Retirement Planning for Entrepreneurs | Tacoma Financial Advisers

Entrepreneurs are used to taking risks, solving problems, and doing things their own way. But when it comes to retirement planning, many business owners find themselves in uncharted territory. Without a built-in employer 401(k) or corporate pension plan, the responsibility of funding retirement falls entirely on their own shoulders.

According to SCORE, 34% of small business owners don’t have any retirement savings plan in place. That’s a surprising stat—especially for people who are otherwise highly strategic and future-focused.

If you're self-employed or running your own business, here’s what you need to know to create a retirement strategy that works.

Why Retirement Planning Is Different for Entrepreneurs

When you work for a company, contributions to a 401(k) retirement plan or pension are often automated and partially matched. Entrepreneurs don’t get that luxury. Instead, your retirement income depends entirely on what you set aside, and how early you start.

Other common challenges include:

• Irregular income, making it harder to contribute consistently

• Reinvesting profits into the business instead of personal retirement

• Delaying planning until “the business takes off”

• Relying on selling the business as a retirement plan (which can be risky)

  
  

That’s why retirement planning for entrepreneurs often requires more flexibility, creativity, and discipline.

What Are Your Options?

There are several retirement savings strategies that work well for self-employed individuals:

• SEP IRA

A Simplified Employee Pension (SEP IRA) is easy to set up and lets you contribute up to 25% of your net earnings, up to an annual limit. It’s a solid choice if you have no employees.

• Solo 401(k)

If you’re a one-person business (or you and your spouse), a Solo 401(k) offers high contribution limits—up to $69,000 in 2024 if you're over 50—and the ability to borrow from your plan if needed.

• Traditional or Roth IRA

Even if you have a separate business account, opening a traditional or Roth IRA can offer tax advantages and flexibility.

You don’t need to be an expert in financial planning retirement products. But knowing what’s out there can help you build a foundation that fits your income patterns and goals.

Building Predictable Retirement Income

The next step is retirement income planning. Many entrepreneurs assume they’ll eventually sell their business and retire with the proceeds. But this strategy can be uncertain and depends on market timing and buyer demand.

That’s where a well-diversified portfolio and personal retirement accounts come in. When structured properly, they can provide steady income—separate from the ups and downs of your business or real estate.

A financial adviser can help you:

• Balance risk and growth potential

• Plan for taxes in retirement

• Align your investment strategy with your future income needs

  
  

At Penny Lane Wealth Management, our team works with entrepreneurs in Tacoma and beyond to help translate business success into long-term personal security.

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What Financial Advisor Should You Work With?

It’s normal to wonder: What financial advisor is right for me? Especially when you’re used to doing things solo.

Look for someone who understands business ownership, is experienced in financial planning and analysis, and offers personalized guidance. A good adviser won’t push products or overcomplicate things—they’ll help you make informed decisions without pressure.

If you're searching for financial planning near me in Washington, we offer collaborative support that puts your goals at the center of the strategy. Learn more about how we work here.

Curious Fact: Entrepreneurs Live Longer... If They Plan

A 2023 study published in Entrepreneurship Theory and Practice showed that self-employed individuals often report better well-being and life satisfaction than traditional employees. But that advantage fades if they experience financial stress—especially later in life.

In other words: owning your own business can be great for your health… unless you ignore your long-term planning.

Taking retirement seriously isn’t about giving up control. It’s about using that same entrepreneurial mindset to build something even more lasting—financial peace of mind.

If you’re also thinking about managing debt as part of your retirement strategy, there’s a helpful article on smart ways to manage debt while building wealth after 50. It offers practical tips that many entrepreneurs find useful as they balance multiple financial priorities. You can check it out here.

Planning Ahead Can Make All the Difference

The key takeaway? Starting early and having a clear plan tailored to your unique situation is crucial. Whether your income fluctuates or you’re reinvesting in your business, there are retirement options to help keep you on track. Engaging a financial adviser experienced with entrepreneurs can bring clarity and confidence as you build toward a secure retirement.