Self-employed retirement plans Wichita, KS. The flexibility of being your own boss in Wichita, KS is one of the best aspects of having a self-directed career. Even so, this flexibility can come with certain challenges, particularly in terms of retirement savings, as you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off exploring their options. In addition to having a more comfortable retirement, working with a financial advisor in Wichita, KS to establish your self-employed retirement plan delivers significant tax advantages that help both you and your business to thrive.
Few Wichita, KS financial advisory and retirement planning firms truly grasp the challenges faced by small business owners better than Correct Capital. Our founder's father was a small business owner himself (read more of our story here), and Correct Capital are deeply experienced in helping businesses with their retirement planning needs. We recognize that your business and retirement aspirations extend well past basic numbers, and we work tirelessly to offer tailored solutions aligned with your vision. Continue exploring to find out about your self-employed retirement plan options in Wichita, KS, or give us a call at Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Wichita, KS today.
Why Wichita, KS Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also provide immediate benefits today. From flexible contributions to significant tax savings, working with a financial advisor in Wichita, KS allows you to design your retirement plan to fit your unique financial situation.
Flexibility That Fits Your Income
For those with fluctuating income over time, a plan like a SEP IRA or Solo 401(k) gives you the option to tailor how much you save:
- Customizable Contributions: Save extra during profitable years and cut back when revenues are down, so your plan fits your cash flow.
- Roth Options: Choosing a Roth Solo 401(k) lets you pay taxes on contributions now, allowing 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
Self-employed retirement plans offer valuable tax benefits:
- Tax-Deductible Contributions: Contributions to a SEP IRA reduce what you owe in taxes, helping you keep more of your earnings.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, giving your money more time to grow.
- State-Specific Incentives: Based on your location, you could qualify for extra 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 take advantage of a 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
Creating a stable future isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Spreading your investments across varied stocks, bonds, and alternatives can help minimize exposure to risk while still growing your nest egg.
- Emergency Back-Up: Supplementing your retirement savings with a financial buffer for your business ensures you don’t dipping into savings during tough times and facing tax penalties.
Plan for the Future of Your Wichita, KS Business
Preparing for retirement also helps you think through what’s next with your Wichita, KS 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 accounts ensure the reliable income you’ll need during retirement. It’s important to note that while the sale of a business usually creates a capital gain, retirement plan contributions are subject to yearly maximums (e.g., up to $7,000 for IRAs or up to $70,000 for Solo 401(k)s, including 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: For those winding down or handing over their business, your retirement accounts ensure financial security as you make this shift. You may also partner with a financial advisor who specializes in succession planning and retirement accounts to minimize tax burdens on the sale.
With the best-fit retirement strategy, you manage 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 Wichita, KS Now?
Time is one of the most important assets for building your retirement fund. Getting a head start not only lets you accumulate a larger nest egg but also minimizes the stress of saving aggressively in the future. The following are reasons why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement can have a substantial impact on the savings you’ll have when you stop working. The main reason is compound interest—the concept 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 effect of this growth.
Example: Two individuals, Alex and Taylor are both self-employed individuals. Their shared goal is to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor delays savings until age 40 but puts away $7,500 annually to make up for lost time.
By age 65, with an assumption of 7% annual return:
- Alex contributes $180,000 and accumulates $691,184.39*.
- Taylor invests $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Even modest contributions contributed over time often create significant growth. Here’s a simple scenario showing the effect of compounding:
- Starting at age 25: If you invest $200 per month in a retirement plan with an expected yearly growth rate of 7%, you’ll grow to approximately $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, all because of a 10-year delay.
Starting sooner, the less you need to save each year to reach your retirement goals.
*The numbers shown in this scenario represent estimates calculated using 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. This information is for illustrative purposes only and cannot predict actual future outcomes. Outcomes may change due to variables including market conditions, fees, and your unique situation. Always consult a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
If you’re self-employed in Wichita, KS, it might seem easier to focus more on reinvesting in your business rather than saving for retirement. Even so, beginning a plan now enables you to:
- Benefit from growth that is tax-deferred or penalty-free withdrawals later on.
- Enjoy adjustable savings that change with your income.
- Establish a long-term safety measure that offers peace of mind, no matter how your business evolves.
Getting started now, the less you’ll have 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 opportunity to turn your attention to your goals—both for your future retirement and your Wichita, KS business.
