Self-employed retirement plans St. Petersburg, FL. The freedom of running your own company in St. Petersburg, FL offers many benefits of working for yourself. Even so, this independence often comes with a lack of security, notably regarding retirement savings, as you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off understanding their retirement options. In addition to enjoying a more comfortable retirement, partnering with a financial advisor in St. Petersburg, FL to establish your self-employed retirement plan delivers significant tax advantages that help you to move your business forward.
Few St. Petersburg, FL wealth management and retirement planning firms truly grasp the challenges faced by entrepreneurs as well as Correct Capital. The father of our founder was a small business owner himself (read more of our story here), and our firm are deeply experienced in supporting entrepreneurs with their retirement planning needs. We understand that your business and retirement aspirations extend well past basic numbers, and we are dedicated to provide tailored solutions to meet your unique goals. Continue exploring to find out 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 consult with 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 deliver tangible benefits today. With customizable contribution options to significant tax savings, working with a financial advisor in St. Petersburg, FL helps you design your retirement plan to suit your individual circumstances.
Flexibility That Fits Your Income
For those with fluctuating income annually, a plan like a SEP IRA or Solo 401(k) provides the flexibility to adjust how much you save:
- Customizable Contributions: Set aside more during successful years and scale back when your earnings dip, ensuring your plan aligns with your cash flow.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw your savings tax-free down the road—a smart decision if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, so you can keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for state-specific credits as a business owner. These regional incentives make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can claim a tax credit of up to 50% of the first $2,000 put into a retirement plan, further reducing 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 linked to the way you invest:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and alternatives can help minimize exposure to risk while continuing to build your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business prevents you from tapping into your nest egg during financial hardships and incurring penalties.
Plan for the Future of Your St. Petersburg, FL Business
A thoughtful retirement strategy also helps you plan ahead for what’s next with your St. Petersburg, FL business:
- Selling Your Business: For those considering a sale, accounts such as SEP IRAs or Solo 401(k)s remain yours and are not part of the sale. These plans ensure the reliable income you’ll need in the future. Keep in mind that while selling your business results in a capital gain, contributions to retirement accounts are capped at annual limits (e.g., up to $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, with catch-up contributions, according to plan rules).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you might face when you sell your business.
- Succession Planning: For those winding down or handing over their business, your retirement accounts offer the funds you need as you make this shift. You might want to partner with a financial advisor who specializes in succession planning and retirement accounts to reduce taxes associated with the transaction.
With the right retirement plan, you gain control over your financial future, reduce your tax burden, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in St. Petersburg, FL Now?
Time remains one of the most important resources in retirement planning. Beginning sooner rather than later not only helps you grow a bigger financial cushion but also reduces the financial burden of saving aggressively in the future. Here’s why it is beneficial to start now:
The Cost of Waiting
Delaying your retirement savings could lead to a substantial impact on the amount you’ll have when you stop working. The biggest reason is compound interest—the powerful process where your investments earn returns, and those returns, subsequently, generate even more returns. The more time your money has to grow, the more significant the benefit of compounding.
Example: Taylor and Alex are both entrepreneurs. They each aim to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor waits until age 40 but saves $7,500 annually to bridge the gap.
By age 65, with an assumption of 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 contributed over time often create significant growth. Here’s a simple scenario showing the effect of compound interest:
- Starting at age 25: If you invest $200 per month in a retirement plan with an average annual return of 7%, you’ll end up with $497,303.29* by age 65.
- Starting at age 35: Saving 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.
Saving early, the lower your annual savings needs each year to meet your retirement goals.
*These calculations are estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. This information is intended as illustrative examples and are not a promise of future results. Your individual results may differ based on elements like market conditions, fees, and personal factors. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in St. Petersburg, FL, it is often the case that you focus more on reinvesting in your business instead of saving for retirement. Even so, beginning a plan now gives you the chance to:
- Benefit from growth that is tax-deferred or withdrawals without taxes in the future.
- Take advantage of contribution flexibility that change with your cash flow.
- Create a long-term safety measure that offers peace of mind, no matter how your business evolves.
