Self-employed retirement plans Tampa, FL. The flexibility of running your own company in Tampa, FL offers many benefits of working for yourself. That said, this freedom can come with a lack of security, particularly regarding building your retirement fund, as you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, but many should consider understanding their retirement options. In addition to achieving a more secure retirement, working with a financial advisor in Tampa, FL to establish your self-employed retirement plan delivers significant tax advantages that help you to move your business forward.
Few Tampa, FL wealth management and retirement planning firms are as attuned to the requirements of entrepreneurs as well as Correct Capital. The father of our founder was a small business owner himself (check out our story here), and our firm have a rich history of assisting business owners in their retirement planning needs. We know that your business and retirement aspirations extend well past basic numbers, and we strive to create personalized solutions to meet your unique goals. Continue exploring to find out about your self-employed retirement plan options in Tampa, FL, or reach out to Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Tampa, FL today.
Why Tampa, FL Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also provide tangible benefits today. From flexible contributions to considerable tax savings, working with a financial advisor in Tampa, FL allows you to create your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
If your income changes over time, 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 reduce savings when revenues are down, ensuring your plan aligns with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, so you can withdraw your savings tax-free down the road—a smart decision if you anticipate your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, allowing you to keep more of your income.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, giving your money more time to accumulate.
- State-Specific Incentives: Depending on where you live, you could qualify for state-specific credits as a business owner. These regional incentives make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can take advantage of 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 goes beyond just how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Distributing your investments across a mix of asset classes like stocks and bonds is a smart way to minimize exposure to risk while continuing to build your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund ensures you don’t dipping into savings during challenging periods and facing tax penalties.
Plan for the Future of Your Tampa, FL Business
Retirement planning can assist you prepare for what’s next with your Tampa, FL business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s remain yours and don’t transfer with the business. These accounts ensure the reliable income you’ll need in the future. Keep in mind that while selling a business often leads to a capital gain, retirement plan contributions are restricted by contribution limits (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, with catch-up contributions, depending on plan details).
- Minimizing Taxes: Using retirement contributions wisely can reduce the taxes you are required to pay when you pass on your business.
- Succession Planning: For those winding down or handing over their business, your nest egg ensure financial security through the transition. You might want to seek advice from a financial advisor experienced in both succession and retirement strategies to reduce taxes during the sale.
With the best-fit retirement strategy, you manage your financial future, reduce your tax burden, and build a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Tampa, FL Now?
Time remains one of the most crucial assets for building your retirement fund. Getting a head start not only helps you grow a larger nest egg but also minimizes the pressure of playing catch-up as you get older. This is why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings could lead to a significant impact on the savings you’ll have when you reach retirement age. The primary reason is compound interest—the concept where your investments grow, and those returns, subsequently, generate even more returns. The greater time span your money has to grow, the more significant the benefit of this growth.
Example: Two individuals, Alex and Taylor are both self-employed individuals. 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 puts away $7,500 annually to bridge the gap.
By age 65, using a projected 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time can lead to impressive growth. Take a look at this scenario showing the impact of consistent growth:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an average annual return of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Saving the same $200 per month yields only $235,412.97* by age 65—a difference of over $260,000, all because of a 10-year delay.
Saving early, the less effort required each year to meet your retirement goals.
*The numbers shown in this scenario represent estimates calculated using NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. This information is for illustrative purposes only and are not a promise of future results. Outcomes may change due to variables including market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Tampa, FL, it is often the case that you put more emphasis on reinvesting in your business rather than saving for retirement. That said, initiating a plan now gives you the chance to:
- Benefit from tax-deferred growth or withdrawals without taxes down the road.
- Benefit from adjustable savings that align with your cash flow.
- Establish a long-term safety measure that provides security, no matter how your business develops.
Starting early, the less you’ll need to worry about catching up later in life. Saving for retirement now means taking control of your financial future and creating for yourself the opportunity to concentrate on your dreams—both for your future retirement and your Tampa, FL business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for those working for themselves in Tampa, FL, each with its own advantages and considerations. A financial advisor is available to help you understand the advantages and disadvantages of each choice and identify the one best suited for your circumstances. Typically, your self-employed retirement plan options in Tampa, FL consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that offer specific tax advantages. In a traditional IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but withdrawals in retirement are subject to income tax. In contrast, with Roth IRAs, you contribute from post-tax earnings, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both cases, withdrawals come without penalties if you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, IRAs, including traditional and Roth options are available to anyone with taxable earnings.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $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 enables entrepreneurs to set aside a portion of their self-employment income. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) would not be able to contribute beyond the 25% you (the employer) allocate. 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 set monetary value or a percentage of wages to employee accounts. This type of plan may be ideal for businesses that experience cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs don’t have costly startup or administrative fees.
