ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Retirement Income Channel
  2. How to Meet Self-Employed Clients’ Retirement Needs
Retirement Income Channel
Share

How to Meet Self-Employed Clients' Retirement Needs

Karrie GordonMay 06, 2022
2022-05-06

Retirement planning is heavy on the minds of Americans in the wake of the COVID-19 pandemic and soaring inflation that is driving up consumer prices. While a large swathe of the population either doesn’t have a retirement plan or isn’t currently saving, the issue becomes even more convoluted for the self-employed who have no fallback to rely on when it comes to 401(k) plans or pensions.

Financial advisors play a crucial role in helping self-employed clients determine what kind of retirement strategy is best for their situation, based on their income levels and tax bracket, number of employees, benefits, and the costs to procure and maintain the plan, reports U.S. News and World Reports. With a variety of plan options out there, the choices can be daunting, and building a retirement plan together with a financial advisors can bring confidence and assurance to self-employed clients.

Traditional and Roth IRAs, though less common, are still a viable option if a client is self-employed. The key benefit is that contributions can be deducted come tax time, with annual contribution limits of $6,000 if a client is under 50 or $7,000 if they are 50 or older.

Another option is the solo 401(k), which is for a self-employed individual with no employees, although a spouse who works for the business can also contribute. In 2022, an employee can contribute up to $20,500 annually, plus an extra $6,500 if 50 or older for catch-up purposes; the total amount that an employer and employee can contribute is $61,000, plus the additional catch-up amount. What makes these plans attractive is that the self-employed individual counts as the employer and employee and can make contributions to the plan as both. These plans also cover Roth options.

Simplified employee pensions are similar to solo 401(k)s in that the contribution and compensation levels are roughly the same. A notable difference between the two plans, however, is that SEPs do not allow for catch-up contributions and also do not have Roth options. This plan can be used when a client has employees, but they must contribute an equal percentage of salary for every eligible employee.

The savings incentive match plan for employees (SIMPLE) IRA allows for contributions both from employees and the employer with max contributions of $14,000 in 2022, along with a $3,000 catch-up for those 50 and older. The employer generally has to make matching contributions up to 3% for all employees that contribute, or a fixed 2% regardless of employee contributions, but employee contributions can be written off as a business expense.

There are an assortment of retirement plan options for self-employed clients and for financial advisors looking to meet the income needs of their clients. Nationwide a variety of actively managed ETFs for advisors that cater to a range of investment exposures and strategies, including seeking a measure of downside protection within the major indexes.

For more news, information, and strategy, visit the Retirement Income Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X