Self-employed retirement plans Winston-Salem, NC. The freedom of being your own boss in Winston-Salem, NC is one of the best aspects of being self-employed. Even so, this freedom can come with certain challenges, especially when it comes to building your retirement fund, since you don't have the option of retirement programs through an employer. Only 13% of self-employed individuals have a workplace retirement plan, but many would be better off exploring their options. In addition to achieving a more secure retirement, seeking advice from a financial advisor in Winston-Salem, NC to create your self-employed retirement plan offers significant tax advantages that allow your business to grow and succeed.
Few Winston-Salem, NC wealth management and retirement planning firms truly grasp the challenges faced by entrepreneurs as well as Correct Capital. The father of our founder was a small business owner himself (check out our story here), and our firm have a rich history of helping businesses with their retirement planning needs. We recognize that your business and retirement aspirations go far beyond just monetary concerns, and we strive to create tailored solutions that reflect your objectives. Read on to discover 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 speak with a self-employed 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 provide immediate benefits today. From flexible contributions to substantial tax savings, working with a financial advisor in Winston-Salem, NC helps you design your retirement plan to suit 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 flexibility to tailor how much you save:
- Customizable Contributions: Contribute more during high-income years and cut back when your earnings dip, so your plan aligns with your financial situation.
- Roth Options: Opting for a Roth Solo 401(k) lets you settle taxes at the time of contribution, enabling you to withdraw tax-free later—a wise move if you believe 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, so you can keep more of your income.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, which gives your money more time to grow.
- State-Specific Incentives: In some states, you may be eligible for extra tax breaks as a business owner. These regional incentives can make these plans even more advantageous.
- 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 isn’t only about how much you save—it’s also determined by your investment strategy:
- Diversified Portfolios: Spreading your investments across a mix of stocks, bonds, and alternatives is a smart way to mitigate financial risk while helping to grow your retirement fund.
- Emergency Back-Up: Combining your retirement strategy and a business emergency fund helps you avoid using your retirement funds during financial hardships and incurring penalties.
Plan for the Future of Your Winston-Salem, NC Business
Retirement planning can assist you prepare for what’s next with your Winston-Salem, NC business:
- Selling Your Business: When selling your business, plans like SEP IRAs or Solo 401(k)s remain yours and are not part of the sale. These plans can provide the steady income you’ll need in the future. It’s important to note that while selling a business often leads to a capital gain, deposits into these plans are capped at annual limits (e.g., as much as $7,000 for IRAs or a maximum of $70,000 for Solo 401(k)s, factoring in catch-up contributions, depending on plan details).
- Minimizing Taxes: Strategically planning your contributions can reduce the taxes you’ll owe when you transfer your business.
- Succession Planning: Whether you’re transferring ownership, your retirement accounts offer the funds you need through the transition. You might want to partner with a financial advisor with expertise in succession and retirement planning to reduce taxes on the sale.
With the best-fit retirement strategy, you manage your financial future, cut down your tax obligations, and create a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Winston-Salem, NC Now?
Time remains one of the most valuable resources for building your retirement fund. Starting early not only allows you to build a more substantial retirement fund but also minimizes the stress of playing catch-up as you get older. Here’s why it pays to take action now:
The Cost of Waiting
Putting off saving for retirement may cause a significant impact on the total you’ll have when you retire. The biggest reason is compound interest—the financial principle where your investments grow, and those returns, subsequently, generate even more returns. The longer 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 starts saving $5,000 annually at age 30.
- Taylor waits until age 40 but contributes $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 contributes $195,500 but accumulates just $474,367.78*.
How Early Contributions Grow
Small, consistent savings contributed over time may result in significant growth. Take a look at this scenario showing the power of consistent growth:
- Starting at age 25: By investing $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: Investing the same $200 per month would result in only $235,412.97* by age 65—a shortfall of over $260,000, all because of a 10-year delay.
Saving early, the less you need to save each year to reach your retirement goals.
*The figures provided in this example represent estimates generated with NerdWallet’s Compound Interest Calculator, with the assumption of a 7% annual return. These calculations involved multiplying yearly deposits by the years contributed. These examples are for illustrative purposes only and are not a promise of future results. Your individual results may differ depending on factors such as market conditions, fees, and your unique situation. Be sure to speak with a financial advisor for custom recommendations.
Take Control of Your Financial Future
As a self-employed person in Winston-Salem, NC, it might seem easier to focus more on reinvesting in your business over saving for retirement. Even so, starting a plan now gives you the chance to:
- Benefit from tax-free future growth or withdrawals without taxes down the road.
- Enjoy contribution flexibility that change with your income.
- Create a financial cushion that provides security, no matter how your business evolves.
Starting early, the less you’ll need to worry about catching up later in life. Taking steps toward your retirement goals today means gaining control over your financial future and creating for 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
A variety of retirement savings options open for self-employed individuals in Winston-Salem, NC, each providing its own benefits and trade-offs. A financial advisor can help you evaluate the advantages and disadvantages of each choice and determine the one best suited for your unique situation. Generally speaking, your self-employed retirement plan options in Winston-Salem, NC consist of:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are financial tools for retirement that offer key tax perks. In a standard IRA, you can usually deduct your contributions from taxable income, and investment earnings grow tax-deferred, but retirement distributions are taxed as income. In contrast, with Roth IRAs, you contribute from post-tax earnings, but retirement withdrawals that qualify, including earnings, are exempt from taxes. In both accounts, withdrawals come without penalties as long as you are at least 59½.
