Self-Employed Retirement Plans St. Charles County, MO

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Self-employed retirement plans in St. Charles County, MO. The freedom of running your own business in St. Charles County, MO is a wonderful advantage to working for yourself. But more leeway can come with uncertainty, especially in terms of building a retirement plan, employer-sponsored plans aren't an option. Barely more than 10% of self-employed people have a workplace retirement plan, but many would be better off exploring their options. In addition to a more comfortable retirement, partnering with a financial advisor to set up your self-employed retirement plan in St. Charles County, MO offers favorable tax incentives that can help boost you and your business towards success.

Few financial advisory and retirement planning firms will understand the needs of the self-employed and small business owners than Correct Capital. Our founder's father was a small business owner himself (you can learn more about our story here). We have a deep understanding that your business and retirement goals go beyond spreadsheets and percentages, and we are devoted to offering tailored plans that fit where you are and where you want to go. Continue reading to read more about your self-employed retirement plan options in St. Charles County, MO, or call Correct Capital at 877-930-4015 or contact us online to speak to a member of our advisory team at your convenience.


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What Self-Employed Retirement Plans Are There?

There are several retirement savings plans available for self-employed individuals, each with its own set of benefits and considerations. A St. Charles County, MO financial advisor can help you grasp the pros and cons of each option and select that helps both your short- and long-term goals. Typically, your self-employed retirement plan options in St. Charles County, MO include:


Traditional or Roth IRA

Plan Overview: IRAs, or Individual Retirement Arrangements, are investment accounts that offer specific tax advantages. In a traditional IRA, contributions are deducted from your taxable income, and investment earnings grow tax-deferred, but distributions in retirement are taxed as if it were income. On the other hand, Roth IRA contributions are made with money you've already paid taxes on, but you pay no taxes on withdrawals or earnings. In both a traditional an a Roth IRA, distributions are penalty-free as long as you are at least 59Ā½.

Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, traditional and Roth IRAs can be set up by anyone with an earned income.

Contribution Limits: For 2023, annual contribution limits for IRAs are $6,500, or $7,500 if you're 50 or older.

Simplified Employee Pension Plan (SEP IRA)

Plan Overview: A Simplified Employee Pension (SEP) IRA is a retirement plan that allows self-employed individuals to contribute a portion of of their net earnings from self-employment. Given that you are self-employed, your ability to contribute is restricted to the 25% already contributed by you in your position as the employer. If you have employees, they must receive the same amount you do. You may choose to contribute a flat-dollar amount or a percentage of wages to employee accounts. SEP IRAs may be a good self-employed retirement plan if your business goes through periods of variable income. SEP IRAs don't have the high upfront costs or administrative expenses often associated with other retirement plans.

SEPs work like traditional IRAs, where contributions are made with pre-tax money and distributions are taxed at your income at the time of withdrawal.

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
  • $66,000

For the self-employed individual, the maximum amount you can contribute in a given year is decided by a unique calculation.

Solo 401(k)

Plan Overview: A Solo 401(k) plan, also known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan for businesses with no employees or whose only employee is a spouse. Solo 401(k)s work similarly to employer-sponsored 401(k) plans, and you can add funds as both an employer or employee with pre-tax money. This offers more savings than some other retirement savings plans, however the additional opportunities for saving are often counteracted by having less investment options available. In an individual 401(k) plan, you can make either traditional deferrals (with pre-tax money) or Roth deferrals (with after-tax money).

Eligibility: Only business owners and their spouses have access to solo 401(k)s.

Contribution Limits: As a self-employed individual with a solo 401(k) plan, you can make two types of contributions:

  1. Elective deferrals (as an employee) of 100% of your earned income from self-employment, up to the annual contribution limit. In 2023, those limits are $22,500, or $30,000 if you are 50 or older.
  2. Employer profit-sharing contributions (as an employer) of a maximum of 25% of your net self-employment income, which is your net profit minus half of your self-employment tax and the elective deferrals you made.

The total contribution cannot exceed $66,000, or $73,500 if you're over age 50 (in 2023).

