Self-employed retirement plans Washington, DC. The independence of being your own boss in Washington, DC is one of the best aspects of having a self-directed career. That said, this freedom often comes with certain challenges, especially in terms of retirement savings, since you don't have access to retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, although many should consider exploring their options. In addition to achieving a more secure retirement, seeking advice from a financial advisor in Washington, DC to establish your self-employed retirement plan offers significant tax advantages that allow your business to grow and succeed.
Few Washington, DC investment consulting and retirement planning firms understand the needs of entrepreneurs quite like Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and Correct Capital take pride in helping businesses with their retirement planning needs. We know that your professional and personal aspirations go far beyond basic numbers, and we strive to offer customized solutions aligned with your vision. Keep reading to learn more about your self-employed retirement plan options in Washington, DC, or call Correct Capital at 877-930-401k or contact us online to speak with a self-employed financial advisor in Washington, DC today.
Why Washington, DC Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals help prepare you for the future, they also deliver real benefits today. From flexible contributions to substantial tax savings, working with a financial advisor in Washington, DC enables you to design your retirement plan to suit your unique financial situation.
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 adjust how much you save:
- Customizable Contributions: Contribute more during high-income years and cut back when revenues are down, ensuring your plan fits your current income.
- Roth Options: Opting for a Roth Solo 401(k) lets you handle taxes upfront, so you can withdraw without tax penalties in the future—an advantageous choice if you believe your tax rate to be higher in the future.
Save Money on Taxes
Plans designed for the self-employed deliver powerful tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA lower your taxable income, so you can keep more of your hard-earned money.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to accumulate.
- State-Specific Incentives: In some states, you might access additional deductions as a sole proprietor. These regional incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants can apply for a credit of up to 50% of the first $2,000 contributed a retirement plan, helping to lower your tax bill even more.
Protect Your Savings With Smart Investments
Creating a stable future requires more than how much you save—it’s also linked to the way you invest:
- Diversified Portfolios: Spreading your investments across a mix of asset classes like stocks and bonds is a smart way to mitigate financial risk while helping to grow your savings.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund prevents you from using your retirement funds during financial hardships and risking extra costs.
Plan for the Future of Your Washington, DC Business
Preparing for retirement enables you to plan ahead for what’s next with your Washington, DC business:
- Selling Your Business: If you’re planning to sell, accounts such as SEP IRAs or Solo 401(k)s remain your personal assets and won’t be included in the sale. These accounts can provide the reliable income you’ll need in the future. It’s important to note that while selling your business results in a capital gain, deposits into these plans are subject to yearly maximums (e.g., a maximum of $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, factoring in catch-up contributions, according to plan rules).
- Minimizing Taxes: Using retirement contributions wisely can reduce the taxes you might face when you pass on your business.
- Succession Planning: If you’re passing the business on, your nest egg offer the funds you need during the change. You may also partner with a financial advisor with expertise in succession and retirement planning to reduce taxes during the sale.
With the proper savings strategy, you can take control of your financial future, cut down your tax obligations, and build a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Washington, DC Now?
Time is one of the most valuable resources for building your retirement fund. Beginning sooner rather than later not only helps you grow a larger nest egg but also lowers the pressure of saving aggressively in the future. This is why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement can have a major impact on the amount you’ll have when you reach retirement age. The biggest reason is compound interest—the powerful process where your investments earn returns, and those returns, in turn, generate even more returns. The longer your money has to grow, the more significant the benefit of this growth.
Example: Two individuals, Alex and Taylor are both self-employed individuals. They each aim to save $500,000 for retirement by age 65:
- Alex starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but puts away $7,500 annually to bridge the gap.
By age 65, with an assumption of 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Regular, modest investments contributed over time can lead to impressive growth. Here’s a simple scenario showing the power of compounding:
- 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: Investing 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 effort required each year to achieve your retirement goals.
*The figures provided in this example are based on estimates generated with NerdWallet’s Compound Interest Calculator, assuming a 7% annual return. Annual deposits were multiplied by the number of years to estimate total contributions. The scenarios provided are for illustrative purposes only and are not a promise of future results. Actual results may vary based on variables including market conditions, fees, and individual circumstances. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Washington, DC, it can be tempting to focus more on reinvesting in your business instead of saving for retirement. Even so, initiating a plan now gives you the chance to:
- Benefit from tax-free future growth or tax-free withdrawals later on.
- Benefit from adjustable savings that change with your earnings.
- Create a long-term safety measure that provides security, no matter how your business evolves.
The sooner you start, 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 managing your financial future and giving yourself the ability to concentrate on your objectives—both for your retirement years and your Washington, DC business.
