Charitable Giving: How Small Business Owners Can Make a Big Impact

Charitable giving is an excellent way for businesses to help others while taking advantage of additional tax breaks. Billions of dollars are given each year in the U.S. to a wide range of charities providing valuable community services. While large corporations may be responsible for a large portion of the donated funds, small businesses also make a large impact with their contributions.

3 Ways Small Businesses Can Donate to Charities

While cash donations are one of the most common ways to give to charities, small businesses may also provide support in other ways.

1. Volunteering

Instead of donating money, your business will be able to make an impact by donating their time to a local charity, such as a soup kitchen or homeless shelter.1

2. Host a Charity Drive

If you see a need in their local community, consider helping by starting a drive to collect needed items, such as a holiday toy drive or canned food drive.1

3. Take Advantage of Local Sponsorship Opportunities

Local youth organizations and groups are often looking for sponsorship. Consider sponsoring a sports team or local community event. You will also get a little advertising and community goodwill out of your involvement.1

Tips for Small Business Giving

While there are no set rules on how or how much you should give to charity, below are a few helpful tips to help your business get started.

Find a Cause That is Meaningful to Your Company or Employees

All types of charities are looking for support, which means it is easy to find one that resonates with your business culture and employees. This way, you will be more personally connected to your contribution, which will mean something to you and your employees.2

Research Charities You Are Interested In

Take some time to learn about the different charities you may wish to contribute to. Through some research, you will be able to find out how much of the contributions go into their programming, what kind of services they provide to the community, and the impact your donation may have. This will give you a clearer picture of how you are helping through your contribution.2

Build a Relationship With Your Chosen Charities

Even if you only contribute to your charity once a year, you want to stay connected and find out other ways you are able to assist throughout the year. This is a great way to stay connected with your community, network, and build relationships with other businesses.2

Get Your Employees Involved

Have your employees volunteer with the charity or offer contribution matching for employees who donate independently. This will help your employees connect with the charity and provide the charity with much-needed assistance throughout the year.2

It is important to remember that every dollar counts for charities, so even if your business only contributes a small amount, it will still be making a huge impact on the community.













Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05377994


1 “Small Business Guide to Charitable Giving and Tax Deductions,” Business News Daily,

2 “Six Best Practices For Small Businesses To Give Charitably,” Forbes,

Your Financial Advisor Succession Plan

Your Financial Advisor Business Succession Plan

As a business owner and financial advisor, it’s essential to start planning your retirement and thinking about living a work-optional lifestyle while caring for your clients and family. Your financial advisor business succession plan is critical to leaving a positive legacy.

By Brian Bohnsack, AIF®, Senior Vice President, Financial Advisor, Managing Principal Elk River Office

Brian attained a bachelor’s degree in accounting, earned his FINRA series 7 and 66 securities registrations through LPL Financial, and carries life and health insurance licenses. Brian has a wide range of experience in financial services, accounting, and management. He loves working directly with his clients to help them learn more about their goals and dreams and educate them about financial planning and investing.

Succession Planning for Financial Advisors

For many financial professionals, the thought off handing off your business can seem daunting. You might be thinking that the easiest thing to do is work with a private equity firm. But there are other options.

In this article, I’ll talk cover the basics of succession planning for financial advisors and how you can create a plan that works for you and your clients. 

The Four Key Reasons Succession Planning is Critical

Continuity of Client Relationships: Clients build strong relationships with their financial planners, based on trust, understanding, and shared financial goals. A well-executed succession plan ensures that these relationships remain intact even when the primary planner retires or is no longer able to work.

Business Sustainability: A financial planning practice is not just a job; it’s a business. A succession plan helps maintain the health of the business by transferring leadership and responsibility smoothly. Without a plan, the sudden absence of the planner could lead to confusion, client dissatisfaction, and financial instability.

Protecting the Planner’s Legacy: Financial planners invest years in building their reputation, expertise, and client base. A thoughtful succession plan safeguards this hard-earned legacy by ensuring that the practice’s values, philosophies, and standards continue to guide its future.

Talent Development: Succession planning encourages the professional growth of potential successors. By identifying and nurturing talent within the practice, financial planners contribute to the development of skilled professionals who can carry forward the practice’s mission

The State of Succession Planning Among Financial Advisors

The Average Age of Financial Advisors and the Growing Need for Succession Planning

The average age of financial advisors is steadily increasing, making succession planning more critical than ever. According to a J.D. Power study, the average age of a financial advisor is about 55 years old. Not only that, about one-fifth of industry professionals is 65 or older. 

This demographic reality points to a growing need for younger advisors to step in as older professionals retire. The problem is exacerbated by the lack of formal succession plans in many advisory firms.