Individual Defined Benefit Plan

Plan Overview: A defined benefit plan is a retirement plan that offers a a predetermined benefit to self-employed individuals once they've retired. As opposed to other types of retirement plans, a defined benefit plan doesn't go up and down because of investment returns, but allows self-employed individuals to know exactly how much they'll get in retirement. This plan is best suited for high-earning self-employed individuals who want to save a a significant sum for retirement and want to add substantial contributions. Contributions are tax deferred and contributions are taxed as income in retirement.

Eligibility: Any self-employed individual who runs a business where they're the only owner or has less than five employees can open an individual defined benefit plan, but it's typically only recommended for those over 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans are:

  • Partners or owners who want to contribute more than $66,000 (or $73,500 over age 50)
  • Companies already contributing 3-4% who are willing to contribute more
  • Companies who have demonstrated consistent profit patterns
  • Partners or owners over age 40 who desire to make up for earlier years when they didn't save as much

Contribution Limits: The contribution limit must be decided by an actuary based on your income, age, and retirement goals. Contribution limits change every year.

The Importance of a Financial Advisor for Your Self-Employed Retirement Plan in St. Charles County, MO

A financial advisor in St. Charles County, MO specialized in self-employed retirement plans can be a crucial partner for self-employed individuals. They have the knowledge to help you navigate the complexities of retirement planning and design a customized plan that aligns with your goals. A financial planner will assess your financial situation, adjust for your risk tolerance, and help you make smart decisions about your financial future. Part of what we do for you includes:

  • Help you pick a plan that best fits your needs and goals
  • Personalize the plan to your needs even further
  • Adopt a written plan in accordance with IRS guidelines
  • Arrange a trust plan for assets
  • Create a record keeping system
  • Help you understand the plan's terms
  • Monitor and adjust your plan as needed
  • Offer continued financial education and guidance as long as you work with us
  • Increase your retirement income by maximizing your social security benefits

Self-Employed Retirement Plans in St. Charles County, MO: Correct Capital's Process

St. Charles County, MO business owners who don't want to invest the time, interest, and skill set to manage their own self-employed retirement plan can become burdened when looking at their options. At Correct Capital, our financial advisors handle the lion's share of your retirement planning on your behalf, and attempt to make meeting your business and retirement aspirations as simple as possible for you. We can help you establish and maintain your self-employed retirement plan in four simple steps:

  1. Schedule a Call — It only takes a brief 20-minute call for a member of our advisor team to understand if we're a good fit for you and your business. This brief introduction lets us get a feel for what you're looking for with no obligation on your part.
  2. Gather Information — If we both decide to move forward, we'll request more info, including how many employees you have (if any), your current financial situation, and your retirement goals. This allows us to put together a custom plan suited specifically for your needs.
  3. Review Your Plan — Once we've compiled your plan, we'll meet with you and go over your plan in detail to ensure you're comfortable with it.
  4. Implementation and Monitoring — Once we've started to move forward, we'll put everything in place so you can start saving. Throughout our relationship, we'll meet with you and monitor your plan so it stays consistent with your needs.

Our financial advisors and retirement consultants are fiduciary advisors who have a legal and ethical obligation to do what's best for you and only you. We pride ourselves in providing straightforward communication and excellent service to help you attain your self-employed retirement goals.

Other services we offer in St. Charles County, MO include:

Self-Employed Retirement Plans St. Charles County, MO | Financial Advisors | Retirement Consultants Near St. Charles County

Call Correct Capital for Your St. Charles County, MO Self-Employed Retirement Plan

Your business isn't "just a business" to you, and your St. Charles County, MO financial advisors need to provide you with more than just wise financial advice. Correct Capital takes pride in getting to know our clients and their business to deliver customized self-employed retirement plans. We give all our St. Charles County, MO clients the same I.O.U. promise: all of the advice we give you will be independent, objective, and unbiased. To get started on your self-employment retirement plan in St. Charles County, MO, call Correct Capital today at 877-930-4015 or contact us through our website.


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