Self-employed retirement plans Tampa, FL. The freedom of running your own company in Tampa, FL is one of the best aspects of having a self-directed career. However, this independence sometimes brings with potential drawbacks, notably when it comes to planning for retirement, because you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off looking into other possibilities. In addition to having a more secure retirement, working with a financial advisor in Tampa, FL to create your self-employed retirement plan can provide significant tax advantages that help your business to grow and succeed.
Few Tampa, FL financial advisory and retirement planning firms are as attuned to the requirements of small business owners better than Correct Capital. Our founder's father was a small business owner himself (learn more about our story here), and Correct Capital take pride in assisting business owners in their retirement planning needs. We recognize that your professional and personal aspirations aren’t limited to just monetary concerns, and we work tirelessly to create customized solutions aligned with your vision. Keep reading to learn more about your self-employed retirement plan options in Tampa, FL, or call Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Tampa, FL today.
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Why Tampa, FL Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also offer tangible benefits today. Offering flexibility in contributions to considerable tax savings, consulting a financial advisor in Tampa, FL allows you to customize 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) offers the freedom to adjust how much you save:
- Customizable Contributions: Contribute more during high-income years and scale back when your earnings dip, ensuring your plan works with your current income.
- Roth Options: A Roth Solo 401(k) lets you handle taxes upfront, allowing you to withdraw tax-free later—an advantageous choice if you anticipate your tax rate to be higher in the future.
Save Money on Taxes
Self-employed retirement plans deliver valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, helping you keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to grow.
- State-Specific Incentives: In some states, you might access additional deductions as a self-employed individual. These regional incentives help make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can claim a tax 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
Planning for a safe retirement goes beyond just how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Distributing your investments across varied asset classes like stocks and bonds can help mitigate financial risk while continuing to build your savings.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business prevents you from dipping into savings during tough times and facing tax penalties.
Plan for the Future of Your Tampa, FL Business
Retirement planning enables you to plan ahead for what’s next with your Tampa, FL business:
- Selling Your Business: When selling your business, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and are not part of the sale. These savings ensure the reliable income you’ll need later on. Keep in mind that while the sale of a business usually creates a capital gain, deposits into these plans are restricted by contribution limits (e.g., a maximum of $7,000 for IRAs or up to $70,000 for Solo 401(k)s, factoring in catch-up contributions, depending on plan details).
- Minimizing Taxes: Using retirement contributions wisely minimizes the taxes you’ll owe when you sell your business.
- Succession Planning: For those winding down or handing over their business, your nest egg offer financial security through the transition. You might want to partner with a financial advisor with expertise in succession and retirement planning to minimize tax burdens during the sale.
With the proper savings strategy, you can take control of your financial future, lower your tax bill, and establish a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Tampa, FL Now?
Time is one of the most important assets for building your retirement fund. Getting a head start not only helps you grow a bigger financial cushion but also minimizes the stress of playing catch-up as you get older. The following are reasons why it is beneficial to start now:
The Cost of Waiting
Waiting to start your retirement fund can have a major impact on the total you’ll have when you retire. The main reason is compound interest—the concept where your investments earn returns, and those returns, then, accumulate even more returns. The more time your money has to grow, the more significant the impact of this growth.
Example: Alex and Taylor are both self-employed professionals. They each aim to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor delays savings until age 40 but contributes $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and achieves a total of $691,184.39*.
- Taylor puts in $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently can lead to substantial growth. Take a look at this scenario showing the power of consistent growth:
- Starting at age 25: By investing $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: Investing the same $200 per month yields only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
The earlier you begin, the less effort required each year to achieve your retirement goals.
*These calculations represent estimates derived from NerdWallet’s Compound Interest Calculator, with the assumption of 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. Your individual results may differ based on elements like market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for personalized advice.
Take Control of Your Financial Future
As a self-employed person in Tampa, FL, it might seem easier to prioritize reinvesting in your business over saving for retirement. That said, starting a plan now gives you the chance to:
- Benefit from growth that is tax-deferred or tax-free withdrawals in the future.
- Enjoy contribution flexibility that align with your earnings.
- Build a financial cushion that provides security, no matter how your business changes.
