Self-employed retirement plans St. Louis, MO. The independence of owning your own business in St. Louis, MO is one of the greatest advantages of being self-employed. That said, this independence sometimes brings with certain challenges, particularly when it comes to planning for retirement, since you don't have access to a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from exploring their options. In addition to enjoying a more comfortable retirement, working with a financial advisor in St. Louis, MO to set up your self-employed retirement plan delivers significant tax advantages that enable you to move your business forward.
Few St. Louis, MO investment consulting and retirement planning firms understand the needs of entrepreneurs quite like Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and Correct Capital have a rich history of helping businesses with their retirement planning needs. We recognize that your goals for your business and retirement extend well past just monetary concerns, and we strive to offer personalized solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in St. Louis, MO, or call Correct Capital at 877-930-401k or contact us online to talk to a entrepreneurial financial advisor in St. Louis, MO today.
Why St. Louis, MO Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also provide real benefits today. Offering flexibility in contributions to significant tax savings, consulting a financial advisor in St. Louis, MO enables you to customize your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) offers the flexibility to modify how much you save:
- Customizable Contributions: Contribute more during profitable years and cut back when revenues are down, so your plan aligns with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw your savings tax-free down the road—an advantageous choice if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals provide powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA lower your taxable income, allowing you to keep more of your hard-earned money.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for extra credits as a self-employed individual. These local incentives help make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a 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
Planning for a safe retirement requires more than how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Allocating your investments across varied stocks, bonds, and alternatives serves to minimize exposure to risk while helping to grow your savings.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net ensures you don’t tapping into your nest egg during tough times and incurring penalties.
Plan for the Future of Your St. Louis, MO Business
Preparing for retirement can assist you plan ahead for what’s next with your St. Louis, MO business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain yours and won’t be included in the sale. These accounts can provide the reliable income you’ll need in the future. It’s important to note that while the sale of a business usually creates a capital gain, deposits into these plans are restricted by contribution limits (e.g., up to $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: Using retirement contributions wisely can reduce the taxes you might face when you sell your business.
- Succession Planning: If you’re passing the business on, your retirement accounts offer a stable foundation as you make this shift. You can also partner with a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens associated with the transaction.
With the right retirement plan, you can take control of your financial future, cut down your tax obligations, and build a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in St. Louis, MO Now?
There’s no denying that time is one of the most important resources when it comes to saving for retirement. Getting a head start not only helps you grow a more substantial retirement fund but also reduces the pressure of playing catch-up as you get older. Here’s why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement can have 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, then, generate even more returns. The greater time span your money has to grow, the greater the impact of this compounding process.
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 postpones starting contributions to age 40 but contributes $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and achieves a total of $691,184.39*.
- Taylor contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Even modest contributions invested steadily may result in 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 projected return of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month would result in only $235,412.97* by age 65—a gap of over $260,000, simply due to a 10-year delay.
Starting sooner, the lower your annual savings needs each year to achieve your retirement goals.
*The figures provided in this example represent estimates calculated using NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. The scenarios provided are intended as illustrative examples and cannot predict actual future outcomes. Outcomes may change based on factors such as 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
If you’re self-employed in St. Louis, MO, it can be tempting to focus more on reinvesting in your business over saving for retirement. However, initiating a plan now enables you to:
- Take advantage of growth that is tax-deferred or penalty-free withdrawals down the road.
- Enjoy contribution flexibility that change with your cash flow.
- Build a long-term safety measure that ensures stability, no matter how your business changes.
The sooner you start, the less you’ll need to worry about playing catch-up later in life. Saving for retirement now means taking control of your financial future and creating for yourself the ability to concentrate on your dreams—both for your golden years and your St. Louis, MO business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options open for those working for themselves in St. Louis, MO, each offering its own benefits and trade-offs. A financial advisor will guide you to understand the pros and cons of each plan and determine the one most suitable for your unique situation. In most cases, your self-employed retirement plan options in St. Louis, MO are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that include distinct tax benefits. In a conventional IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but retirement distributions are subject to income tax. In contrast, with Roth IRAs, you contribute using income already taxed, but retirement withdrawals that qualify, including earnings, are not taxed. In both cases, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, IRAs, including traditional and Roth options are open to those with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 if you're 50 or older.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs serves as a retirement savings option that enables entrepreneurs 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) cannot make additional contributions more than 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 may choose to contribute a flat-dollar amount or a percentage of wages to employee accounts. This type of plan may be ideal for companies with periods of inconsistent earnings. In contrast to some alternatives, SEP IRAs lack expensive setup or ongoing fees.
SEPs function like traditional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Both employers and self-employed individuals 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 contribution you can make 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 designed for businesses without employees or when the sole employee is your spouse. Solo 401(k)s function similarly to standard 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the extra savings options can be balanced by more restricted investment choices. 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: Solo 401(k)s are available solely to business owners and their spouses may establish 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:
- Employee contributions of up to 100% of your earned income from self-employment, subject to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) are limited to 25% of your adjusted self-employment income, 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 individuals aged 50+ (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that delivers a pre-established payout to entrepreneurs upon retirement. As opposed to defined contribution plans, a defined benefit plan doesn't fluctuate based on investment returns, but allows self-employed individuals to know the precise amount they'll receive in retirement. This strategy is best suited for high-earning professionals who want to save a significant sum for retirement and are prepared to contribute substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income in retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees may establish an individual defined benefit plan, but it's generally suggested for people above age 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 for individuals 50 and older)
- Companies already contributing 3-4% with plans to contribute more
- Companies showing consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The cap on contributions must be determined by an actuary using your financial situation, age, and savings targets. Allowable contributions change annually.
The Importance of a Financial Advisor in St. Louis, MO for Your Self-Employed Retirement Plan
A financial advisor in St. Louis, MO specialized in self-employed retirement plans can be an important asset for those working for themselves. They bring the skills needed to understand the intricacies of saving for retirement and develop a personalized approach that reflects your aspirations. Your advisor in St. Louis, MO will review your finances, understand your risk tolerance, and guide you in choosing wisely about saving and investing for retirement. A key part of what we do for you features:
- Help you choose a plan that aligns with your objectives and circumstances
- Customize the plan to your specific situation even further
- Adopt a written plan as required by IRS rules
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Monitor and adjust your plan as needed
- Deliver continuous support and financial insights to help you navigate your retirement journey
- Boost your retirement earnings by optimizing your social security benefits
Self-Employed Retirement Plans in St. Louis, MO: Correct Capital's Process
St. Louis, MO business owners who lack the time, interest, or knowledge to handle their own retirement planning on their own can become overwhelmed by their choices. Through our team at Correct Capital, our St. Louis, MO financial advisors take on the majority of your retirement planning for you, to help make meeting your future savings targets as hassle-free as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: In just 20 minutes, a member of our advisor team will assess if our services align for you and your business. This initial call helps us get a sense of your goals with no pressure 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 present financial standing, and your future objectives. This enables us to craft a personalized strategy that aligns with your goals.
- Review Your Plan: When we finalize a plan based on the information you provide, we'll schedule a meeting and go over your plan thoroughly to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can start saving. Over the course of our partnership, we'll meet with you and track your progress to ensure it stays suited to your needs.
Our St. Louis, MO financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in St. Louis, MO 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 St. Louis, MO
Your business isn't "just a business" to you, and your St. Louis, MO financial advisors must deliver more than simply sound financial advice. Correct Capital takes pride in, we focus on building a relationship with our clients and their businesses to provide tailored self-employed retirement plans. To every client in St. Louis, MO, we provide our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To get started on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