Why Most Financial Advisors Lack a Formal Succession Plan

Most financial advisors lack a formal succession plan due to the perceived complexity of the process and a focus on short-term goals. They may feel that their practice will simply sell itself when the time comes or may underestimate the time needed to develop a robust plan. Additionally, some advisors may have difficulty letting go of the business they’ve built. However, lacking a succession plan puts the advisor, clients, and the firm at significant risk.

We don’t want you to be in that boat. 

At 360 Financial, we want to make sure that you’re able to have a smooth transition from working in a profession that you love, to retiring and enjoying the next chapter.

Succession Options for Financial Advisors and Independent Advisory Firms

An Overview of Succession Planning Options for Financial Advisors and Small Firms

Various options exist for financial advisors contemplating succession, including internal succession, selling to an external party, or merging with another firm. Each of these options comes with its own set of complexities and benefits. 

Internal succession is often favored for its continuity, while external sales may offer a quicker exit and potentially higher valuations. Mergers can offer scale and resources but require careful integration.

Succession 360 is your customized plan to protect your life’s work, your clients, your team and family. Leverage your assets today, monetize your business for the future, and choose your timeline rather than be handcuffed to someone else’s.

The ideal succession is about protection, focus, and alignment with your life goals. Let’s discuss the timeline, income and cash flow to meet your financial needs. Then we’ll customize a plan that works best for you, your family, and your clients.

Considering Structure and Dynamics of a Financial Advisory Business with Succession Planning

When planning for succession, the structure and dynamics of your business play an essential role. The size of the firm, the skill set of existing employees, and your client base are all critical considerations. Whether you are a sole practitioner or part of a larger firm, different models will apply. Understanding these variables will help you tailor your succession plan more effectively.

How to Craft an Effective Succession Plan in 7 Steps

1) Identify Potential Successors

 Begin by assessing the individuals within the practice who have the potential to step into leadership roles. Consider their skills, experience, commitment, and alignment with the practice’s values.

2) Consider Mentorship and Training

Once potential successors are identified, provide them with mentorship and training opportunities. This could involve allowing them to take on more responsibilities, participate in decision-making, and learn from the current planner’s experiences.

3) Plan Your Client Transition Strategy

Clients need to be informed about the succession plan well in advance. Introduce potential successors to clients gradually, ensuring that there is time to build trust and rapport. Communication is key; reassure clients that their needs will continue to be met seamlessly.

4) Take Care of Legal and Financial Considerations

Work with legal and other financial advisors to navigate the legalities and financial implications of the succession plan. This might involve updating ownership agreements, drafting buy-sell agreements, and addressing tax considerations.

5) Get Started with a Gradual Transition Period

Plan for a gradual transition period during which the you and the successor work together. This allows the successor to learn the intricacies of your practice, understand client needs, and gain confidence in their new role.

6) Consider Feedback and Do an Evaluation

Regularly assess the progress of the succession plan. Seek feedback from clients, staff members, and the successor themselves. Make adjustments as necessary to ensure the plan’s effectiveness.

7) Have an Emergency Contingency

While succession planning often revolves around planned transitions, it’s equally important to have a contingency plan for unexpected events like disability or sudden retirement. Having a contingency plan ensures that the practice can continue operating without major disruptions.

Schedule a 15-minute call with Mike Rogers, AIF, 360’s Founder & Succession Expert

Key Components of a Financial Advisor Succession Plan

Elements of a Successful Succession Plan

A successful succession plan should include the following:

  • timeline
  • valuation methods
  • client transition strategies
  • legal considerations like buy-sell agreements. 
  • tax implications
  • financing options

Additionally, it should identify potential successors, whether internal or external, and outline a training and development plan for them. 

Finally, it’s crucial to involve stakeholders and communicate effectively throughout the process.

The Role of Business Valuation in Financial Advisor Succession Planning

Business valuation is a critical component of succession planning. It establishes the worth of your practice, which is crucial for setting sale prices and terms. Various methods exist for valuing an advisory business, such as multiples of revenue or EBITDA, and discounted cash flows. 

Valuation is not just a one-time activity; it should be reviewed periodically, especially as you near the time of succession.

Developing an Internal Succession Strategy

The Importance of Internal Succession in Advisory Firms

Internal succession has the advantage of offering continuity for clients and employees. It allows the firm to maintain its culture and operating systems, thereby reducing transitional friction. However, this strategy requires identifying and developing potential successors well in advance. The selected individuals should share the firm’s vision and be capable of running the business efficiently.

Identifying and Developing Next-Generation Advisors

For internal succession to be successful, identifying and developing next-generation advisors is crucial. This involves mentoring, offering career development opportunities, and progressively delegating responsibilities. A systematic approach to this can include setting up training programs, creating a leadership track, and providing incentives for potential successors to stay and grow within the firm.

