Self-employed retirement plans Yonkers, NY. The freedom of running your own company in Yonkers, NY is one of the greatest advantages of working for yourself. Even so, this independence often comes with potential drawbacks, especially when it comes to planning for retirement, as you don't have the benefit of a workplace retirement plan. Only 13% of self-employed individuals have a workplace retirement plan, yet countless would be better off exploring their options. In addition to achieving a financially stable retirement, seeking advice from a financial advisor in Yonkers, NY to establish your self-employed retirement plan offers significant tax advantages that enable your business to grow and succeed.
Few Yonkers, NY investment consulting and retirement planning firms understand the needs of small business owners quite like Correct Capital. The father of our founder was a small business owner himself (check out our story here), and Correct Capital take pride in helping businesses with their retirement planning needs. We understand that your goals for your business and retirement aren’t limited to simple financial figures, and we work tirelessly to offer customized solutions that reflect your objectives. Keep reading to learn more about your self-employed retirement plan options in Yonkers, NY, or call Correct Capital at 877-930-401k or contact us online to speak with a entrepreneurial financial advisor in Yonkers, NY today.
Why Yonkers, NY Self-Employed Individuals Should Have a Retirement Plan
Retirement plans for self-employed individuals not only prepare you for the future, they also provide real benefits today. Offering flexibility in contributions to substantial tax savings, consulting a financial advisor in Yonkers, NY allows you to create your retirement plan to suit your specific needs.
Flexibility That Fits Your Income
When your earnings vary from year to year, a plan like a SEP IRA or Solo 401(k) offers the freedom to adjust how much you save:
- Customizable Contributions: Save extra during successful years and cut back when revenues are down, so your plan aligns with your financial situation.
- Roth Options: A Roth Solo 401(k) lets you pay taxes on contributions now, enabling you to withdraw without tax penalties in the future—an advantageous choice if you expect your tax rate is likely to rise in the future.
Save Money on Taxes
Self-employed retirement plans offer significant tax benefits:
- Tax-Deductible Contributions: Contributions to a Solo 401(k) reduce what you owe in taxes, helping you keep more of your earnings.
- Tax-Deferred Growth: Investments grow tax-free until withdrawal, giving your money more time to compound.
- State-Specific Incentives: Depending on where you live, you might access extra deductions as a self-employed individual. These regional incentives can make these plans even more valuable.
- Retirement Savings Contributions Credit (Saver’s Credit): Eligible individuals can apply for 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
Building a secure retirement requires more than how much you save—it’s also about how you invest:
- Diversified Portfolios: Allocating your investments across different stocks, bonds, and other assets is a smart way to minimize exposure to risk while still growing your savings.
- Emergency Back-Up: Supplementing your retirement savings with a business emergency fund helps you avoid dipping into savings during tough times and facing tax penalties.
Plan for the Future of Your Yonkers, NY Business
Preparing for retirement also helps you prepare for what’s next with your Yonkers, NY business:
- Selling Your Business: For those considering a sale, plans like SEP IRAs or Solo 401(k)s stay in your name and don’t transfer with the business. These savings ensure the reliable income you’ll need later on. It’s important to note that while selling a business often leads to a capital gain, deposits into these plans 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, based on plan compensation).
- Minimizing Taxes: Strategically planning your contributions minimizes the taxes you are required to pay when you sell your business.
- Succession Planning: Whether you’re transferring ownership, your nest egg ensure a stable foundation during the change. You may also partner with a financial advisor experienced in both succession and retirement strategies to reduce taxes associated with the transaction.
With the best-fit retirement strategy, you manage your financial future, cut down your tax obligations, and build a solid base for both your retirement and your business goals.
Why Start a Self-Employed Retirement Plan in Yonkers, NY Now?
There’s no denying that time is one of the most valuable assets when it comes to saving for retirement. Starting early not only allows you to build a larger nest egg but also minimizes the pressure of saving aggressively in the future. The following are reasons why it pays to take action now:
The Cost of Waiting
Delaying your retirement savings can have a major impact on the amount you’ll have when you reach retirement age. The main reason is compound interest—the concept 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 impact of compounding.
Example: Two individuals, 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 saves $7,500 annually to catch up.
By age 65, assuming 7% annual return:
- Alex puts in $180,000 and accumulates $691,184.39*.
- Taylor contributes $195,500 but only ends up with $474,367.78*.
How Early Contributions Grow
Even modest contributions invested steadily often create significant growth. Here’s a simple scenario showing the effect of consistent growth:
- Starting at age 25: Putting aside $200 per month in a retirement plan with an projected return of 7%, you’ll end up with $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 gap of over $260,000, all because of a 10-year delay.
The earlier you begin, the less you need to save each year to meet your retirement goals.
*The figures provided in this example are 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. The scenarios provided are for illustrative purposes only and are not a promise of future results. Actual results may vary due to elements like market conditions, fees, and your unique situation. Always consult a financial advisor for custom recommendations.
Take Control of Your Financial Future
If you’re self-employed in Yonkers, NY, it is often the case that you prioritize reinvesting in your business rather than saving for retirement. However, starting a plan now gives you the chance to:
- Benefit from tax-free future growth or penalty-free withdrawals down the road.
- Benefit from flexible contributions that align with your cash flow.
- Build a safety net that offers peace of mind, no matter how your business develops.
