Self-employed retirement plans Winston-Salem, NC. The freedom of owning your own business in Winston-Salem, NC is one of the greatest advantages of having a self-directed career. However, this freedom sometimes brings with potential drawbacks, notably when it comes to building your retirement fund, as you don't have the benefit of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off looking into other possibilities. In addition to having a financially stable retirement, partnering with a financial advisor in Winston-Salem, NC to establish your self-employed retirement plan delivers significant tax advantages that help both you and your business to thrive.
Few Winston-Salem, NC wealth management and retirement planning firms are as attuned to the requirements of self-employed individuals as well as Correct Capital. Our company’s founder grew up with a father who was a small business owner himself (learn more about our story here), and we have a rich history of assisting business owners in their retirement planning needs. We know that your business and retirement aspirations go far beyond simple financial figures, and we work tirelessly to create personalized solutions aligned with your vision. Keep reading to learn more about your self-employed retirement plan options in Winston-Salem, NC, or give us a call at Correct Capital at 877-930-401k or contact us online to consult with a small business financial advisor in Winston-Salem, NC today.
Why Winston-Salem, NC Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also deliver real benefits today. With customizable contribution options to significant tax savings, consulting a financial advisor in Winston-Salem, NC enables you to design your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
If your income changes from year to year, a plan like a SEP IRA or Solo 401(k) gives you the flexibility to modify how much you save:
- Customizable Contributions: Set aside more during successful years and reduce savings when your earnings dip, so your plan fits your financial situation.
- Roth Options: Choosing a Roth Solo 401(k) lets you pay taxes on contributions now, allowing you to withdraw without tax penalties in the future—a wise move if you anticipate your tax rate will increase in the future.
Save Money on Taxes
Self-employed retirement plans provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) shrink your tax liability, helping you keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to grow.
- State-Specific Incentives: In some states, you might access extra deductions as a business owner. These regional incentives help make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Qualified participants 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
Creating a stable future requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Spreading your investments across different stocks, bonds, and alternatives serves to minimize exposure to risk while still growing your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a financial buffer for your business prevents you from using your retirement funds during challenging periods and facing tax penalties.
Plan for the Future of Your Winston-Salem, NC Business
Retirement planning can assist you think through what’s next with your Winston-Salem, NC business:
- Selling Your Business: If you’re planning to sell, plans like SEP IRAs or Solo 401(k)s remain yours and don’t transfer with the business. These plans can provide the financial stability you’ll need during retirement. It’s important to note that while selling a business often leads to a capital gain, contributions to retirement accounts are restricted by contribution limits (e.g., as much as $7,000 for IRAs or as much as $70,000 for Solo 401(k)s, including catch-up contributions, depending on plan details).
- Minimizing Taxes: Strategically planning your contributions 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 nest egg provide a stable foundation through the transition. You can also seek advice from a financial advisor who specializes in succession planning and retirement accounts to reduce taxes associated with the transaction.
With the proper savings strategy, you can take control of your financial future, cut down your tax obligations, and create a secure foundation for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Winston-Salem, NC Now?
Time is one of the most crucial assets in retirement planning. Beginning sooner rather than later not only allows you to build a bigger financial cushion but also minimizes the stress of playing catch-up as you get older. The following are reasons why it makes sense to begin today:
The Cost of Waiting
Delaying your retirement savings can have a major impact on the amount you’ll have when you retire. The biggest reason is compound interest—the concept where your investments grow, and those returns, in turn, generate even more returns. The more time your money has to grow, the greater the impact of this compounding process.
Example: Alex and Taylor are both entrepreneurs. Both of them want to save $500,000 for retirement by age 65:
- Alex starts saving $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 ends up with $691,184.39*.
- Taylor invests $195,500 but achieves a total of only $474,367.78*.
How Early Contributions Grow
Even modest contributions invested steadily may result in impressive 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 end up with $497,303.29* by age 65.
- Starting at age 35: Contributing the same $200 per month yields only $235,412.97* by age 65—a gap of over $260,000, all because of a 10-year delay.
Saving early, the lower your annual savings needs each year to achieve your retirement goals.
*The numbers shown in this scenario are based on estimates calculated using NerdWallet’s Compound Interest Calculator, based on a 7% annual return. The contributions were calculated by multiplying the annual deposit amount by the total number of years contributions were made. These examples are intended as illustrative examples and do not guarantee future performance. Outcomes may change due to factors such as market conditions, fees, and individual circumstances. We recommend consulting a financial advisor for custom recommendations.
Take Control of Your Financial Future
For self-employed individuals in Winston-Salem, NC, it can be tempting to prioritize reinvesting in your business over saving for retirement. However, starting a plan now allows you to:
- Leverage growth that is tax-deferred or penalty-free withdrawals in the future.
- Benefit from flexible contributions that align with your income.
- Build a financial cushion that offers peace of mind, no matter how your business evolves.
Getting started now, the less you’ll be required to worry about making up for lost time later in life. Building your retirement savings today means gaining control over your financial future and giving yourself the opportunity to focus on your dreams—both for your future retirement and your Winston-Salem, NC business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options available for entrepreneurs in Winston-Salem, NC, each providing its own benefits and trade-offs. A financial advisor will guide you to learn about the benefits and drawbacks of each choice and identify the one ideal for your unique situation. In most cases, your self-employed retirement plan options in Winston-Salem, NC are:
Traditional or Roth IRA
Plan Overview: Individual Retirement Accounts (IRAs), as explained here, represent retirement savings vehicles that offer specific tax advantages. In a traditional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but retirement distributions are taxed as income. In contrast, Roth IRAs require contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are exempt from taxes. In both accounts, withdrawals don’t incur penalties if you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are available to anyone with taxable earnings.