Types of Self-Employed Retirement Plans
A variety of retirement savings options available for those working for themselves in Wichita, KS, each providing its own advantages and considerations. A financial advisor is available to help you learn about the advantages and disadvantages of each choice and choose the one ideal for your needs. Generally speaking, your self-employed retirement plan options in Wichita, KS are:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that offer distinct tax benefits. In a standard IRA, contributions are typically tax-deductible, and returns grow free of current taxes, but withdrawals in retirement are taxed as income. In contrast, Roth IRAs require contributions using income already taxed, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both accounts, withdrawals are penalty-free provided you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, IRAs, including traditional and Roth options are open to those with taxable earnings.
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: SEP IRAs offers a way to save for retirement that enables entrepreneurs to save a percentage of their net business profits. Contributions are strictly employer contributions an employer, so, as a independent business owner, you (the employee) cannot make additional contributions above 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 works well for businesses that experience cycles of high revenue and low revenue. Unlike other plans, SEP IRAs are free of costly startup or administrative fees.
SEPs work like traditional IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed 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 contribution you can make 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 designed for companies that have no employees or where the only employee is a spouse. Solo 401(k)s are similar to traditional employer-managed 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This allows for more savings versus SEPs or IRAs; however, the additional opportunities often come with more constrained investment avenues. 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:
- Deferrals as an employee of up to 100% of your self-employed earnings, subject to 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.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your net self-employment income, which is calculated as net profits less half of your self-employment tax and the employee contributions you made.
Your combined contributions must not surpass $70,000, or $77,500 for those aged 50 and older (in 2025), $81,250 for those aged 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: Defined benefit plans is a retirement option that provides a fixed, predetermined benefit to business owners upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but allows self-employed individuals to know exactly how much they'll have in retirement. This strategy is recommended for higher-income self-employed individuals who want to save a substantial amount for retirement and are prepared to contribute larger deposits. Contributions grow tax-free until withdrawal, and withdrawals incur taxes 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 most commonly advised for people above age 50 who make $250,000 or more annually. Generally, good candidates for defined benefit plans are:
- Partners or owners 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 that have demonstrated consistent profit patterns
- Partners or owners over age 40 who aim to quickly build retirement savings or boost savings within a short timeframe
Contribution Limits: The maximum allowable contribution is calculated by an actuary determined by your earnings, age, and retirement objectives. Allowable contributions change annually.
The Importance of a Financial Advisor in Wichita, KS for Your Self-Employed Retirement Plan
Working with a financial advisor in Wichita, KS specialized in self-employed retirement plans serves as an invaluable resource for entrepreneurs. They bring the skills needed to understand the intricacies of saving for retirement and develop a personalized approach that reflects your aspirations. A financial advisor in Wichita, KS will assess where you stand financially, understand your risk tolerance, and help you in choosing wisely about saving and investing for retirement. Included in what we do for you includes:
- Guide you in choosing a plan that best fits your needs and goals
- Tailor the plan to fit you personally even further
- Formalize a plan in writing in accordance with IRS guidelines
- Arrange a trust plan for assets
- Help you understand the plan's terms
- Monitor and adjust your plan when necessary
- Deliver continuous support and financial insights as you continue on the road to retirement
- Boost your retirement earnings by maximizing your social security benefits
Self-Employed Retirement Plans in Wichita, KS: Correct Capital's Process
Wichita, KS business owners who don’t have the time or expertise to handle their own retirement planning independently can become overwhelmed by their choices. Through our team at Correct Capital, our Wichita, KS financial advisors handle the bulk of your retirement planning for you, to help make meeting your financial objectives as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: In just 20 minutes, a member of our advisor team can help understand if our services align for you and your business. This short conversation helps us get a sense of your goals 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 current financial situation, and your future objectives. This enables us to craft a tailored approach designed just for you.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll meet with you and discuss your plan thoroughly to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll set everything up so you can start saving. Throughout our relationship, we'll check in and track your progress to make sure it remains aligned with your goals.
Our Wichita, KS financial advisors and retirement plan consultants serve as fiduciary advisors, who are obligated to they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Wichita, KS 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 Wichita, KS
To you, your business is more than "just a business", and your Wichita, KS financial advisors should provide more than basic financial recommendations. With Correct Capital, we make it a priority to understand our clients and their businesses to deliver customized self-employed retirement plans. All our clients in Wichita, KS benefit from our I.O.U. promise: everything we recommend will be independent, objective, and unbiased. To begin on your self-employment retirement plan, reach out to Correct Capital at 877-930-401k or contact us online.