SEPs work like traditional 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 set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA are capped at the lower of:
- 25% of compensation, or
- $70,000 for 2025
If you’re self-employed, the allowable contribution 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 savings option for the self-employed designed for businesses with no employees or where the only employee is a spouse. Solo 401(k)s are similar to traditional employer-managed 401(k) plans, and allow you to contribute as both an employer and an employee with pre-tax money. This offers more savings than SEPs or IRAs; however, the additional opportunities often come with more restricted investment choices. 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 can set up and contribute to a solo 401(k).
Contribution Limits: For self-employed individuals with a solo 401(k) plan, you can make two types of contributions:
- Deferrals as an employee of up to 100% of your earned income from self-employment, subject to the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you're over 50, or $34,750 for those who turn 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the elective deferrals you made.
Total contributions are capped at $70,000, or $77,500 for those aged 50 and older (for 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans offers a structured retirement solution that delivers a pre-established payout to business owners upon retirement. As opposed to defined contribution plans, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine the precise amount they'll have in retirement. This strategy is recommended for high-earning entrepreneurs who want to save a significant sum for retirement and can commit to making larger deposits. Contributions are tax deferred, and withdrawals are taxable as income in retirement.
Eligibility: Any self-employed individual operating a solo business or employing fewer than five people may establish an individual defined benefit plan, but it's typically recommended for individuals aged 50+ who generate a minimum of $250,000 yearly. In most cases, good candidates for defined benefit plans are:
- Partners or owners who aim to deposit more than $70,000 (or $77,500 if over age 50)
- Businesses currently investing 3-4% but are open to increasing contributions
- Businesses that have demonstrated consistent profit patterns
- Partners or owners over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The contribution limit must be determined by an actuary determined by your financial situation, age, and savings targets. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Tampa, FL for Your Self-Employed Retirement Plan
Partnering with an advisor in Tampa, FL focused on self-employed retirement strategies is an invaluable resource for self-employed individuals. They bring the skills needed to understand the intricacies of saving for retirement and design a tailored strategy that reflects your aspirations. Your advisor in Tampa, FL will evaluate your financial situation, identify your risk preferences, and guide you in choosing wisely about saving and investing for retirement. Part of what we do for you includes:
- Assist in selecting a plan that best fits your needs and goals
- Customize the plan to fit you personally even further
- Formalize a plan in writing that complies with IRS regulations
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan when necessary
- Deliver continuous support and financial insights as you continue on the road to retirement
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Tampa, FL: Correct Capital's Process
Self-employed individuals in Tampa, FL who aren’t equipped with the time or understanding to oversee their self-employed retirement plan themselves often feel overwhelmed as they look at their choices. Through our team at Correct Capital, our Tampa, FL financial advisors handle the majority of your retirement planning for you, working to make meeting your future savings targets as hassle-free as possible for you. We can help you get set 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 help understand if we're a good fit for you and your business. This brief introduction helps us get a sense of your goals with no pressure or major time investment on your part.
- Gather Information: Should we agree to proceed, we'll gather information, including whether you have employees, your current financial situation, and your retirement goals. This enables us to craft a tailored approach designed just for you.
- Review Your Plan: When we finalize a plan from the information you provide, we'll sit down with you and review your plan step by step to help you fully grasp it and understand how it best correlates to your needs.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can begin contributing. Over the course of our partnership, we'll meet with you and track your progress to keep it tailored to your evolving circumstances.
Our Tampa, FL financial advisors and retirement plan consultants serve as fiduciary advisors, which means they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Tampa, FL include:
- 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
- Retirement Planner
Call Correct Capital for Your Self-Employed Retirement Plan in Tampa, FL
To you, your business is more than "just a business", and your Tampa, FL financial advisors should provide 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 customized self-employed retirement plans. We offer all our Tampa, FL 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.
