Self-employed retirement plans Tucson, AZ. The independence of running your own company in Tucson, AZ is one of the greatest advantages of having a self-directed career. Even so, this freedom can come with potential drawbacks, especially in terms of planning for retirement, as you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider understanding their retirement options. In addition to achieving a more comfortable retirement, seeking advice from a financial advisor in Tucson, AZ to set up your self-employed retirement plan can provide significant tax advantages that help both you and your business to thrive.
Few Tucson, AZ wealth management and retirement planning firms truly grasp the challenges faced by entrepreneurs as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (read more of our story here), and we take pride in helping businesses with their retirement planning needs. We recognize that your goals for your business and retirement aren’t limited to simple financial figures, and we strive to provide tailored solutions that reflect your objectives. Read on to discover 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.
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 deliver tangible benefits today. From flexible contributions to substantial tax savings, partnering with a financial advisor in Tucson, AZ enables you to design your retirement plan to suit 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 flexibility to modify how much you save:
- Customizable Contributions: Save extra during profitable years and reduce savings when your earnings dip, so that your plan fits your financial situation.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw tax-free later—a smart decision if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Retirement plans for self-employed individuals offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA shrink your tax liability, helping you keep more of your hard-earned money.
- Tax-Deferred Growth: You won't pay taxes on investment growth until you withdraw it, providing your money more time to accumulate.
- State-Specific Incentives: Based on your location, you may be eligible for additional tax breaks as a business owner. These state-level incentives can make these plans even more advantageous.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can take advantage of a credit of up to 50% of the first $2,000 put into a retirement plan, cutting down 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: Distributing your investments across varied asset classes like stocks and bonds can help reduce risk while helping to grow your retirement fund.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund prevents you from using your retirement funds during financial hardships and incurring penalties.
Plan for the Future of Your Tucson, AZ Business
Preparing for retirement enables you to prepare for what’s next with your Tucson, AZ business:
- Selling Your Business: If you’re planning to sell, retirement accounts like SEP IRAs and Solo 401(k)s remain your personal assets and are not part of the sale. These accounts ensure the reliable income you’ll need during retirement. Keep in mind that while selling your business results in a capital gain, deposits into these plans are capped at annual limits (e.g., as much as $7,000 for IRAs or up to $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Strategically planning your contributions helps lower the taxes you are required to pay when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings ensure financial security during the change. You might want to seek advice from a financial advisor with expertise in succession and retirement planning to minimize tax burdens on the sale.
With the best-fit retirement strategy, you manage 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 Tucson, AZ Now?
Time remains one of the most valuable resources when it comes to saving for retirement. Beginning sooner rather than later not only helps you grow a bigger financial cushion but also minimizes the pressure of saving aggressively in the future. This is why it is beneficial to start now:
The Cost of Waiting
Putting off saving for retirement may cause a substantial impact on the amount you’ll have when you stop working. The primary reason is compound interest—the financial principle where your investments generate earnings, and those returns, then, earn even more returns. The more time your money has to grow, the greater the impact of compounding.
Example: Taylor and Alex are both self-employed individuals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex begins contributing $5,000 annually at age 30.
- Taylor waits until age 40 but saves $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently can lead to significant growth. Consider this example showing the power of compounding:
- Starting at age 25: By investing $200 per month in a retirement plan with an projected return of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month leaves you with only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
Starting sooner, the lower your annual savings needs each year to reach your retirement goals.
*The numbers shown in this scenario are based on estimates generated with NerdWallet’s Compound Interest Calculator, based on a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. This information is intended as illustrative examples and cannot predict actual future outcomes. Your individual results may differ due to variables including market conditions, fees, and personal factors. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in Tucson, AZ, it is often the case that you focus more on reinvesting in your business rather than saving for retirement. That said, beginning a plan now gives you the chance to:
- Take advantage of tax-deferred growth or withdrawals without taxes down the road.
- Take advantage of adjustable savings that change with your earnings.
- Create a long-term safety measure that offers peace of mind, no matter how your business develops.