The sooner you start, the less you’ll be required to worry about making up for lost time later in life. Saving for retirement now means taking control of your financial future and creating for yourself the freedom to turn your attention to your goals—both for your golden years and your Yonkers, NY business.
Types of Self-Employed Retirement Plans
There are several retirement savings options open for self-employed individuals in Yonkers, NY, each with its own advantages and considerations. A financial advisor is available to help you understand the pros and cons of each plan and identify the one ideal for your needs. Generally speaking, your self-employed retirement plan options in Yonkers, NY include:
Traditional or Roth IRA
Plan Overview: IRAs, or Individual Retirement Accounts, are long-term savings plans that offer distinct tax benefits. In a conventional IRA, the money you contribute is often tax-deductible, and returns grow free of current taxes, but money taken out during retirement are subject to income tax. In contrast, Roth IRAs require contributions from post-tax earnings, but qualified withdrawals in retirement, including earnings, are not taxed. In both types of accounts, withdrawals are penalty-free as long as you are at least 59½.
Eligibility: While many retirement plans, such as 401(k)s, are tied to employment, both traditional and Roth IRAs are available to anyone with taxable earnings.
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: A Simplified Employee Pension (SEP) IRA is a retirement plan that allows those who are self-employed 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) would not be able to contribute more than 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 flat-dollar amount or a percentage of wages to employee accounts. This type of plan works well for entrepreneurs facing periods of inconsistent earnings. Compared to other retirement options, SEP IRAs don’t have the high fees associated with starting or maintaining other plans.
SEPs operate like conventional IRAs, where the contributions are tax-deferred 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 the lesser 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: The Solo 401(k), also called an Individual 401(k) or one-participant 401(k) plan, is a retirement savings plan intended for businesses without employees or when the sole employee is your spouse. Solo 401(k)s are similar to traditional employer-managed 401(k) plans, and enable contributions as both the employer and the employee with pre-tax money. This allows for more savings compared to SEPs or IRAs; however, the increased savings potential 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: Solo 401(k)s are available solely to 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 are allowed 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. 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 self-employment income, which is calculated as net profits less half of your self-employment tax and the elective deferrals you made.
Total contributions are capped at $70,000, or $77,500 for individuals aged 50+ (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 business owners upon retirement. Unlike defined contribution plans mentioned above, investment returns don’t affect the payout, but enables participants to determine the precise amount they'll have in retirement. This strategy is best suited for high-earning entrepreneurs who aim to accumulate a large amount for retirement and are prepared to contribute larger deposits. Contributions are tax deferred, and withdrawals are taxed as income during 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 generally recommended for people above age 50 who earn at least $250,000 a year. Typically, good candidates for defined benefit plans tend to be:
- Business owners or partners who aim to deposit more than $70,000 (or $77,500 for individuals 50 and older)
- Companies already contributing 3-4% and are willing to do more
- Companies that have demonstrated consistent profit patterns
- Partners or owners over age 40 who wish to accelerate savings or increase their retirement contributions rapidly
Contribution Limits: The maximum allowable contribution must be determined by an actuary determined by your earnings, age, and retirement objectives. Allowable contributions are updated yearly.
The Importance of a Financial Advisor in Yonkers, NY for Your Self-Employed Retirement Plan
Partnering with an advisor in Yonkers, NY focused on self-employed retirement strategies can be an invaluable resource for entrepreneurs. They offer the knowledge to assist understand the intricacies of saving for retirement and design a tailored strategy that aligns with your goals. An expert in your area will evaluate your financial situation, identify your risk preferences, and guide you in making informed decisions about saving and investing for retirement. Part of what we do for you features:
- Help you choose a plan that best fits your needs and goals
- Tailor the plan to your specific situation even further
- Formalize a plan in writing in accordance with IRS guidelines
- Organize a trust plan to manage your assets
- Make sure you understand the plan's terms
- Track and fine-tune your plan as needed
- Provide ongoing education and advice as you continue on the road to retirement
- Increase your retirement income by optimizing your social security benefits
Self-Employed Retirement Plans in Yonkers, NY: Correct Capital's Process
Entrepreneurs in Yonkers, NY who aren’t equipped with the time or understanding to manage their self-employed retirement plan independently often feel overwhelmed when faced with their choices. At Correct Capital, our Yonkers, NY financial advisors handle the majority of your savings plan setup for you, to help make meeting your retirement goals as easy as possible for you. We will guide you in creating your self-employed retirement plan in four simple steps:
- Schedule a Call: In just 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 get a sense of your goals with zero commitment or significant effort on your part.
- Gather Information: Once we mutually decide to continue, we'll request information, including whether you have employees, your existing financial picture, and your retirement goals. This allows us to put together a personalized strategy designed just for you.
- Review Your Plan: Once we've developed a plan using the information you provide, we'll meet with you and go over your plan thoroughly to ensure you understand it and understand how it best correlates to your needs.
- Implementation and Monitoring: Once we've agreed on your plan, we'll put everything in place so you can begin contributing. Over the course of our partnership, we'll have regular meetings and monitor your plan to keep it tailored to your evolving circumstances.
Our Yonkers, NY financial advisors and retirement plan consultants serve as fiduciary advisors, meaning they are legally and ethically bound to prioritize your needs above all else.
Other financial advisory services we offer in Yonkers, NY 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 Yonkers, NY
To you, your business is more than "just a business", and your Yonkers, NY 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 customized self-employed retirement plans. All our clients in Yonkers, NY 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.