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: The Simplified Employee Pension IRA is a retirement plan that permits self-employed individuals to contribute a percentage of their net earnings. Contributions can only be made by an employer, so, as a sole proprietor, you (the employee) cannot make additional contributions above the 25% you (the employer) already contributed. If you have employees, you must contribute the same amount for them as you do for yourself. You may choose to contribute a flat-dollar amount or a percentage of wages to employee accounts. A SEP IRA works well for entrepreneurs facing periods of inconsistent earnings. In contrast to some alternatives, SEP IRAs are free of costly startup or administrative fees.
SEPs operate like standard IRAs, where you contribute pre-tax dollars and retirement distributions are taxable.
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 contribution you can make is based on a special calculation.
Solo 401(k)
Plan Overview: The Solo 401(k), also called an Individual 401(k) or one-participant 401(k) plan, is a savings option for the self-employed meant for businesses without employees or where the only employee is a spouse. These plans function similarly to employer-sponsored 401(k) plans, and enable contributions as both an employer and an employee with pre-tax money. This offers more savings versus SEPs or IRAs; however, the additional opportunities can be balanced by more constrained investment avenues. Using a solo 401(k), 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 may establish and contribute to a solo 401(k).
Contribution Limits: For self-employed individuals 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-employed earnings, 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 those who turn 60-63 in 2025.
- Profit-sharing contributions (as an employer) cannot exceed 25% of your net earnings from self-employment, which is defined as net profit minus 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 (as of 2025), $81,250 if you attain age 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: A defined benefit plan offers a structured retirement solution that guarantees a set amount to self-employed individuals upon retirement. As opposed to defined contribution plans, investment returns don’t affect the payout, but allows self-employed individuals to know the precise amount they'll receive in retirement. This strategy is best suited for higher-income self-employed individuals who aim to accumulate a large amount for retirement and are willing to make sizeable contributions. Contributions grow tax-free until withdrawal, and withdrawals incur taxes as income during retirement.
Eligibility: Any self-employed individual running an owner-only business or employing fewer than five people may establish an individual defined benefit plan, but it's generally advised for those over 50 who generate a minimum of $250,000 yearly. Generally, good candidates for defined benefit plans are:
- Business owners or partners who want to invest more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% with plans to contribute more
- Businesses showing consistent profit patterns
- Entrepreneurs over age 40 who desire to "catch up" or accelerate the retirement savings
Contribution Limits: The cap on contributions must be determined by an actuary using your earnings, age, and retirement objectives. Limits on contributions are updated yearly.
The Importance of a Financial Advisor in Winston-Salem, NC for Your Self-Employed Retirement Plan
A financial advisor in Winston-Salem, NC specialized in self-employed retirement plans can be an invaluable resource for self-employed individuals. They have the expertise to help guide you through the challenges of retirement planning and design a tailored strategy that matches your objectives. A financial advisor in Winston-Salem, NC will evaluate your financial situation, determine how much risk you’re comfortable with, and assist 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 specific situation even further
- Adopt a written plan as required by IRS rules
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Review and modify your plan when necessary
- Deliver continuous support and financial insights throughout your retirement planning process
- Maximize what you receive in retirement by making the most of your social security
Self-Employed Retirement Plans in Winston-Salem, NC: Correct Capital's Process
Winston-Salem, NC business owners who aren’t equipped with the time or understanding to oversee their retirement savings strategy themselves can become overwhelmed by their choices. With Correct Capital, our Winston-Salem, NC financial advisors handle the majority of your retirement strategy for you, and strive to ensure meeting your financial objectives as hassle-free as possible for you. We can help you get set 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 help understand if we're suited to your needs for you and your business. This brief introduction allows us to learn about your needs with zero commitment or major time investment on your part.
- Gather Information: Should we agree to proceed, we'll gather information, including how many employees you have (if any), your existing financial picture, and your future objectives. This enables us to craft a custom plan that aligns with your goals.
- Review Your Plan: Once we've developed a plan from the information you provide, we'll sit down with you and review your plan step by step to help you fully grasp it and explain its fit to your circumstances.
- Implementation and Monitoring: After we agree on your plan, we'll set everything up so you can initiate your savings journey. Over the course of our partnership, we'll meet with you and track your progress to ensure it stays suited to your needs.
Our Winston-Salem, NC financial advisors and retirement plan consultants are fiduciary advisors, meaning they are required by law and ethical standards to prioritize your needs above all else.
Other financial advisory services we offer in Winston-Salem, NC include:
- 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 Winston-Salem, NC
You don't see your business as "just a business", and your Winston-Salem, NC financial advisors need to offer more than just good financial guidance. With Correct Capital, we focus on building a relationship with our clients and their businesses to deliver customized self-employed retirement plans. To every client in Winston-Salem, NC, we provide our I.O.U. promise: all guidance we provide will be independent, objective, and unbiased. To get started on your self-employment retirement plan, contact Correct Capital now at 877-930-401k or contact us online.
