Self-employed retirement plans Shreveport, LA. The flexibility of running your own company in Shreveport, LA is one of the greatest advantages of being self-employed. However, this flexibility sometimes brings with a lack of security, especially in terms of building your retirement fund, as you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless should consider looking into other possibilities. In addition to enjoying a financially stable retirement, seeking advice from a financial advisor in Shreveport, LA to set up your self-employed retirement plan can provide significant tax advantages that allow your business to grow and succeed.
Few Shreveport, LA financial advisory and retirement planning firms truly grasp the challenges faced by self-employed individuals quite like Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (learn more about our story here), and Correct Capital are deeply experienced in helping businesses with their retirement planning needs. We understand that your professional and personal aspirations extend well past basic numbers, and we are dedicated to create personalized solutions to meet your unique goals. 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 speak with a entrepreneurial financial advisor in Shreveport, LA today.
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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 tangible benefits today. From flexible contributions to substantial tax savings, partnering with a financial advisor in Shreveport, LA allows you to design your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
If your income changes from year to year, a plan like a SEP IRA or Solo 401(k) provides the flexibility to tailor how much you save:
- Customizable Contributions: Contribute more during successful years and reduce savings when your earnings dip, so your plan aligns with your current income.
- Roth Options: A Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw tax-free later—a smart decision if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, so you can keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, providing your money more time to compound.
- State-Specific Incentives: Depending on where you live, you may be eligible for state-specific credits as a self-employed individual. These state-level incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can apply for a credit of up to 50% of the first $2,000 put into a retirement plan, helping to lower 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 determined by your investment strategy:
- Diversified Portfolios: Distributing your investments across different stocks, bonds, and other assets is a smart way to mitigate financial risk while helping to grow your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net helps you avoid dipping into savings during challenging periods and facing tax penalties.
Plan for the Future of Your Shreveport, LA Business
Preparing for retirement can assist you think through 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 remain your personal assets and are not part of the sale. These savings ensure the reliable income you’ll need in the future. Remember that while selling your business results in a capital gain, deposits into these plans are capped at annual limits (e.g., as much as $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings helps lower the taxes you are required to pay when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts provide a stable foundation during the change. You might want to work with a financial advisor with expertise in succession and retirement planning to minimize tax burdens on the sale.
With the right retirement plan, you can take control of your financial future, cut down your tax obligations, and establish a secure foundation 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 crucial 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 catching up later in life. This is why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund may cause a major impact on the amount 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, generate even more returns. The longer your money has to grow, the more significant the impact of compounding.
Example: Alex and Taylor are both self-employed professionals. Both of them want to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor waits until age 40 but puts away $7,500 annually to catch up.
By age 65, using a projected 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Even modest contributions invested steadily can lead to substantial growth. Take a look at this scenario showing the effect of consistent growth:
- Starting at age 25: If you invest $200 per month in a retirement plan with an projected return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month leaves you with only $235,412.97* by age 65—a difference of over $260,000, just from a 10-year delay.
Starting sooner, the less you need to save each year to reach your retirement goals.
*These calculations represent estimates derived from NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are intended as illustrative examples and cannot predict actual future outcomes. Actual results may vary depending on factors such as market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Shreveport, LA, it can be tempting to put more emphasis on reinvesting in your business over saving for retirement. That said, starting a plan now allows you to:
- Leverage tax-deferred growth or tax-free withdrawals later on.
- Take advantage of adjustable savings that adapt to your income.
- Establish a financial cushion that offers peace of mind, no matter how your business evolves.
Starting early, the less you’ll have to worry about making up for lost time later in life. Building your retirement savings today means managing your financial future and giving yourself the ability to focus on your dreams—both for your future retirement and your Shreveport, LA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for those working for themselves in Shreveport, LA, each with its own benefits and trade-offs. A financial advisor will guide you to understand the pros and cons of each plan and choose the one best suited for your needs. Generally speaking, your self-employed retirement plan options in Shreveport, LA include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that provide distinct tax benefits. In a traditional IRA, you can usually deduct your contributions from taxable income, and returns grow free of current taxes, but withdrawals in retirement are taxed as income. In contrast, with Roth IRAs, you contribute are made with after-tax income, but eligible distributions during retirement, including earnings, are not taxed. In both cases, withdrawals come without penalties as long as you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, IRAs, including traditional and Roth options 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 is a retirement plan that allows those who are self-employed to contribute a percentage of their net earnings. 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 beyond 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 have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA is a good option for businesses that experience fluctuating revenue streams. Unlike other plans, SEP IRAs are free of expensive setup or ongoing fees.
