Self-employed retirement plans Virginia Beach, VA. The flexibility of being your own boss in Virginia Beach, VA is one of the greatest advantages of being self-employed. That said, this independence can come with a lack of security, particularly when it comes to planning for retirement, as you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off looking into other possibilities. In addition to having a financially stable retirement, working with a financial advisor in Virginia Beach, VA to create your self-employed retirement plan delivers significant tax advantages that allow both you and your business to thrive.
Few Virginia Beach, VA investment consulting and retirement planning firms truly grasp the challenges faced by self-employed individuals better than Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and our firm have a rich history of helping businesses with their retirement planning needs. We understand that your business and retirement aspirations go far beyond basic numbers, and we strive to offer tailored solutions aligned with your vision. Read on to discover about your self-employed retirement plan options in Virginia Beach, VA, or reach out to Correct Capital at 877-930-401k or contact us online to consult with a self-employed financial advisor in Virginia Beach, VA today.
Why Virginia Beach, VA Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver tangible benefits today. From flexible contributions to considerable tax savings, consulting a financial advisor in Virginia Beach, VA enables you to design your retirement plan to suit your individual circumstances.
Flexibility That Fits Your Income
When your earnings vary annually, a plan like a SEP IRA or Solo 401(k) provides the option to modify how much you save:
- Customizable Contributions: Save extra during profitable years and reduce savings when revenues are down, ensuring your plan works with your cash flow.
- Roth Options: A Roth Solo 401(k) lets you pay taxes on contributions now, so you can withdraw your savings tax-free down the road—an advantageous choice if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Retirement plans for self-employed individuals deliver significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, helping you 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 grow.
- State-Specific Incentives: Depending on where you live, you could qualify for extra deductions as a business owner. These regional incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Those who meet the requirements can take advantage of a credit of up to 50% of the first $2,000 put into a retirement plan, helping to lower 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 determined by your investment strategy:
- Diversified Portfolios: Spreading your investments across different asset classes like stocks and bonds can help reduce risk while still growing your nest egg.
- Emergency Back-Up: Combining your retirement strategy and a dedicated business safety net ensures you don’t dipping into savings during tough times and risking extra costs.
Plan for the Future of Your Virginia Beach, VA Business
Retirement planning also helps you prepare for what’s next with your Virginia Beach, VA business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain yours and are not part of the sale. These savings offer the financial stability you’ll need during retirement. It’s important to note that while selling a business often leads to a capital gain, retirement plan contributions are capped at annual limits (e.g., a maximum of $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 might face when you pass on your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg ensure a stable foundation during the change. You can also partner with a financial advisor who specializes in succession planning and retirement accounts to help with taxes during the sale.
With the best-fit retirement strategy, you gain control over your financial future, reduce your tax burden, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Virginia Beach, VA Now?
Time remains one of the most valuable resources for building your retirement fund. Starting early not only lets you accumulate a bigger financial cushion but also reduces the pressure of playing catch-up as you get older. The following are reasons why it pays to take action now:
The Cost of Waiting
Waiting to start your retirement fund could lead to a substantial impact on the savings you’ll have when you reach retirement age. The biggest reason is compound interest—the concept where your investments generate earnings, and those returns, in turn, generate even more returns. The more time your money has to grow, the greater the effect of this compounding process.
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 delays savings until age 40 but contributes $7,500 annually to bridge the gap.
By age 65, assuming 7% annual return:
- Alex invests $180,000 and ends up with $691,184.39*.
- Taylor puts in $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Small, consistent savings made consistently can lead to impressive growth. Here’s a simple scenario showing the impact of compounding:
- Starting at age 25: If you invest $200 per month in a retirement plan with an projected return of 7%, you’ll accumulate $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month would result in only $235,412.97* by age 65—a shortfall of over $260,000, just from a 10-year delay.
The earlier you begin, the less you need to save each year to achieve your retirement goals.
*These calculations are based on estimates derived from 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. The scenarios provided are intended as illustrative examples and do not guarantee future performance. Your individual results may differ depending on elements like market conditions, fees, and your unique situation. Always consult a financial advisor for personalized advice.
Take Control of Your Financial Future
If you’re self-employed in Virginia Beach, VA, it can be tempting to prioritize reinvesting in your business instead of saving for retirement. However, starting a plan now allows you to:
- Leverage growth that is tax-deferred or withdrawals without taxes in the future.
- Enjoy flexible contributions that align with your earnings.
- Establish a financial cushion that provides security, no matter how your business develops.
Getting started now, the less you’ll need to worry about playing catch-up later in life. Taking steps toward your retirement goals today means managing your financial future and creating for yourself the ability to turn your attention to your goals—both for your golden years and your Virginia Beach, VA business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for entrepreneurs in Virginia Beach, VA, each providing its own advantages and considerations. A financial advisor will guide you to evaluate the advantages and disadvantages of each plan and determine the one most suitable for your circumstances. Typically, your self-employed retirement plan options in Virginia Beach, VA include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are retirement savings vehicles that include key tax perks. In a traditional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are subject to income tax. In contrast, Roth IRAs require contributions from post-tax earnings, but eligible distributions during retirement, including earnings, are tax-free. In both cases, withdrawals don’t incur penalties provided you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are accessible for individuals 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: The Simplified Employee Pension IRA serves as a retirement savings option that permits 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) cannot make additional contributions above 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. You may choose to contribute a fixed dollar figure or a percentage of wages to employee accounts. A SEP IRA works well for companies with fluctuating revenue streams. Compared to other retirement options, SEP IRAs lack expensive setup or ongoing fees.
