Self-employed retirement plans Winston-Salem, NC. The independence of owning your own business in Winston-Salem, NC is one of the best aspects of working for yourself. Even so, this freedom sometimes brings with certain challenges, notably regarding planning for retirement, because you don't have the option of employer-sponsored retirement plans. Only 13% of self-employed individuals have a workplace retirement plan, although many would be better off exploring their options. In addition to enjoying a more comfortable retirement, seeking advice from a financial advisor in Winston-Salem, NC to set up your self-employed retirement plan can provide significant tax advantages that help both you and your business to thrive.
Few Winston-Salem, NC financial advisory and retirement planning firms understand the needs of entrepreneurs as well as Correct Capital. The father of our founder was a small business owner himself (learn more about our story here), and Correct Capital are deeply experienced in helping businesses with their retirement planning needs. We recognize that your professional and personal aspirations aren’t limited to just monetary concerns, and we strive to provide customized solutions aligned with your vision. Keep reading to learn more about your self-employed retirement plan options in Winston-Salem, NC, or call Correct Capital at 877-930-401k or contact us online to talk to a self-employed financial advisor in Winston-Salem, NC today.
Schedule a Meeting With an Advisor Today
Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
Schedule a 15-Minute Introductory Call
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 tangible benefits today. Offering flexibility in contributions to significant tax savings, working with a financial advisor in Winston-Salem, NC helps you customize your retirement plan to align with your specific needs.
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 adjust how much you save:
- Customizable Contributions: Save extra during high-income years and reduce savings when income is lower, so your plan works with your current income.
- Roth Options: A Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling 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 provide significant tax benefits:
- Tax-Deductible Contributions: Contributions to a SIMPLE IRA reduce what you owe in taxes, so you can keep more of your hard-earned money.
- Tax-Deferred Growth: Your savings grow untaxed until withdrawn, giving your money more time to accumulate.
- State-Specific Incentives: In some states, you may be eligible for extra deductions as a self-employed individual. These local incentives make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can take advantage of a 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
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 varied stocks, bonds, and other assets is a smart way to minimize exposure to risk while continuing to build your savings.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund ensures you don’t tapping into your nest egg during tough times and incurring penalties.
Plan for the Future of Your Winston-Salem, NC Business
Preparing for retirement enables you to plan ahead for what’s next with your Winston-Salem, NC business:
- Selling Your Business: For those considering a sale, retirement accounts like SEP IRAs and Solo 401(k)s stay in your name and are not part of the sale. These accounts ensure the financial stability you’ll need during retirement. Keep in mind that while selling your business results in a capital gain, retirement plan contributions are restricted by contribution limits (e.g., a maximum of $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 minimizes the taxes you’ll owe when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your retirement savings ensure financial security through the transition. You may also work with a financial advisor with expertise in succession and retirement planning to help with taxes during the sale.
With the proper savings strategy, you gain control over your financial future, reduce your tax burden, and establish 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 factors when it comes to saving for retirement. Getting a head start not only lets you accumulate a bigger financial cushion but also reduces the pressure of playing catch-up as you get older. Here’s why it makes sense to begin today:
The Cost of Waiting
Putting off saving for retirement can have a major impact on the total you’ll have when you stop working. The main reason is compound interest—the financial principle where your investments earn returns, and those returns, in turn, earn even more returns. The more time your money has to grow, the greater the effect of this growth.
Example: Alex and Taylor are both entrepreneurs. They each aim to save $500,000 for retirement by age 65:
- Alex initiates savings of $5,000 annually at age 30.
- Taylor waits until age 40 but puts away $7,500 annually to catch up.
By age 65, with an assumption of 7% annual return:
- Alex puts in $180,000 and ends up with $691,184.39*.
- Taylor invests $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Even modest contributions invested steadily can lead to substantial growth. Here’s a simple scenario showing the power of compound interest:
- Starting at age 25: By investing $200 per month in a retirement plan with an average annual return of 7%, you’ll grow to approximately $497,303.29* by age 65.
- Starting at age 35: Investing the same $200 per month yields only $235,412.97* by age 65—a gap of over $260,000, just from a 10-year delay.
Starting sooner, the less effort required each year to meet your retirement goals.
*The numbers shown in this scenario are estimates calculated using NerdWallet’s Compound Interest Calculator, assuming 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 meant to provide general guidance and cannot predict actual future outcomes. Outcomes may change due to variables including market conditions, fees, and personal factors. We recommend consulting a financial advisor for guidance tailored to your needs.
Take Control of Your Financial Future
For self-employed individuals in Winston-Salem, NC, it might seem easier to put more emphasis on reinvesting in your business instead of saving for retirement. Even so, initiating a plan now allows you to:
- Benefit from tax-deferred growth or penalty-free withdrawals later on.
- Benefit from contribution flexibility that adapt to your income.
- Create a financial cushion that ensures stability, no matter how your business evolves.
