Self-employed retirement plans St. Petersburg, FL. The independence of being your own boss in St. Petersburg, FL offers many benefits of having a self-directed career. That said, this flexibility can come with potential drawbacks, notably when it comes to planning for retirement, because you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off exploring their options. In addition to having a financially stable retirement, seeking advice from a financial advisor in St. Petersburg, FL to set up your self-employed retirement plan can provide significant tax advantages that enable you to move your business forward.
Few St. Petersburg, FL investment consulting and retirement planning firms are as attuned to the requirements of entrepreneurs better than Correct Capital. Our founder's father was a small business owner himself (read more of our story here), and Correct Capital have a rich history of assisting business owners in their retirement planning needs. We know that your professional and personal aspirations go far beyond basic numbers, and we are dedicated to offer customized solutions to meet your unique goals. Read on to discover about your self-employed retirement plan options in St. Petersburg, FL, or reach out to Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in St. Petersburg, FL today.
Why St. Petersburg, FL Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also offer tangible benefits today. From flexible contributions to substantial tax savings, consulting a financial advisor in St. Petersburg, FL helps you create your retirement plan to fit your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to adjust how much you save:
- Customizable Contributions: Set aside more during profitable years and scale back when income is lower, so your plan aligns with your current income.
- Roth Options: Choosing a Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw without tax penalties in the future—a smart decision if you expect your tax rate will increase in the future.
Save Money on Taxes
Plans designed for the self-employed provide powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, helping you keep more of your earnings.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, which gives your money more time to compound.
- State-Specific Incentives: Based on your location, you may be eligible for extra credits as a sole proprietor. These state-level incentives make these plans even more advantageous.
- 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, cutting down your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure 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 still growing your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business helps you avoid using your retirement funds during challenging periods and facing tax penalties.
Plan for the Future of Your St. Petersburg, FL Business
Preparing for retirement can assist you plan ahead for what’s next with your St. Petersburg, FL business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and don’t transfer with the business. These plans ensure the financial stability you’ll need in the future. It’s important to note that while selling your business results in a capital gain, retirement plan contributions are restricted by contribution limits (e.g., a maximum of $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, including catch-up contributions, based on plan compensation).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you’ll owe when you pass on your business.
- Succession Planning: For those winding down or handing over their business, your nest egg offer financial security as you make this shift. You may also partner with a financial advisor with expertise in succession and retirement planning to minimize tax burdens associated with the transaction.
With the proper savings strategy, you gain control over your financial future, reduce your tax burden, and create a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in St. Petersburg, FL Now?
Time is one of the most valuable assets 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 stress 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 can have a major impact on the total you’ll have when you reach retirement age. The biggest reason is compound interest—the financial principle where your investments grow, and those returns, in turn, earn even more returns. The longer your money has to grow, the larger the effect of compounding.
Example: Two individuals, Alex and Taylor are both self-employed individuals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but saves $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and ends up with $691,184.39*.
- Taylor invests $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently often create substantial growth. Take a look at this scenario showing the impact of compound interest:
- 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 gap of over $260,000, all because of a 10-year delay.
The earlier you begin, the less you need to save each year to reach your retirement goals.
*The figures provided in this example represent estimates derived from NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are meant to provide general guidance and cannot predict actual future outcomes. Outcomes may change depending on variables including market conditions, fees, and your unique situation. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in St. Petersburg, FL, it is often the case that you prioritize reinvesting in your business instead of saving for retirement. That said, starting a plan now gives you the chance to:
- Take advantage of tax-free future growth or withdrawals without taxes in the future.
- Benefit from contribution flexibility that adapt to your income.
- Establish a safety net that provides security, no matter how your business changes.
Starting early, the less you’ll need to worry about making up for lost time later in life. Saving for retirement now means gaining control over your financial future and giving yourself the freedom to concentrate on your dreams—both for your retirement years and your St. Petersburg, FL business.
