Self-employed retirement plans Sunnyvale, CA. The flexibility of being your own boss in Sunnyvale, CA is one of the greatest advantages of working for yourself. That said, this independence sometimes brings with certain challenges, notably when it comes to retirement savings, as you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many could benefit from looking into other possibilities. In addition to enjoying a financially stable retirement, working with a financial advisor in Sunnyvale, CA to establish your self-employed retirement plan offers significant tax advantages that help your business to grow and succeed.
Few Sunnyvale, CA wealth management and retirement planning firms are as attuned to the requirements of self-employed individuals quite like 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 supporting entrepreneurs with their retirement planning needs. We know that your business and retirement aspirations extend well past just monetary concerns, and we work tirelessly to create personalized solutions to meet your unique goals. Continue exploring to find out about your self-employed retirement plan options in Sunnyvale, CA, or reach out to Correct Capital at 877-930-401k or contact us online to talk to a small business financial advisor in Sunnyvale, CA today.
Why Sunnyvale, CA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also deliver real benefits today. From flexible contributions to considerable tax savings, consulting a financial advisor in Sunnyvale, CA helps you design your retirement plan to align with 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 option to modify how much you save:
- Customizable Contributions: Set aside more during successful years and scale back when your earnings dip, ensuring your plan works with your cash flow.
- Roth Options: Choosing 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 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 lower your taxable income, allowing you to keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, which gives your money more time to grow.
- State-Specific Incentives: Based on your location, you could qualify for state-specific tax breaks as a sole proprietor. These local incentives help make these plans even more beneficial.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a credit of up to 50% of the first $2,000 contributed a retirement plan, further reducing your tax bill even more.
Protect Your Savings With Smart Investments
Building a secure retirement requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Spreading your investments across different stocks, bonds, and other assets can help minimize exposure to risk while continuing to build your savings.
- Emergency Back-Up: Pairing your retirement plan with a dedicated business safety net prevents you from using your retirement funds during challenging periods and incurring penalties.
Plan for the Future of Your Sunnyvale, CA Business
Retirement planning enables you to prepare for what’s next with your Sunnyvale, CA business:
- Selling Your Business: When selling your business, 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 steady income you’ll need in the future. Keep in mind that while selling your business results in a capital gain, retirement plan contributions are capped at annual limits (e.g., as much as $7,000 for IRAs or up to $70,000 for Solo 401(k)s, factoring in catch-up contributions, based on plan compensation).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you are required to pay when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings offer financial security through the transition. You might want to partner with a financial advisor experienced in both succession and retirement strategies to reduce taxes on the sale.
With the proper savings strategy, you can take control of your financial future, lower your tax bill, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Sunnyvale, CA Now?
Time is one of the most important assets when it comes to saving for retirement. Starting early not only allows you to build a more substantial retirement fund but also minimizes the pressure of playing catch-up as you get older. This is why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund could lead to a substantial impact on the total you’ll have when you retire. The primary reason is compound interest—the powerful process where your investments grow, and those returns, in turn, accumulate even more returns. The greater time span your money has to grow, the more significant the effect of this growth.
Example: 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 saves $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 puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments invested steadily often create impressive growth. Take a look at this scenario showing the power of compounding:
- Starting at age 25: If you invest $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month would result in only $235,412.97* by age 65—a difference of over $260,000, just from a 10-year delay.
Saving early, the less effort required each year to achieve your retirement goals.
*These calculations represent estimates generated with NerdWallet’s Compound Interest Calculator, based on a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. These examples are intended as illustrative examples and do not guarantee future performance. Your individual results may differ due to variables including market conditions, fees, and your unique situation. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Sunnyvale, CA, it can be tempting to prioritize reinvesting in your business rather than saving for retirement. That said, starting a plan now gives you the chance to:
- Take advantage of growth that is tax-deferred or tax-free withdrawals in the future.
- Benefit from adjustable savings that change with your cash flow.
- Establish a safety net that ensures stability, no matter how your business evolves.
Getting started now, the less you’ll be required to worry about making up for lost time later in life. Building your retirement savings today means managing your financial future and creating for yourself the opportunity to turn your attention to your dreams—both for your golden years and your Sunnyvale, CA business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for entrepreneurs in Sunnyvale, CA, each offering its own pros and cons. A financial advisor is available to help you understand the benefits and drawbacks of each choice and identify the one best suited for your needs. In most cases, your self-employed retirement plan options in Sunnyvale, CA consist of:
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, contributions are typically tax-deductible, and earnings grow without immediate taxation, but money taken out during retirement are taxable. In contrast, Roth IRA contributions are made with after-tax income, but eligible distributions during retirement, including earnings, are exempt from taxes. In both types of accounts, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, traditional and Roth IRAs are open to those with taxable earnings.
