Self-employed retirement plans Toledo, OH. The flexibility of being your own boss in Toledo, OH is one of the greatest advantages of having a self-directed career. However, this independence sometimes brings with certain challenges, particularly in terms of retirement savings, since you don't have the benefit of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless could benefit from looking into other possibilities. In addition to enjoying a financially stable retirement, working with a financial advisor in Toledo, OH to set up your self-employed retirement plan can provide significant tax advantages that enable your business to grow and succeed.
Few Toledo, OH financial advisory and retirement planning firms are as attuned to the requirements of self-employed individuals 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 understand that your business and retirement aspirations aren’t limited to simple financial figures, and we are dedicated to provide personalized solutions that reflect your objectives. Continue exploring to find out about your self-employed retirement plan options in Toledo, OH, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Toledo, OH today.
Schedule a Meeting With an Advisor Today
Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
Schedule a 15-Minute Introductory Call
Why Toledo, OH Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals are essential for preparing you for the future, they also provide immediate benefits today. Offering flexibility in contributions to substantial tax savings, consulting a financial advisor in Toledo, OH allows you to customize your retirement plan to align with your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary from year to year, a plan like a SEP IRA or Solo 401(k) gives you the option to modify how much you save:
- Customizable Contributions: Set aside more during high-income years and scale back when revenues are down, so that your plan fits your financial situation.
- Roth Options: A Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw your savings tax-free down the road—a wise move if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Retirement plans for self-employed individuals provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA shrink your tax liability, so you can keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, providing your money more time to accumulate.
- State-Specific Incentives: Based on your location, you might access additional credits as a business owner. These state-level incentives make these plans even more beneficial.
- 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
Building a secure retirement isn’t only about how much you save—it’s also about how you invest:
- Diversified Portfolios: Allocating your investments across varied stocks, bonds, and alternatives is a smart way to mitigate financial risk while continuing to build your retirement fund.
- Emergency Back-Up: Pairing your retirement plan with a financial buffer for your business prevents you from tapping into your nest egg during financial hardships and facing tax penalties.
Plan for the Future of Your Toledo, OH Business
A thoughtful retirement strategy also helps you plan ahead for what’s next with your Toledo, OH business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s remain your personal assets and don’t transfer with the business. These savings can provide the financial stability you’ll need during retirement. Keep in mind that while selling your business results in a capital gain, deposits into these plans are restricted by contribution 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, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings minimizes the taxes you’ll owe when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts ensure a stable foundation as you make this shift. You might want to partner with a financial advisor experienced in both succession and retirement strategies to minimize tax burdens associated with the transaction.
With the right retirement plan, you gain control over your financial future, cut down your tax obligations, and establish a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Toledo, OH Now?
Time remains one of the most important factors when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a larger nest egg but also minimizes the pressure of catching up later in life. Here’s why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings can have a major impact on the savings you’ll have when you reach retirement age. The biggest reason is compound interest—the concept where your investments grow, and those returns, in turn, generate even more returns. The longer your money has to grow, the larger the benefit of compounding.
Example: Alex and Taylor are both self-employed professionals. They each aim to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor delays savings until age 40 but contributes $7,500 annually to make up for lost time.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and accumulates $691,184.39*.
- Taylor contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time can lead to impressive growth. Consider this example showing the impact of compounding:
- Starting at age 25: Putting aside $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: Saving the same $200 per month would result in only $235,412.97* by age 65—a shortfall of over $260,000, simply due to a 10-year delay.
Saving early, the less effort required each year to meet your retirement goals.
*The figures provided in this example are estimates derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are intended as illustrative examples and are not a promise of future results. Actual results may vary due to factors such as market conditions, fees, and personal factors. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Toledo, OH, it might seem easier to put more emphasis on reinvesting in your business over saving for retirement. However, beginning a plan now allows you to:
- Leverage tax-deferred growth or penalty-free withdrawals down the road.
- Benefit from flexible contributions that align with your income.
- Establish a financial cushion that ensures stability, no matter how your business changes.