Types of Self-Employed Retirement Plans
There are several retirement savings options available for entrepreneurs in St. Petersburg, FL, each with its own advantages and considerations. A financial advisor is available to help you understand the benefits and drawbacks of each choice and choose the one ideal for your needs. In most cases, your self-employed retirement plan options in St. Petersburg, FL include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent long-term savings plans that offer distinct tax benefits. In a standard IRA, the money you contribute is often tax-deductible, and investment earnings grow tax-deferred, but retirement distributions are taxed as income. In contrast, Roth IRA contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, IRAs, including traditional and Roth options are accessible for individuals with an earned 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: SEP IRAs serves as a retirement savings option that allows self-employed individuals to set aside a portion of their self-employment income. Contributions are strictly employer contributions an employer, so, as a independent business owner, you (the employee) would not be able to contribute more than the 25% you (the employer) already contributed. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. You may choose to contribute a set monetary value or a percentage of wages to employee accounts. SEP IRAs works well for entrepreneurs facing fluctuating revenue streams. In contrast to some alternatives, SEP IRAs lack expensive setup or ongoing 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 set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are the lesser of:
- 25% of compensation, or
- $70,000 for 2025
For self-employed individuals, the amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, commonly known as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan intended for companies that have no employees or when the sole employee is your spouse. Solo 401(k)s are similar to employer-sponsored 401(k) plans, and allow you to contribute as both an employer and an employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the extra savings options can be balanced by more constrained investment avenues. Using a solo 401(k), you can make either traditional or Roth deferrals, which offer 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: If you are self-employed with a solo 401(k) plan, you have the ability to make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employment income, capped at 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 those who turn 60-63 in 2025.
- Profit-sharing contributions (as an employer) cannot exceed 25% of your net self-employment income, which is your 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 if you're over age 50 (in 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan is a retirement option that provides a fixed, predetermined benefit to business owners upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but enables participants to determine exactly how much they'll have in retirement. This option is ideal for higher-income professionals who want to save a significant sum for retirement and can commit to making substantial contributions. Contributions offer tax-deferred growth, and withdrawals are taxable as income in retirement.
Eligibility: Any self-employed individual operating a solo business or with less than five employees are eligible to open an individual defined benefit plan, but it's most commonly suggested for individuals aged 50+ who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans include:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 if over age 50)
- Organizations that already put in 3-4% with plans to contribute more
- Businesses showing consistent profit patterns
- Entrepreneurs over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The cap on contributions must be determined by an actuary based on your earnings, age, and retirement objectives. Contribution limits change annually.
The Importance of a Financial Advisor in St. Petersburg, FL for Your Self-Employed Retirement Plan
Partnering with an advisor in St. Petersburg, FL focused on self-employed retirement strategies serves as an essential partner for those working for themselves. They offer the knowledge to assist navigate the complexities of retirement planning and craft a customized plan that reflects your aspirations. A financial advisor in St. Petersburg, FL will review your finances, determine how much risk you’re comfortable with, and guide you in making informed decisions about saving and investing for retirement. Included in what we do for you involves:
- Help you choose a plan that best fits your needs and goals
- Further adapt the plan to fit you personally even further
- Formalize a plan in writing in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Track and fine-tune your plan as needed
- Deliver continuous support and financial insights throughout your retirement planning process
- Boost your retirement earnings by optimizing your social security benefits
Self-Employed Retirement Plans in St. Petersburg, FL: Correct Capital's Process
St. Petersburg, FL business owners who don’t have the time or expertise to handle their retirement savings strategy on their own often feel overwhelmed when faced with their available plans. With Correct Capital, our St. Petersburg, FL financial advisors manage the majority of your savings plan setup for you, and strive to ensure meeting your financial objectives as hassle-free as possible for you. We can help you get set up your self-employed retirement plan in just four steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team will assess if we're suited to your needs for you and your business. This short conversation allows us to learn about your needs with no pressure or major time investment on your part.
- Gather Information: If we both decide to move forward, we'll ask for information, including your employee count, your existing financial picture, and your future objectives. This allows us to put together a custom plan that aligns with your goals.
- Review Your Plan: When we finalize a plan using the information you provide, we'll sit down with you and discuss your plan thoroughly to ensure you understand it 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 start saving. Throughout our relationship, we'll meet with you and track your progress to make sure it remains aligned with your goals.
Our St. Petersburg, FL financial advisors and retirement plan consultants serve as fiduciary advisors, meaning they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in St. Petersburg, FL include:
- Investment Management
- 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 St. Petersburg, FL
To you, your business is more than "just a business", and your St. Petersburg, FL financial advisors should provide more than basic financial recommendations. With Correct Capital, we take the time to get to know our clients and their businesses to deliver personalized self-employed retirement plans. All our clients in St. Petersburg, FL benefit from 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.
