Self-employed retirement plans Spokane, WA. The independence of owning your own business in Spokane, WA is one of the greatest advantages of having a self-directed career. However, this freedom sometimes brings with a lack of security, particularly when it comes to planning for retirement, because you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off exploring their options. In addition to achieving a more secure retirement, working with a financial advisor in Spokane, WA to create your self-employed retirement plan offers significant tax advantages that help you to move your business forward.
Few Spokane, WA financial advisory and retirement planning firms are as attuned to the requirements of small business owners better than Correct Capital. The father of our founder was a small business owner himself (check out our story here), and we have a rich history of helping businesses with their retirement planning needs. We understand that your goals for your business and retirement extend well past basic numbers, and we work tirelessly to create customized solutions to meet your unique goals. Continue exploring to find out about your self-employed retirement plan options in Spokane, WA, or reach out to Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Spokane, WA today.
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Why Spokane, WA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver real benefits today. From flexible contributions to considerable tax savings, working with a financial advisor in Spokane, WA enables you to customize your retirement plan to fit your specific needs.
Flexibility That Fits Your Income
For those with fluctuating income over time, a plan like a SEP IRA or Solo 401(k) provides the option to adjust how much you save:
- Customizable Contributions: Save extra during successful years and scale back when revenues are down, so that your plan aligns with your financial situation.
- 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 expect your tax rate will increase 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 reduce what you owe in taxes, helping you keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to compound.
- State-Specific Incentives: In some states, you could qualify for additional deductions as a business owner. These state-level incentives can 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 put into a retirement plan, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Planning for a safe retirement isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Allocating your investments across varied asset classes like stocks and bonds is a smart way to minimize exposure to risk while helping to grow your savings.
- Emergency Back-Up: Supplementing your retirement savings with a dedicated business safety net ensures you don’t dipping into savings during challenging periods and risking extra costs.
Plan for the Future of Your Spokane, WA Business
Retirement planning enables you to think through what’s next with your Spokane, WA business:
- Selling Your Business: If you’re planning to sell, plans like SEP IRAs or Solo 401(k)s remain yours and are not part of the sale. These savings offer the steady income you’ll need in the future. Keep in mind that while the sale of a business usually creates a capital gain, contributions to retirement accounts are restricted by contribution 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 might face when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement savings ensure the funds you need during the change. You may also partner with a financial advisor with expertise in succession and retirement planning to reduce taxes during the sale.
With the best-fit retirement strategy, you can take control of your financial future, reduce your tax burden, and build a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Spokane, WA Now?
There’s no denying that time is one of the most important resources for building your retirement fund. Starting early not only helps you grow a more substantial retirement fund but also reduces the pressure of catching up later in life. The following are reasons why it is beneficial to start now:
The Cost of Waiting
Delaying your retirement savings can have a major impact on the savings you’ll have when you stop working. The biggest reason is compound interest—the financial principle where your investments earn returns, and those returns, then, generate even more returns. The more time your money has to grow, the more significant the effect of this compounding process.
Example: Two individuals, Alex and Taylor are both entrepreneurs. Their shared goal is to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor postpones starting contributions to age 40 but contributes $7,500 annually to make up for lost time.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor invests $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions made consistently can lead to impressive growth. Here’s a simple 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 accumulate $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 gap of over $260,000, all because of a 10-year delay.
The earlier you begin, the lower your annual savings needs each year to meet your retirement goals.
*The figures provided in this example are estimates generated with NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are intended as illustrative examples and do not guarantee future performance. Actual results may vary based on variables including market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
As a self-employed person in Spokane, WA, it can be tempting to prioritize reinvesting in your business instead of saving for retirement. Even so, starting a plan now allows you to:
- Leverage growth that is tax-deferred or tax-free withdrawals down the road.
- Enjoy flexible contributions that align with your cash flow.
- Build a long-term safety measure that provides security, no matter how your business develops.