SEPs work like standard IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
Eligibility: Employers of any type, including self-employed individuals can open 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 allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan meant for businesses with no employees or where the only employee is a spouse. Solo 401(k)s are similar to standard 401(k) plans, and allow you to contribute as both an employee or an employer with pre-tax money. This allows for more savings than SEPs or IRAs; however, the extra savings options can be balanced by more limited investment options. 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 can set up and contribute to a solo 401(k).
Contribution Limits: If you are self-employed with a solo 401(k) plan, you are allowed to make two types of contributions:
- Deferrals as an employee of up to 100% of your earned income from self-employment, subject 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 individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) cannot exceed 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the elective deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan represents a type of retirement plan that guarantees a pre-established payout to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, this plan is not influenced by market performance, but allows self-employed individuals to know what they'll receive in retirement. This strategy is recommended for high-earning entrepreneurs who want to save a substantial amount for retirement and can commit to making sizeable contributions. Contributions are tax deferred, and withdrawals incur taxes as income in retirement.
Eligibility: Entrepreneurs managing a one-person company or employing fewer than five people may establish an individual defined benefit plan, but it's most commonly recommended for individuals aged 50+ who make $250,000 or more annually. Generally, good candidates for defined benefit plans are:
- Entrepreneurs who aim to deposit more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% but are open to increasing contributions
- Companies that have demonstrated consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or accelerate the retirement savings
Contribution Limits: The cap on contributions must be determined by an actuary determined by your earnings, age, and retirement objectives. Contribution limits change annually.
The Importance of a Financial Advisor in Shreveport, LA for Your Self-Employed Retirement Plan
A financial advisor in Shreveport, LA specialized in self-employed retirement plans can be an invaluable resource for those working for themselves. They offer the knowledge to assist understand the intricacies of saving for retirement and craft a tailored strategy that reflects your aspirations. A financial advisor in Shreveport, LA will review your finances, understand your risk tolerance, and help you in making informed decisions about saving and investing for retirement. A key part of what we do for you includes:
- Assist in selecting a plan that suits your unique requirements
- Further adapt the plan to your needs even further
- Formalize a plan in writing as required by IRS rules
- Set up an asset trust plan
- Help you understand the plan's terms
- Review and modify your plan as needed
- Offer continued financial education and guidance throughout your retirement planning process
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Shreveport, LA: Correct Capital's Process
Shreveport, LA business owners who lack the time, interest, or knowledge to oversee their retirement savings strategy on their own often feel overwhelmed by their options. At Correct Capital, our Shreveport, LA financial advisors handle the lion's share of your retirement strategy for you, to help make meeting your financial objectives as hassle-free as possible for you. We are here to assist you in setting up your self-employed retirement plan in a quick, four-step process:
- 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 zero commitment or extensive time commitment on your part.
- Gather Information: Should we agree to proceed, we'll request information, including how many employees you have (if any), your current financial situation, and your retirement goals. This allows us to put together a personalized strategy that aligns with your goals.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll schedule a meeting and go over your plan thoroughly to ensure you understand 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 ensure it stays suited to your needs.
Our Shreveport, LA financial advisors and retirement plan consultants are fiduciary advisors, which means they are required by law and ethical standards to act in your best interest.
Other financial advisory services we offer in Shreveport, LA 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 Shreveport, LA
You don't see your business as "just a business", and your Shreveport, LA financial advisors must deliver more than basic financial recommendations. With Correct Capital, we focus on building a relationship with our clients and their businesses to create customized self-employed retirement plans. To every client in Shreveport, LA, we provide 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.