The sooner you start, the less you’ll be required to worry about playing catch-up later in life. Building your retirement savings today means taking control of your financial future and giving yourself the freedom to turn your attention to your goals—both for your golden years and your Toledo, OH business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for self-employed individuals in Toledo, OH, each with its own advantages and considerations. A financial advisor will guide you to understand the benefits and drawbacks of each plan and identify the one most suitable for your needs. In most cases, your self-employed retirement plan options in Toledo, OH include:
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, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but money taken out during retirement are taxable. In contrast, with Roth IRAs, you contribute from post-tax earnings, 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 accessible for individuals with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped 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 enables entrepreneurs 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, you are obligated 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. This type of plan is a good option for businesses that experience cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs are free of 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: Any employer, including the self-employed can establish 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 amount eligible to be contributed is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed intended for businesses without employees or when the sole employee is your spouse. These plans operate much like traditional employer-managed 401(k) plans, and allow you to contribute as both an employee or an employer with pre-tax money. This provides more savings than SEPs or IRAs; however, the increased savings potential can be balanced by more limited investment options. With this type of plan, you can make either traditional or Roth deferrals, which offer 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: As a self-employed individual with a solo 401(k) plan, you have the ability to make two types of contributions:
- Employee contributions of up to 100% of your earned income from self-employment, capped at the annual contribution limit. In 2025, those limits are $23,500, or $31,000 for those aged 50 and above, or $34,750 if you attain age 60-63 in 2025.
- Employer profit-sharing contributions (as an employer) are limited to 25% of your net self-employment income, which is defined as net profit minus half of your self-employment tax and the employee contributions you made.
The total contribution cannot exceed $70,000, or $77,500 if you're over age 50 (for 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans is a retirement option that provides a fixed, predetermined benefit to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but enables participants to determine the precise amount they'll get in retirement. This plan is ideal for higher-income professionals who aim to accumulate a large amount for retirement and can commit to making sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxed as income during retirement.
Eligibility: Self-employed professionals operating a solo business or with a small staff of under five are eligible to open an individual defined benefit plan, but it's most commonly suggested for people above age 50 who generate a minimum of $250,000 yearly. Typically, 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)
- Businesses currently investing 3-4% but are open to increasing contributions
- Companies that have demonstrated consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The contribution limit is calculated by an actuary determined by your income, age, and retirement goals. Limits on contributions change annually.
The Importance of a Financial Advisor in Toledo, OH for Your Self-Employed Retirement Plan
Working with a financial advisor in Toledo, OH focused on self-employed retirement strategies is an essential partner for self-employed individuals. They bring the skills needed to navigate the complexities of retirement planning and develop a tailored strategy that matches your objectives. Your advisor in Toledo, OH will review your finances, determine how much risk you’re comfortable with, and guide you in choosing wisely about saving and investing for retirement. A key part of what we do for you features:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Customize the plan to your specific situation even further
- Adopt a written plan as required by IRS rules
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Monitor and adjust your plan as needed
- Deliver continuous support and financial insights throughout your retirement planning process
- Boost your retirement earnings by making the most of your social security
Self-Employed Retirement Plans in Toledo, OH: Correct Capital's Process
Toledo, OH business owners who lack the time, interest, or knowledge to handle their own retirement planning on their own often feel overwhelmed as they look at their available plans. Through our team at Correct Capital, our Toledo, OH financial advisors take on the bulk of your retirement strategy 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: In just 20 minutes, a member of our advisor team can determine if we're a good fit for you and your business. This short conversation helps us learn about your needs with no obligation or major time investment on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including how many employees you have (if any), your current financial situation, and your long-term savings targets. This enables us to craft a custom plan that aligns with your goals.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll meet with you and review your plan in detail to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: Once we've agreed on your plan, we'll set everything up so you can start saving. As time goes on, we'll check in and monitor your plan to make sure it remains aligned with your goals.
Our Toledo, OH financial advisors and retirement plan consultants serve as fiduciary advisors, who are obligated to they are required by law and ethical standards to do what's in your best interest.
Other financial advisory services we offer in Toledo, OH 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 Toledo, OH
You don't see your business as "just a business", and your Toledo, OH financial advisors need to offer more than simply sound financial advice. At Correct Capital, we focus on building a relationship with our clients and their businesses to provide personalized self-employed retirement plans. We offer all our Toledo, OH clients our I.O.U. promise: everything we recommend 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.