Starting early, the less you’ll be required to worry about catching up later in life. Taking steps toward your retirement goals today means gaining control over your financial future and giving yourself the ability to turn your attention to your goals—both for your future retirement and your Winston-Salem, NC business.
Types of Self-Employed Retirement Plans
Multiple retirement savings options open for entrepreneurs in Winston-Salem, NC, each offering its own benefits and trade-offs. A financial advisor will guide you to learn about the benefits and drawbacks of each plan and identify the one ideal for your circumstances. Generally speaking, your self-employed retirement plan options in Winston-Salem, NC include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that provide specific tax advantages. In a conventional IRA, you can usually deduct your contributions from taxable income, and returns grow free of current taxes, but retirement distributions are subject to income tax. In contrast, Roth IRAs require contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are tax-free. In both accounts, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: Unlike 401(k)s, which are employer-sponsored, IRAs, including traditional and Roth options are available to anyone 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: A Simplified Employee Pension (SEP) IRA serves as a retirement savings option that permits entrepreneurs to set aside a portion of their self-employment income. Contributions are strictly employer contributions an employer, so, as a independent business owner, you (the employee) would not be able to contribute above the 25% you (the employer) allocate. 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 set monetary value or a percentage of wages to employee accounts. A SEP IRA may be ideal for companies with fluctuating revenue streams. Unlike other plans, SEP IRAs don’t have expensive setup or ongoing fees.
SEPs work like traditional IRAs, where contributions are made with pre-tax money and retirement distributions are taxable.
Eligibility: Any employer, including the self-employed can set up 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
For self-employed individuals, the allowable contribution 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 companies that have no employees or if the only employee is your spouse. These plans operate much like employer-sponsored 401(k) plans, and allow you to contribute as both an employee or an employer with pre-tax money. This provides more savings versus SEPs or IRAs; however, the increased savings potential often come with more constrained investment avenues. In a solo 401(k) plan, you can make either traditional or Roth deferrals, which have the same tax benefits as their IRA contribution counterparts.
Eligibility: This plan is exclusively for 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:
- 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 if you're over 50, or $34,750 for individuals aged 60-63 in 2025.
- Contributions as an employer (as an employer) are limited to 25% of your adjusted self-employment income, which is defined as 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+ (for 2025), $81,250 for individuals turning 60-63 in 2025.
Individual Defined Benefit Plan
Plan Overview: The defined benefit plan offers a structured retirement solution that provides a set amount to self-employed individuals upon retirement. Unlike defined contribution plans mentioned above, this plan is not influenced by market performance, but allows self-employed individuals to know the precise amount they'll get in retirement. This option is best suited for higher-income professionals who aim to accumulate a large amount for retirement and are willing to make larger deposits. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income during retirement.
Eligibility: Self-employed professionals operating a solo business or employing fewer than five people may establish an individual defined benefit plan, but it's most commonly advised for those over 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans include:
- Entrepreneurs who want to invest more than $70,000 (or $77,500 if over age 50)
- Companies already contributing 3-4% and are willing to do more
- Organizations that have demonstrated consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The cap on contributions is calculated by an actuary using your financial situation, age, and savings targets. Limits on contributions change annually.
The Importance of a Financial Advisor in Winston-Salem, NC for Your Self-Employed Retirement Plan
Working with a financial advisor in Winston-Salem, NC focused on self-employed retirement strategies serves as an essential partner for entrepreneurs. They offer the knowledge to assist understand the intricacies of saving for retirement and craft a customized plan that reflects your aspirations. An expert in your area will review your finances, determine how much risk you’re comfortable with, and assist you in making informed decisions about saving and investing for retirement. A key part of what we do for you includes:
- Guide you in choosing a plan that best fits your needs and goals
- Customize the plan to your specific situation even further
- Adopt a written plan as required by IRS rules
- Organize a trust plan to manage your assets
- Help you understand the plan's terms
- Track and fine-tune your plan as needed
- 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 Winston-Salem, NC: Correct Capital's Process
Self-employed individuals in Winston-Salem, NC who lack the time, interest, or knowledge to oversee their own retirement planning on their own may end up overwhelmed as they look at their choices. Through our team at Correct Capital, our Winston-Salem, NC financial advisors take on the lion's share of your retirement planning for you, to help make meeting your retirement goals 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 short conversation allows us to get a sense of your goals with no obligation or extensive time commitment 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 retirement goals. This helps us create a custom plan 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 step by step to make sure it's clear and understand how it best correlates to your needs.
- Implementation and Monitoring: When we finalize on your plan, we'll implement the necessary steps so you can start saving. As time goes on, we'll meet with you and monitor your plan to ensure it stays suited to your needs.
Our Winston-Salem, NC financial advisors and retirement plan consultants serve as fiduciary advisors, who are obligated to they are committed by law and ethics to do what's in your best interest.
Other financial advisory services we offer in Winston-Salem, NC include:
- 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 create tailored self-employed retirement plans. To every client in Winston-Salem, NC, we provide 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.
