in terms of retirement savings, as you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off exploring their options. In addition to achieving a financially stable retirement, working with a financial advisor in Scottsdale, AZ to set up your self-employed retirement plan offers significant tax advantages that allow you to move your business forward.
Few Scottsdale, AZ wealth management and retirement planning firms truly grasp the challenges faced by self-employed individuals better than Correct Capital. The father of our founder 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 know that your goals for your business and retirement aren’t limited to basic numbers, and we work tirelessly to offer tailored solutions to meet your unique goals. Continue exploring to find out about your self-employed retirement plan options in Scottsdale, AZ, or give us a call at Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Scottsdale, AZ today.
Why Scottsdale, AZ Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also deliver real benefits today. Offering flexibility in contributions to considerable tax savings, partnering with a financial advisor in Scottsdale, AZ allows you to design 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) provides the option to adjust how much you save:
- Customizable Contributions: Contribute more during profitable years and reduce savings when revenues are down, so that your plan works with your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw tax-free later—a wise move if you expect your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, allowing you to keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to grow.
- State-Specific Incentives: Based on your location, you might access state-specific tax breaks as a sole proprietor. These state-level incentives help make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can take advantage of a credit of up to 50% of the first $2,000 contributed 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 about how you invest:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and other assets can help reduce risk while continuing to build your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund ensures you don’t tapping into your nest egg during challenging periods and facing tax penalties.
Plan for the Future of Your Scottsdale, AZ Business
Preparing for retirement also helps you prepare for what’s next with your Scottsdale, AZ business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These accounts can provide the steady income you’ll need in the future. It’s important to note that while selling your business results in a capital gain, contributions to retirement accounts are capped at annual limits (e.g., a maximum of $7,000 for IRAs or up to $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you might face when you sell your business.
- Succession Planning: If you’re passing the business on, your retirement savings offer the funds you need as you make this shift. You can also partner with a financial advisor who specializes in succession planning and retirement accounts to reduce taxes during the sale.
With the best-fit retirement strategy, you manage your financial future, cut down your tax obligations, and establish a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Scottsdale, AZ Now?
Time is one of the most crucial assets in retirement planning. Beginning sooner rather than later not only lets you accumulate a bigger financial cushion but also lowers the pressure of playing catch-up as you get older. This is why it makes sense to begin today:
The Cost of Waiting
Waiting to start your retirement fund could lead to a substantial impact on the amount you’ll have when you reach retirement age. The main reason is compound interest—the powerful process where your investments generate earnings, and those returns, in turn, accumulate even more returns. The more time your money has to grow, the more significant the effect of compounding.
Example: Taylor and Alex are both self-employed professionals. Their shared goal is 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 make up for lost time.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Regular, modest investments invested steadily often create substantial growth. Here’s a simple scenario showing the effect 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 end up with $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 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 reach your retirement goals.
*The numbers shown in this scenario are based on estimates derived from NerdWallet’s Compound Interest Calculator, assuming 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 meant to provide general guidance and cannot predict actual future outcomes. Your individual results may differ depending on variables including market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Scottsdale, AZ, it might seem easier to prioritize reinvesting in your business rather than saving for retirement. That said, starting a plan now enables you to:
- Take advantage of tax-deferred growth or withdrawals without taxes down the road.
- Take advantage of contribution flexibility that change with your earnings.
- Establish a safety net that provides security, no matter how your business develops.
The sooner you start, the less you’ll be required 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 dreams—both for your future retirement and your Scottsdale, AZ business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for self-employed individuals in Scottsdale, AZ, each with its own benefits and trade-offs. A financial advisor is available to help you evaluate the pros and cons of each plan and choose the one ideal for your circumstances. In most cases, your self-employed retirement plan options in Scottsdale, AZ include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that include distinct tax benefits. In a conventional IRA, contributions are typically tax-deductible, and investment earnings grow tax-deferred, but retirement distributions are subject to income tax. In contrast, Roth IRA contributions from post-tax earnings, but eligible distributions during retirement, including earnings, are tax-free. In both cases, withdrawals are penalty-free provided you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are open to those 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 offers a way to save for retirement that permits 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) would not be able to contribute above the 25% you (the employer) have designated. 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 businesses that experience cycles of high revenue and low revenue. Unlike other plans, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs work like conventional IRAs, where contributions are made with pre-tax money and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed can establish a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 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: A Solo 401(k) plan, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan intended for businesses with no employees or if the only employee is your spouse. This type of plan operate much like employer-sponsored 401(k) plans, and allow you to contribute as both the employer and the employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the extra savings options may be offset by more restricted investment choices. 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: Solo 401(k)s are available solely to business owners and their spouses are eligible to open and contribute to a solo 401(k).
Contribution Limits: If you are self-employed with a solo 401(k) plan, you can make two types of contributions:
- Deferrals as an employee 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 if you're over 50, 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 self-employment income, which is your net profit minus half of your self-employment tax and the employee contributions you made.
The total contribution cannot exceed $70,000, or $77,500 for individuals aged 50+ (in 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 set amount to business owners upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but enables participants to determine exactly how much they'll have in retirement. This option is best suited for wealthier entrepreneurs who want to save a significant sum for retirement and are prepared to contribute sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income upon retirement.
Eligibility: Entrepreneurs operating a solo business or with a small staff of under five are eligible to open an individual defined benefit plan, but it's generally advised for those over 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans are:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% with plans to contribute more
- Companies showing consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution requires calculation from an actuary determined by your earnings, age, and retirement objectives. Limits on contributions change annually.
The Importance of a Financial Advisor in Scottsdale, AZ for Your Self-Employed Retirement Plan
A financial advisor in Scottsdale, AZ experienced with retirement plans for the self-employed can be an essential partner for self-employed individuals. They have the expertise to help understand the intricacies of saving for retirement and design a customized plan that reflects your aspirations. Your advisor in Scottsdale, AZ will assess where you stand financially, identify your risk preferences, and help you in making informed decisions about saving and investing for retirement. A key part of what we do for you features:
- Help you choose a plan that suits your unique requirements
- Tailor the plan to your needs even further
- Adopt a written plan in accordance with IRS guidelines
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Track and fine-tune your plan as needed
- Offer continued financial education and guidance throughout your retirement planning process
- Maximize what you receive in retirement by making the most of your social security
Self-Employed Retirement Plans in Scottsdale, AZ: Correct Capital's Process
Entrepreneurs in Scottsdale, AZ who aren’t equipped with the time or understanding to manage their retirement savings strategy independently often feel overwhelmed when faced with their options. Through our team at Correct Capital, our Scottsdale, AZ financial advisors take on the majority of your retirement strategy for you, to help make meeting your retirement goals as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in four simple steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can determine if we're a good fit for you and your business. This short conversation lets us understand what you're looking for with no obligation or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including your employee count, your current financial situation, and your future objectives. This allows us to put together a tailored approach designed just for you.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll meet with you and go over your plan in detail to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can start saving. Over the course of our partnership, we'll check in and review your strategy to make sure it remains aligned with your goals.
Our Scottsdale, AZ financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Scottsdale, AZ 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 Scottsdale, AZ
You don't see your business as "just a business", and your Scottsdale, AZ financial advisors must deliver more than simply sound financial advice. With Correct Capital, we make it a priority to understand our clients and their businesses to deliver personalized self-employed retirement plans. All our clients in Scottsdale, AZ benefit from our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To begin on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
