Self-employed retirement plans Tucson, AZ. The independence of being your own boss in Tucson, AZ offers many benefits of being self-employed. Even so, this independence can come with certain challenges, notably when it comes to retirement savings, because you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless should consider exploring their options. In addition to having a more secure retirement, seeking advice from a financial advisor in Tucson, AZ to establish your self-employed retirement plan offers significant tax advantages that enable you to move your business forward.
Few Tucson, AZ wealth management and retirement planning firms understand the needs of small business owners 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 goals for your business and retirement aren’t limited to just monetary concerns, and we strive to provide personalized solutions that reflect your objectives. Keep reading to learn more about your self-employed retirement plan options in Tucson, AZ, or call Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Tucson, AZ today.
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Why Tucson, AZ Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also provide real benefits today. From flexible contributions to considerable tax savings, working with a financial advisor in Tucson, AZ helps you 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) offers the freedom to tailor how much you save:
- Customizable Contributions: Contribute more during successful years and scale back when revenues are down, so your plan fits your cash flow.
- Roth Options: Opting for a Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw your savings tax-free down the road—a smart decision if you believe your tax rate to be higher in the future.
Save Money on Taxes
Retirement plans for self-employed individuals provide powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA shrink your tax liability, so you can keep more of your hard-earned money.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, which gives your money more time to accumulate.
- State-Specific Incentives: In some states, you could qualify for additional tax breaks as a business owner. These regional incentives 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 they contribute a retirement plan, helping to lower 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: Allocating your investments across different stocks, bonds, and alternatives can help reduce risk while helping to grow your savings.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business prevents you from tapping into your nest egg during tough times and risking extra costs.
Plan for the Future of Your Tucson, AZ Business
A thoughtful retirement strategy enables you to plan ahead for what’s next with your Tucson, AZ business:
- Selling Your Business: When selling your business, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and are not part of the sale. These accounts ensure the reliable income you’ll need later on. Keep in mind that while selling a business often leads to a capital gain, deposits into these plans are restricted by contribution limits (e.g., as much as $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Making the most of retirement savings can reduce the taxes you are required to pay when you pass on your business.
- Succession Planning: If you’re passing the business on, your retirement savings ensure a stable foundation through the transition. You may also partner with a financial advisor experienced in both succession and retirement strategies to reduce taxes associated with the transaction.
With the right retirement plan, you manage your financial future, reduce your tax burden, and create a strong framework for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Tucson, AZ Now?
There’s no denying that time is one of the most crucial factors for building your retirement fund. Beginning sooner rather than later not only helps you grow a larger nest egg but also lowers the financial burden of playing catch-up as you get older. Here’s why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement could lead to a substantial impact on the amount you’ll have when you retire. The primary reason is compound interest—the financial principle where your investments earn returns, and those returns, in turn, earn even more returns. The longer your money has to grow, the more significant the impact of compounding.
Example: Taylor and Alex 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 puts away $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex contributes $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time may result in substantial growth. Consider this example showing the effect of consistent growth:
- Starting at age 25: By investing $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 leaves you with only $235,412.97* by age 65—a shortfall of over $260,000, just from a 10-year delay.
Saving early, the less you need to save each year to achieve your retirement goals.
*These calculations represent estimates derived from NerdWallet’s Compound Interest Calculator, based on a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. The scenarios provided are intended as illustrative examples and cannot predict actual future outcomes. Actual results may vary depending on factors such as market conditions, fees, and individual circumstances. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Tucson, AZ, it might seem easier to put more emphasis on reinvesting in your business over saving for retirement. That said, beginning a plan now gives you the chance to:
- Benefit from tax-deferred growth or penalty-free withdrawals down the road.
- Take advantage of adjustable savings that align with your earnings.
- Create a safety net that offers peace of mind, no matter how your business develops.
The sooner you start, the less you’ll have to worry about making up for lost time later in life. Saving for retirement now means taking control of your financial future and allowing yourself the freedom to focus on your objectives—both for your golden years and your Tucson, AZ business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options designed for those working for themselves in Tucson, AZ, each offering its own advantages and considerations. A financial advisor is available to help you learn about the pros and cons of each choice and determine the one most suitable for your needs. Generally speaking, your self-employed retirement plan options in Tucson, AZ include:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that offer specific tax advantages. In a traditional IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but retirement distributions are taxable. In contrast, Roth IRAs require contributions are made with after-tax income, but retirement withdrawals that qualify, including earnings, are tax-free. In both accounts, withdrawals come without penalties provided you are at least 59½.