Starting early, the less you’ll be required to worry about making up for lost time later in life. Taking steps toward your retirement goals today means gaining control over your financial future and creating for yourself the ability to turn your attention to your dreams—both for your golden years and your Tampa, FL business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for self-employed individuals in Tampa, FL, each offering its own benefits and trade-offs. A financial advisor is available to help you learn about the advantages and disadvantages of each plan and choose the one most suitable for your unique situation. Generally speaking, your self-employed retirement plan options in Tampa, FL are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that offer distinct tax benefits. In a standard IRA, the money you contribute is often tax-deductible, and investment earnings grow tax-deferred, but withdrawals in retirement are subject to income tax. In contrast, Roth IRAs require contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both cases, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, both traditional and Roth IRAs are available to anyone with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $7,000, or $8,000 for those aged 50+.
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 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) would not be able to contribute more than the 25% you (the employer) have designated. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. You have the flexibility to contribute a set monetary value or a percentage of wages to employee accounts. A SEP IRA works well for entrepreneurs facing periods of inconsistent earnings. In contrast to some alternatives, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs operate like standard 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 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
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 savings option for the self-employed meant for businesses with no employees or where the only employee is a spouse. These plans operate much like traditional employer-managed 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This provides more savings compared to SEPs or IRAs; however, the additional opportunities can be balanced by more restricted investment choices. Using a solo 401(k), you can make either traditional or Roth deferrals, which have 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: For self-employed individuals 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. The contribution limits for 2025 include $23,500, or $31,000 for those aged 50 and above, or $34,750 for those who turn 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) must not surpass 25% of your net self-employment income, which is calculated as net profits less half of your self-employment tax and the employee contributions you made.
The total contribution cannot exceed $70,000, or $77,500 for those aged 50 and older (in 2025), $81,250 if you attain age 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. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but allows self-employed individuals to know the precise amount they'll receive in retirement. This option is recommended for higher-income entrepreneurs who aim to accumulate a significant sum for retirement and can commit to making substantial contributions. Contributions offer tax-deferred growth, and withdrawals are taxed as income in retirement.
Eligibility: Entrepreneurs operating a solo business or with less than five employees are eligible to open an individual defined benefit plan, but it's generally suggested for individuals aged 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 if over age 50)
- Businesses currently investing 3-4% but are open to increasing contributions
- Organizations that have demonstrated consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or boost savings within a short timeframe
Contribution Limits: The cap on contributions is calculated by an actuary based on your financial situation, age, and savings targets. Allowable contributions are adjusted each year.
The Importance of a Financial Advisor in Tampa, FL for Your Self-Employed Retirement Plan
A financial advisor in Tampa, FL specialized in self-employed retirement plans can be an essential partner for those working for themselves. They have the expertise to help understand the intricacies of saving for retirement and develop a personalized approach that aligns with your goals. 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 features:
- Guide you in choosing a plan that best fits your needs and goals
- Tailor the plan to fit you personally even further
- Adopt a written plan in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Review and modify your plan as needed
- Provide ongoing education and advice throughout your retirement planning process
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Tampa, FL: Correct Capital's Process
Entrepreneurs in Tampa, FL who aren’t equipped with the time or understanding to manage their own retirement planning themselves can become overwhelmed when faced with their available plans. Through our team at Correct Capital, our Tampa, FL financial advisors manage the lion's share of your retirement planning for you, to help make meeting your financial objectives as straightforward as possible for you. We are here to assist you in setting up your self-employed retirement plan in a quick, four-step process:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can determine if we're a good fit for you and your business. This brief introduction allows us to learn about your needs with no obligation or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including how many employees you have (if any), your existing financial picture, and your future objectives. This enables us to craft a personalized strategy designed just for you.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll meet with you and review your plan thoroughly to ensure you understand it and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can begin contributing. Over the course of our partnership, we'll have regular meetings and review your strategy to keep it tailored to your evolving circumstances.
Our Tampa, 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 Tampa, FL include:
- 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 Tampa, FL
To you, your business is more than "just a business", and your Tampa, FL financial advisors need to offer more than basic financial recommendations. 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. To every client in Tampa, FL, we provide our I.O.U. promise: all of the advice you get from us 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.