Starting early, the less you’ll have to worry about catching up later in life. Taking steps toward your retirement goals today means taking control of your financial future and creating for yourself the ability to concentrate on your goals—both for your retirement years and your St. Petersburg, FL business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options designed for self-employed individuals in St. Petersburg, FL, each offering its own advantages and considerations. A financial advisor will guide you to understand the benefits and drawbacks of each plan and choose the one ideal for your circumstances. Typically, your self-employed retirement plan options in St. Petersburg, FL consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that offer key tax perks. In a traditional IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but retirement distributions are subject to income tax. In contrast, Roth IRAs require contributions from post-tax earnings, but eligible distributions during retirement, including earnings, are exempt from taxes. In both cases, withdrawals are penalty-free provided you are at least 59½.
Eligibility: Unlike plans linked to your job, both traditional and Roth IRAs are accessible for individuals with an earned income.
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: A Simplified Employee Pension (SEP) IRA offers a way to save for retirement that permits self-employed individuals to save a percentage of their net business profits. Contributions are strictly employer contributions an employer, so, as a self-employed individual, you (the employee) cannot make additional contributions above the 25% you (the employer) already contributed. If you have employees, it's required to contribute the same amount for them as you do for yourself. It's your choice whether to contribute a fixed dollar figure or a percentage of wages to employee accounts. SEP IRAs may be ideal 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 the contributions are tax-deferred and money withdrawn is subject to income tax.
Eligibility: Both employers and 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
If you’re self-employed, 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 retirement savings plan intended for businesses without employees or where the only employee is a spouse. These plans operate much like standard 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the additional opportunities often come with more limited investment options. 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: This plan is exclusively for business owners and their spouses may establish and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you have the ability to make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your self-employment income, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you are 50 or older, or $34,750 if you attain age 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your adjusted 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 for individuals aged 50+ (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans is a retirement option that provides a fixed, predetermined benefit to business owners upon retirement. In contrast to the plans discussed earlier, this plan is not influenced by market performance, but lets individuals clearly understand exactly how much they'll receive in retirement. This plan is best suited for wealthier self-employed individuals who are focused on saving a large amount for retirement and can commit to making substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income upon retirement.
Eligibility: Self-employed professionals managing a one-person company or employing fewer than five people may establish an individual defined benefit plan, but it's most commonly suggested for people above age 50 who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans are:
- Business owners or partners who desire to contribute more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% but are open to increasing contributions
- Companies showing consistent profit patterns
- Entrepreneurs over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution is calculated by an actuary determined by your earnings, age, and retirement objectives. Contribution limits are adjusted each year.
The Importance of a Financial Advisor in St. Petersburg, FL for Your Self-Employed Retirement Plan
A financial advisor in St. Petersburg, FL experienced with retirement plans for the self-employed can be an invaluable resource for self-employed individuals. They have the expertise to help guide you through the challenges of retirement planning and develop a customized plan that matches your objectives. A financial advisor in St. Petersburg, FL will review your finances, identify your risk preferences, and assist you in making informed decisions about saving and investing for retirement. Part of what we do for you includes:
- Assist in selecting a plan that suits your unique requirements
- Tailor the plan to your needs even further
- Create a written plan that complies with IRS regulations
- Organize a trust plan to manage your assets
- Ensure you comprehend the plan's terms
- Review and modify your plan when necessary
- Deliver continuous support and financial insights throughout your retirement planning process
- Maximize what you receive in retirement by maximizing your social security benefits
Self-Employed Retirement Plans in St. Petersburg, FL: Correct Capital's Process
Self-employed individuals in St. Petersburg, FL who lack the time, interest, or knowledge to manage their retirement savings strategy themselves can become overwhelmed as they look at their choices. With Correct Capital, our St. Petersburg, FL financial advisors manage the bulk of your retirement planning for you, working to make meeting your retirement goals as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team will assess if our services align for you and your business. This brief introduction helps us learn about your needs with zero commitment or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including how many employees you have (if any), your present financial standing, and your long-term savings targets. This helps us create a personalized strategy 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 go over your plan step by step to make sure it's clear and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can begin contributing. 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 act as 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. Petersburg, FL 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. Petersburg, FL
To you, your business is more than "just a business", and your St. Petersburg, FL financial advisors must deliver more than simply sound financial advice. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to provide personalized self-employed retirement plans. We offer all our St. Petersburg, FL clients our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To begin on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