SEPs function like conventional IRAs, where you contribute pre-tax dollars and withdrawals are taxed as income.
Eligibility: Any employer, including the self-employed can set up a SEP.
Contribution Limits: Contribution limits for employees in a SEP IRA must not exceed:
- 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: Solo 401(k)s, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a self-employed retirement plan intended for businesses without employees or if the only employee is your spouse. This type of plan are similar to employer-sponsored 401(k) plans, and let you make contributions as both the employer and the employee with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the increased savings potential may be offset by more constrained investment avenues. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which share the same tax benefits as their IRA contribution counterparts.
Eligibility: Only business owners and their spouses are eligible to open and contribute to a solo 401(k).
Contribution Limits: If you are self-employed with a solo 401(k) plan, you have the ability to make two types of contributions:
- Elective 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.
- Profit-sharing contributions (as an employer) are limited to 25% of your net earnings from self-employment, which is calculated as net profits less half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $70,000, or $77,500 if you're over age 50 (for 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan is a retirement option that guarantees a set amount to business owners upon retirement. In contrast to the plans discussed earlier, investment returns don’t affect the payout, but lets individuals clearly understand exactly how much they'll get in retirement. This option is ideal for high-earning entrepreneurs who are focused on saving a significant sum for retirement and are willing to make larger deposits. Contributions are tax deferred, and withdrawals incur taxes as income during retirement.
Eligibility: Self-employed professionals managing a one-person company or employing fewer than five people are eligible to open an individual defined benefit plan, but it's typically suggested for individuals aged 50+ who generate a minimum of $250,000 yearly. Typically, good candidates for defined benefit plans include:
- Entrepreneurs who desire to contribute more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% and are willing to do more
- Businesses showing consistent profit patterns
- Entrepreneurs over age 40 who aim to quickly build retirement savings or increase their retirement contributions rapidly
Contribution Limits: The contribution limit requires calculation from an actuary using your earnings, age, and retirement objectives. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in Virginia Beach, VA for Your Self-Employed Retirement Plan
Partnering with an advisor in Virginia Beach, VA focused on self-employed retirement strategies serves as an invaluable resource for self-employed individuals. They bring the skills needed to guide you through the challenges of retirement planning and develop a personalized approach that matches your objectives. An expert in your area will review your finances, identify your risk preferences, and help you in making informed decisions about saving and investing for retirement. Part of what we do for you involves:
- Guide you in choosing a plan that suits your unique requirements
- Customize the plan to your specific situation even further
- Create a written plan in accordance with IRS guidelines
- Set up an asset trust plan
- Make sure you understand the plan's terms
- Monitor and adjust your plan as needed
- Offer continued financial education and guidance to help you navigate your retirement journey
- Increase your retirement income by making the most of your social security
Self-Employed Retirement Plans in Virginia Beach, VA: Correct Capital's Process
Virginia Beach, VA business owners who aren’t equipped with the time or understanding to oversee their self-employed retirement plan on their own can become overwhelmed when faced with their choices. Through our team at Correct Capital, our Virginia Beach, VA financial advisors take on the majority of your retirement planning for you, to help make meeting your future savings targets as straightforward as possible for you. We are here to assist you in setting up your self-employed retirement plan in just four steps:
- Schedule a Call: It only takes 20 minutes, a member of our advisor team can determine if we're suited to your needs for you and your business. This initial call helps us understand what you're looking for with zero commitment or extensive time commitment on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including how many employees you have (if any), your present financial standing, and your future objectives. This enables us to craft a custom plan that aligns with your goals.
- Review Your Plan: After we put together a plan using the information you provide, we'll sit down with you and go over your plan step by step to ensure you understand it and show how it aligns with your goals.
- Implementation and Monitoring: Once we've agreed on your plan, we'll implement the necessary steps so you can start saving. Over the course of our partnership, we'll have regular meetings and track your progress to make sure it remains aligned with your goals.
Our Virginia Beach, VA financial advisors and retirement plan consultants act as fiduciary advisors, who are obligated to they are legally and ethically bound to act in your best interest.
Other financial advisory services we offer in Virginia Beach, VA include:
- Independent Financial Advisor
- Roth Conversion
- Investment Management
- 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 Virginia Beach, VA
Your business isn't "just a business" to you, and your Virginia Beach, VA financial advisors need to offer more than basic financial recommendations. Correct Capital takes pride in, we make it a priority to understand our clients and their businesses to deliver customized self-employed retirement plans. We offer all our Virginia Beach, VA clients our I.O.U. promise: all of the advice you get from us will be independent, objective, and unbiased. To get started on your self-employment retirement plan, call Correct Capital today at 877-930-401k or contact us online.