Eligibility: Unlike plans linked to your job, traditional and Roth IRAs are open to those with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 if you qualify for catch-up contributions.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: A Simplified Employee Pension (SEP) IRA is a retirement plan that permits entrepreneurs to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a independent business owner, you (the employee) are limited to contributions from the employer role above 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 may choose to contribute a set monetary value or a percentage of wages to employee accounts. This type of plan may be ideal for companies with cycles of high revenue and low revenue. Compared to other retirement options, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs function like traditional IRAs, where contributions are made with pre-tax money and retirement distributions are taxable.
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
As a self-employed person, the contribution you can make 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 designed for businesses without employees or if the only employee is your spouse. This type of plan are similar to standard 401(k) plans, and let you make contributions as both the employer and the employee with pre-tax money. This offers more savings versus SEPs or IRAs; however, the increased savings potential may be offset by more constrained investment avenues. 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 are eligible to open and contribute to a solo 401(k).
Contribution Limits: As a self-employed individual with a solo 401(k) plan, you can make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your earned income from self-employment, 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.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your adjusted self-employment income, which is your net profit minus half of your self-employment tax and the employee contributions you made.
Total contributions are capped at $70,000, or $77,500 for individuals aged 50+ (as of 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 guarantees a pre-established payout to self-employed individuals upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but enables participants to determine the precise amount they'll have in retirement. This option is best suited for high-earning self-employed individuals who want to save a large amount for retirement and can commit to making larger deposits. Contributions offer tax-deferred growth, and withdrawals are taxable as income during retirement.
Eligibility: Any self-employed individual managing a one-person company or with a small staff of under five may establish an individual defined benefit plan, but it's generally suggested for individuals aged 50+ who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans are:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for those aged 50+)
- Organizations that already put in 3-4% with plans to contribute more
- Companies showing consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or boost savings within a short timeframe
Contribution Limits: The cap on contributions must be determined by an actuary determined by your income, age, and retirement goals. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in Tucson, AZ for Your Self-Employed Retirement Plan
Partnering with an advisor in Tucson, AZ focused on self-employed retirement strategies is an important asset for self-employed individuals. They bring the skills needed to navigate the complexities of retirement planning and design a personalized approach that reflects your aspirations. A financial advisor in Tucson, AZ will review your finances, determine how much risk you’re comfortable with, and guide you in selecting the best options about saving and investing for retirement. A key part of what we do for you includes:
- Help you choose a plan that suits your unique requirements
- Further adapt the plan to fit you personally even further
- Create a written plan that complies with IRS regulations
- Organize a trust plan to manage your assets
- Help you understand the plan's terms
- Track and fine-tune your plan when necessary
- Provide ongoing education and advice to help you navigate your retirement journey
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Tucson, AZ: Correct Capital's Process
Entrepreneurs in Tucson, AZ who lack the time, interest, or knowledge to oversee their own retirement planning on their own may end up overwhelmed when faced with their options. At Correct Capital, our Tucson, AZ financial advisors handle the bulk of your savings plan setup for you, and strive to ensure meeting your financial objectives as easy as possible for you. We will guide you in creating 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 help understand if our services align for you and your business. This short conversation helps us understand what you're looking for with no obligation or extensive time commitment on your part.
- Gather Information: Once we mutually decide to continue, we'll gather information, including your employee count, your existing financial picture, and your retirement goals. This enables us to craft a tailored approach that aligns with your goals.
- Review Your Plan: When we finalize a plan using the information you provide, we'll meet with you and review your plan step by step to make sure it's clear and understand how it best correlates to your needs.
- Implementation and Monitoring: After we agree on your plan, we'll implement the necessary steps so you can initiate your savings journey. As time goes on, we'll have regular meetings and review your strategy to ensure it stays suited to your needs.
Our Tucson, AZ financial advisors and retirement plan consultants are fiduciary advisors, who are obligated to they are committed by law and ethics to act in your best interest.
Other financial advisory services we offer in Tucson, AZ 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 Tucson, AZ
Your business isn't "just a business" to you, and your Tucson, AZ financial advisors must deliver more than simply sound financial advice. At Correct Capital, we take the time to get to know our clients and their businesses to provide tailored self-employed retirement plans. We offer all our Tucson, AZ clients 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, call Correct Capital today at 877-930-401k or contact us online.