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 permits those who are self-employed to contribute a percentage of their net earnings. Contributions are strictly employer contributions an employer, so, as a sole proprietor, you (the employee) cannot make additional contributions beyond the 25% you (the employer) have designated. If you have employees, it's required to contribute the same amount for them as you do for yourself. You have the flexibility to contribute a flat-dollar amount or a percentage of wages to employee accounts. A SEP IRA is a good option for businesses that experience periods of inconsistent earnings. Unlike other plans, SEP IRAs are free of the high fees associated with starting or maintaining other plans.
SEPs function like conventional IRAs, where contributions are made with pre-tax money 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 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, also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses without employees or if the only employee is your spouse. This type of plan operate much like employer-sponsored 401(k) plans, and let you make contributions as both the employer and the employee with pre-tax money. This provides more savings versus SEPs or IRAs; however, the increased savings potential may be offset by more constrained investment avenues. 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 are allowed to make two types of contributions:
- Deferrals as an employee of up to 100% of your self-employment income, up to the annual contribution limit. In 2025, those limits are $23,500, or $31,000 if you're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) cannot exceed 25% of your net earnings from self-employment, which is calculated as net profits less half of your self-employment tax and the elective deferrals you made.
Your combined contributions must not surpass $70,000, or $77,500 for individuals aged 50+ (as of 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan represents a type of retirement plan that provides a fixed, predetermined benefit to business owners upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but allows self-employed individuals to know exactly how much they'll get in retirement. This plan is ideal for wealthier entrepreneurs who aim to accumulate a significant sum for retirement and are willing to make larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxable as income during retirement.
Eligibility: Self-employed professionals managing a one-person company or with less than five employees are eligible to open an individual defined benefit plan, but it's typically suggested for individuals aged 50+ who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans tend to be:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% but are open to increasing contributions
- Businesses that have demonstrated consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The contribution limit requires calculation from an actuary based on your income, age, and retirement goals. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Sunnyvale, CA for Your Self-Employed Retirement Plan
A financial advisor in Sunnyvale, CA specialized in self-employed retirement plans serves as an essential partner for those working for themselves. They offer the knowledge to assist understand the intricacies of saving for retirement and develop a personalized approach that reflects your aspirations. An expert in your area will assess where you stand financially, understand your risk tolerance, and help you in choosing wisely about saving and investing for retirement. Included in what we do for you includes:
- Help you choose a plan that best fits your needs and goals
- Tailor the plan to your specific situation even further
- Create a written plan in accordance with IRS guidelines
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Track and fine-tune your plan to keep it aligned with your goals
- Deliver continuous support and financial insights as you continue on the road to retirement
- Increase your retirement income by maximizing your social security benefits
Self-Employed Retirement Plans in Sunnyvale, CA: Correct Capital's Process
Entrepreneurs in Sunnyvale, CA who aren’t equipped with the time or understanding to manage their self-employed retirement plan independently often feel overwhelmed as they look at their available plans. At Correct Capital, our Sunnyvale, CA financial advisors manage the lion's share of your retirement planning for you, to help make meeting your retirement goals as straightforward 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: It only takes 20 minutes, a member of our advisor team can determine if our services align for you and your business. This initial call allows us to understand what you're looking for with zero commitment or significant effort on your part.
- Gather Information: If we both decide to move forward, we'll request information, including your employee count, your existing financial picture, and your long-term savings targets. This enables us to craft a custom plan designed just for you.
- Review Your Plan: When we finalize a plan using the information you provide, we'll meet with you and review your plan thoroughly to make sure it's clear and show how it aligns with your goals.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can initiate your savings journey. Throughout our relationship, we'll check in and review your strategy to make sure it remains aligned with your goals.
Our Sunnyvale, CA financial advisors and retirement plan consultants are fiduciary advisors, meaning they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in Sunnyvale, CA 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 Sunnyvale, CA
You don't see your business as "just a business", and your Sunnyvale, CA financial advisors should provide more than just good financial guidance. Correct Capital takes pride in, we take the time to get to know our clients and their businesses to provide tailored self-employed retirement plans. We offer all our Sunnyvale, CA clients our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