Eligibility: Unlike plans linked to your job, IRAs, including traditional and Roth options are available to anyone with a source of income.
Contribution Limits: For 2025, annual contribution limits for IRAs are set at $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 offers a way to save for retirement that allows 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) allocate. If you have employees, you are obligated to contribute the same amount for them as you do for yourself. You may choose to contribute a set monetary value or a percentage of wages to employee accounts. This type of plan may be ideal for businesses that experience periods of inconsistent earnings. Compared to other retirement options, SEP IRAs are free of expensive setup or ongoing fees.
SEPs work like traditional IRAs, where you contribute pre-tax dollars and money withdrawn is subject to income tax.
Eligibility: Any employer, including the self-employed can open 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 allowable contribution is based on a special calculation.
Solo 401(k)
Plan Overview: A Solo 401(k) plan, sometimes referred to as an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan designed for businesses with no employees or where the only employee is a spouse. These plans function similarly to traditional employer-managed 401(k) plans, and let you make contributions as both an employee or an employer with pre-tax money. This offers more savings versus SEPs or IRAs; however, the extra savings options may be offset by more limited investment options. 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: 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 can make two types of contributions:
- Elective deferrals (as an employee) of up to 100% of your self-employed earnings, capped at 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.
- Employer profit-sharing contributions (as an employer) cannot exceed 25% of your net self-employment income, which is your net profit minus half of your self-employment tax and the deferrals you made.
The total contribution cannot exceed $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: A defined benefit plan offers a structured retirement solution that delivers a pre-established payout to entrepreneurs upon retirement. Unlike defined contribution plans mentioned above, a defined benefit plan doesn't fluctuate based on investment returns, but allows self-employed individuals to know exactly how much they'll have in retirement. This option is recommended for wealthier professionals who want to save a significant sum for retirement and can commit to making substantial contributions. Contributions grow tax-free until withdrawal, and withdrawals are taxable as income in retirement.
Eligibility: Any self-employed individual operating a solo business or with less than five employees can open an individual defined benefit plan, but it's generally recommended for people above age 50 who make $250,000 or more annually. Typically, good candidates for defined benefit plans include:
- Business owners or partners who desire to contribute more than $70,000 (or $77,500 for individuals 50 and older)
- Organizations that already put in 3-4% and are willing to do more
- Organizations showing consistent profit patterns
- Business leaders over age 40 who wish to accelerate savings or accelerate the retirement savings
Contribution Limits: The contribution limit requires calculation from an actuary determined by your financial situation, age, and savings targets. Contribution limits 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 focused on self-employed retirement strategies can be an invaluable resource for those working for themselves. They bring the skills needed to understand the intricacies of saving for retirement and craft a customized plan that reflects your aspirations. A financial advisor in Winston-Salem, NC will evaluate your financial situation, understand your risk tolerance, and guide you in selecting the best options about saving and investing for retirement. Included in what we do for you includes:
- Guide you in choosing a plan that aligns with your objectives and circumstances
- Customize the plan to your specific situation even further
- Adopt a written plan that complies with IRS regulations
- Arrange a trust plan for assets
- Ensure you comprehend the plan's terms
- Track and fine-tune your plan when necessary
- Offer continued financial education and guidance to help you navigate your retirement journey
- Maximize what you receive in retirement by optimizing your social security benefits
Self-Employed Retirement Plans in Winston-Salem, NC: Correct Capital's Process
Self-employed individuals in Winston-Salem, NC who don’t have the time or expertise to manage their own retirement planning on their own may end up overwhelmed when faced with their options. Through our team at Correct Capital, our Winston-Salem, NC financial advisors manage the bulk of your savings plan setup for you, and strive to ensure meeting your future savings targets as straightforward as possible for you. We will guide you in creating your self-employed retirement plan in just four steps:
- Schedule a Call: A quick 20-minute call is all it takes, a member of our advisor team can determine if we're suited to your needs for you and your business. This short conversation helps us understand what you're looking for with no pressure or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll ask for information, including whether you have employees, your existing financial picture, and your future objectives. This enables us to craft a custom plan suited specifically for your needs.
- Review Your Plan: When we finalize a plan from the information you provide, we'll meet with you and go over your plan step by step to ensure you understand it and explain its fit to your circumstances.
- Implementation and Monitoring: When we finalize on your plan, we'll implement the necessary steps so you can begin contributing. Throughout our relationship, we'll meet with you and review your strategy to keep it tailored to your evolving circumstances.
Our Winston-Salem, NC financial advisors and retirement plan consultants serve as fiduciary advisors, meaning they are legally and ethically bound to do what's in your best interest.
Other financial advisory services we offer in Winston-Salem, NC 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 Winston-Salem, NC
You don't see your business as "just a business", and your Winston-Salem, NC financial advisors should provide more than just good financial guidance. With Correct Capital, we make it a priority to understand our clients and their businesses to create personalized 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.