Types of Self-Employed Retirement Plans
There are several retirement savings options designed for those working for themselves in Washington, DC, each with its own benefits and trade-offs. A financial advisor will guide you to evaluate the benefits and drawbacks of each choice and identify the one best suited for your circumstances. Generally speaking, your self-employed retirement plan options in Washington, DC consist of:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent financial tools for retirement that include specific tax advantages. In a conventional IRA, you can usually deduct your contributions from taxable income, and earnings grow without immediate taxation, but money taken out during retirement are taxable. In contrast, Roth IRA contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are not taxed. In both types of accounts, withdrawals don’t incur penalties as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are open to those with an earned income.
Contribution Limits: For 2025, annual contribution limits for IRAs remain $7,000, or $8,000 for those aged 50+.
Simplified Employee Pension Plan (SEP IRA)
Plan Overview: The Simplified Employee Pension IRA is a retirement plan that enables entrepreneurs to contribute a percentage of their net earnings. Contributions are strictly employer contributions an employer, so, as a independent business owner, you (the employee) would not be able to contribute more than the 25% you (the employer) already contributed. If you have employees, it's required 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 may be ideal for businesses that experience fluctuating revenue streams. Compared to other retirement options, SEP IRAs lack the high fees associated with starting or maintaining other plans.
SEPs work like traditional IRAs, where contributions are made with pre-tax money and retirement distributions are taxable.
Eligibility: Employers of any type, including self-employed individuals 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 allowable contribution 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 self-employed retirement plan intended for companies that have no employees or where the only employee is a spouse. This type of plan function similarly 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 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: Only 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 are 50 or older, or $34,750 for individuals aged 60-63 in 2025.
- Profit-sharing contributions (as an employer) are limited to 25% of your net earnings from self-employment, which is defined as net profit minus half of your self-employment tax and the elective deferrals you made.
Total contributions are capped at $70,000, or $77,500 for those aged 50 and older (as of 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 provides a pre-established payout to self-employed individuals upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but enables participants to determine the precise amount they'll receive in retirement. This option is ideal for wealthier professionals who want to save a large amount for retirement and can commit to making sizeable contributions. Contributions are tax deferred, and withdrawals are taxable as income in retirement.
Eligibility: Self-employed professionals running an owner-only business or employing fewer than five people are eligible to open an individual defined benefit plan, but it's most commonly advised for people above age 50 who earn at least $250,000 a year. 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 individuals 50 and older)
- Organizations that already put in 3-4% with plans to contribute more
- Companies with proven consistent profit patterns
- Entrepreneurs over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution must be determined by an actuary determined by your financial situation, age, and savings targets. Contribution limits are updated yearly.
The Importance of a Financial Advisor in Washington, DC for Your Self-Employed Retirement Plan
Working with a financial advisor in Washington, DC specialized in self-employed retirement plans can be an invaluable resource for entrepreneurs. They have the expertise to help navigate the complexities of retirement planning and craft a customized plan that matches your objectives. Your advisor in Washington, DC will assess where you stand financially, determine how much risk you’re comfortable with, and guide you in choosing wisely about saving and investing for retirement. Part of what we do for you involves:
- Help you choose a plan that best fits your needs and goals
- Tailor the plan to your specific situation even further
- Create a written plan as required by IRS rules
- Arrange a trust plan for assets
- Make sure you understand the plan's terms
- Track and fine-tune your plan to keep it aligned with your goals
- Deliver continuous support and financial insights throughout your retirement planning process
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Washington, DC: Correct Capital's Process
Self-employed individuals in Washington, DC who aren’t equipped with the time or understanding to oversee their retirement savings strategy on their own may end up overwhelmed by their choices. Through our team at Correct Capital, our Washington, DC financial advisors handle the majority of your retirement strategy for you, working to make meeting your retirement goals 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: It only takes 20 minutes, a member of our advisor team will assess if we're a good fit for you and your business. This brief introduction lets us learn about your needs with no obligation or significant effort on your part.
- Gather Information: Should we agree to proceed, we'll request information, including how many employees you have (if any), your existing financial picture, and your future objectives. This allows us to put together a custom plan suited specifically for your needs.
- 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 in detail to ensure you understand it and understand how it best correlates to your needs.
- Implementation and Monitoring: After we agree on your plan, we'll put everything in place so you can start saving. As time goes on, we'll meet with you and monitor your plan to make sure it remains aligned with your goals.
Our Washington, DC financial advisors and retirement plan consultants serve as fiduciary advisors, who are obligated to they are legally and ethically bound to do what's in your best interest.
Other financial advisory services we offer in Washington, DC include:
- 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
- High-Net-Worth Wealth Management
Call Correct Capital for Your Self-Employed Retirement Plan in Washington, DC
Your business isn't "just a business" to you, and your Washington, DC financial advisors must deliver more than basic financial recommendations. With Correct Capital, we focus on building a relationship with our clients and their businesses to provide tailored self-employed retirement plans. To every client in Washington, DC, we provide our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To take the first step on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