The sooner you start, the less you’ll have to worry about catching up later in life. Building your retirement savings today means managing your financial future and giving yourself the freedom to focus on your dreams—both for your golden years and your Spokane, WA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for those working for themselves in Spokane, WA, each offering its own benefits and trade-offs. A financial advisor can help you learn about the advantages and disadvantages of each option and determine the one best suited for your needs. Generally speaking, your self-employed retirement plan options in Spokane, WA 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, you can usually deduct your contributions from taxable income, and returns grow free of current taxes, but retirement distributions are taxed as income. In contrast, Roth IRAs require contributions using income already taxed, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both cases, withdrawals are penalty-free if 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 accessible for individuals with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA offers a way to save for retirement that enables those who are self-employed to save a percentage of their net business profits. Contributions must come from an employer, so, as a sole proprietor, you (the employee) are limited to contributions from the employer role 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 have the flexibility to contribute a fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA is a good option for companies with fluctuating revenue streams. Unlike other plans, SEP IRAs lack costly startup or administrative fees.
SEPs operate like conventional IRAs, where contributions are made with pre-tax money and withdrawals are taxed as income.
Eligibility: Employers of any type, including 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 contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, also called an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan intended for businesses without employees or if the only employee is your spouse. Solo 401(k)s are similar to standard 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the extra savings options may be offset by more limited investment options. With this type of plan, 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 are eligible to open 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-employed earnings, capped at the annual contribution limit. For 2025, the limits will be $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) cannot exceed 25% of your adjusted self-employment income, which is your net profit minus half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 for individuals aged 50+ (as of 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans offers a structured retirement solution that delivers a set amount to business owners upon retirement. In contrast to the plans discussed earlier, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine the precise amount they'll get in retirement. This option is recommended for wealthier professionals who want to save a substantial amount for retirement and are prepared to contribute sizeable contributions. Contributions offer tax-deferred growth, and withdrawals incur taxes as income during retirement.
Eligibility: Entrepreneurs running an owner-only business or employing fewer than five people can open an individual defined benefit plan, but it's most commonly advised for individuals aged 50+ who earn at least $250,000 a year. Generally, good candidates for defined benefit plans tend to be:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Companies already contributing 3-4% with plans to contribute more
- Companies that have demonstrated consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The maximum allowable contribution requires calculation from an actuary based on your financial situation, age, and savings targets. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Spokane, WA for Your Self-Employed Retirement Plan
Partnering with an advisor in Spokane, WA focused on self-employed retirement strategies is an essential partner for entrepreneurs. They offer the knowledge to assist guide you through the challenges of retirement planning and design a personalized approach that aligns with your goals. Your advisor in Spokane, WA will review your finances, identify your risk preferences, and help you in making informed decisions about saving and investing for retirement. Part of what we do for you features:
- Assist in selecting a plan that suits your unique requirements
- Further adapt the plan to fit you personally even further
- Adopt a written plan that complies with IRS regulations
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Monitor and adjust your plan when necessary
- Deliver continuous support and financial insights as you continue on the road to retirement
- Maximize what you receive in retirement by making the most of your social security
Self-Employed Retirement Plans in Spokane, WA: Correct Capital's Process
Entrepreneurs in Spokane, WA who don’t have the time or expertise to manage their self-employed retirement plan on their own may end up overwhelmed by their choices. Through our team at Correct Capital, our Spokane, WA financial advisors handle the majority of your savings plan setup for you, to help make meeting your retirement goals as hassle-free 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: 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 allows us to learn about your needs with no obligation or extensive time commitment on your part.
- Gather Information: Should we agree to proceed, we'll gather information, including how many employees you have (if any), your existing financial picture, and your future objectives. This enables us to craft a custom plan suited specifically for your needs.
- Review Your Plan: Once we've developed a plan based on the information you provide, we'll sit down with you and discuss your plan step by step to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll implement the necessary steps so you can start saving. As time goes on, we'll have regular meetings and track your progress to keep it tailored to your evolving circumstances.
Our Spokane, WA financial advisors and retirement plan consultants serve as fiduciary advisors, meaning they are required by law and ethical standards to prioritize your needs above all else.
Other financial advisory services we offer in Spokane, WA 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 Spokane, WA
To you, your business is more than "just a business", and your Spokane, WA financial advisors need to offer more than just good financial guidance. With 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 Spokane, WA, we provide 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, contact Correct Capital now at 877-930-401k or contact us online.