Buy-Sell Agreements and Business Continuity

How Buy-Sell Agreements Protect Business Owners

Buy-sell agreements serve as a legal framework that outlines the procedure for transferring ownership when a partner exits the business, either due to retirement, disability, or death. These agreements protect the remaining partners by establishing a predetermined price and terms for the buyout, thereby avoiding potential conflicts and ensuring business continuity.

Ensuring Business Continuity Through a Well-Thought-Out Plan

A robust succession plan ensures business continuity by addressing various scenarios and outlining contingency plans. It should include details about who will take over day-to-day operations temporarily if the principal advisor cannot fulfill their role. By addressing these elements in advance, you are protecting the business, its employees, and its clients from undue risks.

Transitioning to the Next Generation or Family Members

Succession Plans Involving Next Generation or Family Members

Transitioning the business to next-generation or family members can be rewarding but requires careful planning. Ensuring that successors have the required skill sets and share the company’s vision is essential. It is also critical to address family dynamics and set boundaries to prevent personal relationships from affecting the business. A phased transition period often helps in acclimatizing the new leaders.

How to Facilitate a Smooth Transition to Family Members in Advisory Business

A smooth transition to family members involves open communication, role definition, and a timeline for the changeover. Clarity around responsibilities and a formal training program can help. Financial advisors should also consider the implications of ownership shares, governance structures, and decision-making processes. 

Expert consultation can be invaluable for navigating family professional complexities.

Speak with a 360 Financial Succession Expert

Have a succession plan that works for you and your clients. Why settle for a private equity sale that doesn’t support your vision or protect your clients? We can help you leverage your assets and monetize your business with a single transition that delivers a win for your clients, employees, and your family.

Schedule a 15-minute Succession Call

Fair Market Value and Outright Sale

Understanding Fair Market Value in Succession Planning

Understanding the fair market value of your practice is crucial for an outright sale. This not only helps in setting realistic expectations but also in negotiating better terms. The valuation can be determined by several factors, including the firm’s assets, client base, revenue streams, and market conditions. Utilizing the services of a professional valuation expert can provide a more accurate estimate.

Considerations for an Outright Sale of the Advisory Firm

An outright sale may seem like a straightforward exit strategy, but it comes with its own set of considerations. These include finding the right buyer who aligns with your business culture and objectives, conducting due diligence, and negotiating sale terms. There may also be regulatory compliance and client transition aspects that need to be managed carefully.

Client Relations and Retention During Transition Period

Communicating the Succession Plan to Clients

Transparency and effective communication are crucial when informing clients about a succession plan. This reassures them and reduces the likelihood of attrition. Regular updates, personal meetings, and a clear transition timeline can go a long way in retaining client trust. Additionally, introducing the successor in advance can help smooth the transition process.

Strategies to Retain Client Base and Attract New Clients During the Transition

Retaining your client base during a transition involves maintaining high service standards and focusing on communication. Strategies may include offering special consultations to discuss changes, providing assurance of continuity in investment strategies, and even leveraging the transition as a marketing opportunity. Encouraging the successor to build relationships with existing clients can also help in attracting new clients.

At 360 Financial, we recently acquired Flemming Investment Group.  Below is a case study that goes over this successful merger.

Case Study: Navigating a Successful Merger for Long-Term Stability


Background: When Fleming Investment Group, an independent advisor, contemplated merging their sole advisor firm with a larger team, they sought a diverse skill set and essential resources for a successful merger.

Challenges: Their boutique firm lacked dedicated investment, marketing, and client communications departments crucial in our industry. They needed a team that could provide these resources and facilitate a seamless merger.

Valuable Lessons Learned: The merger process highlighted the need for a conversion checklist and on-site technology expertise to avoid potential pitfalls.

Client-Centric Approach: Client communication remained collaborative, focusing on their well-being, along with staff and families.

Long-Term Stability and Succession: The focus was on ensuring moves benefited clients and assured long-term career stability for the team. This included certification, structured investments, and a strong succession plan.

Conclusion: Fleming Investment Group’s case demonstrates the importance of a diverse team, client-centric approach, and long-term planning in achieving a successful merger and ensuring stability for the future.

Elite Support Partners: Superior Transition Service

Dreading the work involved in changing broker dealers? What if a superior transition team came in and did all the heavy lifting for you? Our team is specialized, organized and fast. We expedite timing, open all the accounts and handle all repapering.


The Sprint: 30-45 Day Expectations:

LPL Transitions Team opens all accounts and 360 Financial Transition Staff oversees signatures on all electronic and mailed documents

The Results:

  • 86% accounts opened with 90% account transfers complete within three weeks*
  • Compliments to the team with a <2% NIGO rate

*Statistics based on Flemming Investment Group transfer to 360 Financial in 2022.

