Self-employed retirement plans Shreveport, LA. The flexibility of owning your own business in Shreveport, LA is one of the greatest advantages of having a self-directed career. That said, this freedom can come with potential drawbacks, particularly regarding planning for retirement, as you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from looking into other possibilities. In addition to enjoying a more secure retirement, partnering with a financial advisor in Shreveport, LA to establish your self-employed retirement plan offers significant tax advantages that enable your business to grow and succeed.
Few Shreveport, LA financial advisory and retirement planning firms are as attuned to the requirements of entrepreneurs better than Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and Correct Capital take pride in helping businesses with their retirement planning needs. We recognize that your professional and personal aspirations extend well past simple financial figures, and we strive to offer tailored solutions that reflect your objectives. Read on to discover about your self-employed retirement plan options in Shreveport, LA, or call Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Shreveport, LA today.
Why Shreveport, LA 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 immediate benefits today. With customizable contribution options to significant tax savings, consulting a financial advisor in Shreveport, LA allows you to create your retirement plan to align with your specific needs.
Flexibility That Fits Your Income
When your earnings vary from year to year, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to adjust how much you save:
- Customizable Contributions: Save extra during high-income years and reduce savings when revenues are down, so your plan works with your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, allowing you to withdraw without tax penalties in the future—an advantageous choice if you expect your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans deliver significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, helping you keep more of your earnings.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, providing your money more time to accumulate.
- State-Specific Incentives: Based on your location, you might access additional deductions as a sole proprietor. These state-level incentives help make these plans even more beneficial.
- 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 requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Allocating your investments across varied stocks, bonds, and alternatives is a smart way to minimize exposure to risk while helping to grow your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net prevents you from using your retirement funds during challenging periods and incurring penalties.
Plan for the Future of Your Shreveport, LA Business
A thoughtful retirement strategy can assist you plan ahead for what’s next with your Shreveport, LA business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and are not part of the sale. These savings can provide the reliable income you’ll need later on. 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 up to $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you are required to pay when you sell your business.
- Succession Planning: If you’re passing the business on, your nest egg offer the funds you need as you make this shift. You can also seek advice from a financial advisor with expertise in succession and retirement planning to help with taxes on the sale.
With the proper savings strategy, you can take control of your financial future, reduce your tax burden, and create a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Shreveport, LA Now?
Time is one of the most important factors for building your retirement fund. Beginning sooner rather than later not only allows you to build a larger nest egg but also minimizes the financial burden of playing catch-up as you get older. This is why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement could lead to a substantial impact on the savings you’ll have when you stop working. The main reason is compound interest—the powerful process where your investments earn returns, and those returns, subsequently, earn even more returns. The more time your money has to grow, the more significant the effect of this compounding process.
Example: Taylor and Alex are both self-employed individuals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor delays savings until age 40 but puts away $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time often create 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 expected yearly growth rate of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month would result in 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 achieve your retirement goals.
*These calculations are estimates derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. The scenarios provided are for illustrative purposes only and cannot predict actual future outcomes. Actual results may vary based on variables including market conditions, fees, and personal factors. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Shreveport, LA, it can be tempting to prioritize reinvesting in your business over saving for retirement. That said, initiating a plan now enables you to:
- Leverage growth that is tax-deferred or penalty-free withdrawals down the road.
- Benefit from contribution flexibility that align with your income.
- Create a financial cushion that provides security, no matter how your business develops.
Getting started now, the less you’ll have 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 allowing yourself the ability to turn your attention to your objectives—both for your future retirement and your Shreveport, LA business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for those working for themselves in Shreveport, LA, each with its own pros and cons. A financial advisor is available to help you learn about the advantages and disadvantages of each option and determine the one ideal for your circumstances. In most cases, your self-employed retirement plan options in Shreveport, LA are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that include key tax perks. In a conventional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but retirement distributions are taxed as income. In contrast, with Roth IRAs, you contribute using income already taxed, but eligible distributions during retirement, including earnings, are exempt from taxes. In both accounts, withdrawals are penalty-free if you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, IRAs, including traditional and Roth options are available to anyone with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA is a retirement plan that enables self-employed individuals to save a percentage of their net business profits. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role above the 25% you (the employer) allocate. If you have employees, it's required to contribute the same amount for them as you do for yourself. You may choose to contribute a fixed dollar figure or a percentage of wages to employee accounts. This type of plan may be ideal for entrepreneurs facing fluctuating revenue streams. Compared to other retirement options, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs operate like conventional IRAs, where you contribute pre-tax dollars 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
For self-employed individuals, the allowable contribution 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 retirement savings plan designed for businesses with no employees or when the sole employee is your spouse. These plans function similarly to traditional employer-managed 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 extra savings options may be offset by 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: Solo 401(k)s are available solely to business owners and their spouses can set up 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, 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 for those who turn 60-63 in 2025.
- Contributions as an employer (as an employer) must not surpass 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (in 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan represents a type of retirement plan that guarantees a fixed, predetermined benefit to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but lets individuals clearly understand what they'll have in retirement. This strategy is best suited for higher-income self-employed individuals who are focused on saving a substantial amount for retirement and can commit to making substantial contributions. Contributions are tax deferred, and withdrawals are taxable as income in 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 most commonly suggested for those over 50 who make $250,000 or more annually. 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+)
- Businesses currently investing 3-4% and are willing to do more
- Companies with proven consistent profit patterns
- Entrepreneurs over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The contribution limit requires calculation from an actuary using your income, age, and retirement goals. Allowable contributions are adjusted each year.
The Importance of a Financial Advisor in Shreveport, LA for Your Self-Employed Retirement Plan
A financial advisor in Shreveport, LA experienced with retirement plans for the self-employed can be an invaluable resource for those working for themselves. They have the expertise to help navigate the complexities of retirement planning and design a tailored strategy that matches your objectives. A financial advisor in Shreveport, LA will evaluate your financial situation, determine how much risk you’re comfortable with, and help you in selecting the best options about saving and investing for retirement. Included in what we do for you includes:
- Help you choose a plan that best fits your needs and goals
- Further adapt the plan to your needs 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
- Track and fine-tune your plan when necessary
- Offer continued financial education and guidance throughout your retirement planning process
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Shreveport, LA: Correct Capital's Process
Self-employed individuals in Shreveport, LA who aren’t equipped with the time or understanding to oversee their self-employed retirement plan independently may end up overwhelmed when faced with their choices. At Correct Capital, our Shreveport, LA financial advisors handle the majority of your savings plan setup for you, to help make meeting your future savings targets as easy as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team will assess if our services align for you and your business. This brief introduction allows us to learn about your needs with no obligation or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll request information, including whether you have employees, your existing financial picture, and your future objectives. This enables us to craft a personalized strategy that aligns with your goals.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll meet with you and go over your plan step by step 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 put everything in place so you can initiate your savings journey. Over the course of our partnership, we'll check in and track your progress to ensure it stays suited to your needs.
Our Shreveport, LA financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Shreveport, LA 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 Shreveport, LA
To you, your business is more than "just a business", and your Shreveport, LA financial advisors must deliver more than basic financial recommendations. At Correct Capital, we make it a priority to understand our clients and their businesses to create customized self-employed retirement plans. All our clients in Shreveport, LA benefit from our I.O.U. promise: all guidance we provide 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.