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 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 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 with its own benefits and trade-offs. A financial advisor will guide you to evaluate the benefits and drawbacks of each option and identify the one ideal for your needs. Generally speaking, your self-employed retirement plan options in Tucson, AZ are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that offer key tax perks. In a standard IRA, contributions are typically tax-deductible, and earnings grow without immediate taxation, but withdrawals in retirement are taxed as income. In contrast, Roth IRAs require contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are tax-free. In both cases, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, traditional and Roth IRAs are available to anyone with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs are capped at $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: SEP IRAs is a retirement plan that allows entrepreneurs to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a self-employed individual, you (the employee) are limited to contributions from the employer role 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. It's your choice whether to contribute a set monetary value or a percentage of wages to employee accounts. SEP IRAs may be ideal for companies with fluctuating revenue streams. Unlike other plans, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs function like traditional IRAs, where the contributions are tax-deferred and money withdrawn is subject to income tax.
Eligibility: Employers of any type, including self-employed individuals can open 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
As a self-employed person, the allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: Solo 401(k)s, also called 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. This type of plan 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 compared to SEPs or IRAs; however, the additional opportunities can be balanced by more restricted investment choices. 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 can set up 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, capped at the annual contribution limit. For 2025, the limits will be $23,500, or $31,000 if you are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) must not surpass 25% of your net earnings from self-employment, which is your net profit minus half of your self-employment tax and the elective deferrals you made.
The total contribution cannot exceed $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 delivers a fixed, predetermined benefit to entrepreneurs upon retirement. As opposed to defined contribution plans, this plan is not influenced by market performance, but allows self-employed individuals to know exactly how much they'll have in retirement. This plan is ideal for high-earning entrepreneurs who are focused on saving a large amount for retirement and are prepared to contribute substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income in retirement.
Eligibility: Any self-employed individual operating a solo business or with less than five employees may establish an individual defined benefit plan, but it's generally recommended for those over 50 who make $250,000 or more annually. In most cases, good candidates for defined benefit plans include:
- Business owners or partners who want to invest more than $70,000 (or $77,500 for those aged 50+)
- Businesses currently investing 3-4% but are open to increasing contributions
- Companies with proven consistent profit patterns
- Business leaders over age 40 who desire to "catch up" or increase their retirement contributions rapidly
Contribution Limits: The contribution limit is calculated by an actuary determined by your financial situation, age, and savings targets. Limits on contributions are adjusted each year.
The Importance of a Financial Advisor in Tucson, AZ for Your Self-Employed Retirement Plan
Partnering with an advisor in Tucson, AZ experienced with retirement plans for the self-employed is an invaluable resource for self-employed individuals. They offer the knowledge to assist navigate the complexities of retirement planning and design a personalized approach that aligns with your goals. An expert in your area will evaluate your financial situation, identify your risk preferences, and guide you in making informed decisions about saving and investing for retirement. Included in what we do for you involves:
- Assist in selecting a plan that best fits your needs and goals
- Tailor the plan to your needs even further
- Formalize a plan in writing as required by IRS rules
- Set up an asset trust plan
- Ensure you comprehend the plan's terms
- Review and modify your plan as needed
- Deliver continuous support and financial insights as you continue on the road to retirement
- Maximize what you receive in retirement by maximizing your social security benefits
Self-Employed Retirement Plans in Tucson, AZ: Correct Capital's Process
Self-employed individuals in Tucson, AZ who aren’t equipped with the time or understanding to handle their own retirement planning on their own may end up overwhelmed by their options. At Correct Capital, our Tucson, AZ financial advisors handle the majority of your savings plan setup for you, and strive to ensure meeting your financial objectives as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in a quick, four-step process:
- 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 initial call helps us understand what you're looking for with no obligation or extensive time commitment on your part.
- Gather Information: If we both decide to move forward, we'll gather information, including your employee count, your current financial situation, and your future objectives. This helps us create a personalized strategy that aligns with your goals.
- Review Your Plan: When we finalize a plan from the information you provide, we'll schedule a meeting and review your plan in detail to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll implement the necessary steps so you can begin contributing. Throughout our relationship, 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 serve as fiduciary advisors, who are obligated to they are committed by law and ethics to prioritize your needs above all else.
Other financial advisory services we offer in Tucson, AZ include:
- Family Wealth Planning
- Financial Planning for Business Owners
- Comprehensive Financial Planning
- Retirement Income Planning
- Investment Planning
- Retirement Financial Planning
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 401(k) Audit
Call Correct Capital for Your Self-Employed Retirement Plan in Tucson, AZ
To you, your business is more than "just a business", and your Tucson, AZ financial advisors should provide more than basic financial recommendations. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to provide personalized self-employed retirement plans. We offer all our Tucson, AZ 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.