Expert Guidance and Support in Succession Planning

Seeking Expert Guidance for a Solid Succession Plan

Succession planning is complex and involves various facets, making expert guidance invaluable. Legal advisors, valuation experts, and even succession planning consultants can provide specialized insight that you might overlook. A multidisciplinary approach ensures that all bases are covered, from legal compliance to fair valuation and effective client transition.

Resources and Support Available to Financial Professionals in Succession Planning

Various resources are available to assist financial advisors in succession planning. These include industry publications, online courses, and consultancy services specialized in succession planning. Professional associations often offer guidelines, templates, and tools to help with drafting a comprehensive succession plan. Peer networks can also provide valuable insights and best practices.

Planning for Your Own Retirement as a Financial Advisor

Integrating Personal Financial Planning into Succession Planning

It’s crucial not to overlook your own retirement planning while focusing on business succession. This involves integrating personal financial goals into the succession planning process. From assessing retirement needs to aligning investment strategies, you must ensure that the sale or transition of the business adequately supports your retirement and lifestyle goals.

Closing the Chapter: Moving into Retirement as a Financial Advisor

Retirement marks a significant life transition and closing your professional chapter should be planned with as much care as you’ve provided your clients. Ensuring a smooth transition not only preserves your professional legacy but also offers you peace of mind as you move to the next phase of life. Taking the time to reflect, celebrate achievements, and set new life goals is essential for a fulfilling retirement.

Your Succession Plan

The Importance of a Comprehensive Financial Advisor Succession Plan

A comprehensive succession plan is not just a safety net for financial advisors; it’s an essential business strategy. It provides a roadmap for your exit, ensuring that your clients continue to receive excellent service and that your legacy endures. 

A well-crafted plan can also increase the value of your firm and provide financial security for your retirement.

How Proper Succession Planning Benefits Clients, Advisors, and the Financial Planning Industry

Proper succession planning is a win-win for all parties involved: clients, advisors, and the broader financial planning industry. Clients are assured continuity in service, advisors can retire with the peace of mind knowing their life’s work is in capable hands, and the industry benefits from a smoother transition of expertise and clientele. 

Succession planning, therefore, is more than a business necessity; it’s a service to your community and industry.

Speak with a 360 Financial Succession Expert

Have a succession plan that works for you and your clients. Why settle for a private equity sale that doesn’t support your vision or protect your clients? We can help you leverage your assets and monetize your business with a single transition that delivers a win for your clients, employees, and your family.

Schedule a 15-minute Succession Call

About the Author: Brian Bohnsack, AIF®

Brian attained a bachelor’s degree in accounting, earned his FINRA series 7 and 66 securities registrations through LPL Financial, and carries life and health insurance licenses.

Brian has a wide range of experience in financial services, accounting, and management. He loves working directly with his clients to help them learn more about their goals and dreams and educate them about financial planning and investing.

Brian is married to Patty and raised three children in St. Michael, Minnesota. He loves activities like boating, snowmobiling, biking, and traveling. Brian is a huge sports fan, participates in volunteer activities regularly, and is actively involved in community organizations.

One of Brian’s goals is to see every Big Ten stadium and the fourteen biggest college football stadiums. To date, he has seen 8 of the 14 of the Big Ten stadiums and 6 of 14 of the football college stadiums

Schedule a 15-minute Call with Brian

Read More:

Learn More about Succession 360

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Financial Advisors for Business Owners: What They Do and How They Help

Fiduciary Financial Advisors for Business Owners

What Your Business Financial Advisor Will Do and How They Can Help

If you’re searching online for financial advisors for business owners, then you probably have specific tax and investment management needs that are more complex than the average professional. It’s important that you work with the right wealth management team. In this post, I’ll cover what financial advisor for business owners do and how they help.

By Will Grant, Wealth Manager, CFP®, CPWA® of 360 Financial

As a CERTIFIED FINANCIAL PLANNER™ and Certified Private Wealth Advisor®, Will helps clients create their ideal life through values-based financial planning. His process is designed to pursue each client’s objective, whether it’s preparing for retirement, ensuring smooth business succession, funding for education, implementing wealth transfer strategies, or navigating other impactful financial events.

Do You Need a Financial Advisor that Specializes in Working with Small Business Owners?

It’s important to work with an experienced and credentialed team that can help you get you from where you are now to where you want to go.

If you’re planning the sale of a business, you need someone who can handle the complexities of that transition and guide you through it. Or you might want to ensure that you’re not overexposed and unprepared for retirement.

An advisor who understands investment management and complex financial planning for business owners can help. They can help you evaluate your options, discuss pros and cons, and build a customized strategy based on your specific goals. 

Try to Find a Financial Advisor that Provides Holistic Wealth Management for Business Owners

As a business owner, you’re busy running your business.

Maybe you have a family or other loved ones that you’re responsible for and life can hectic. If you’re like many of the busy business owners we work with, you’re looking for a team that can take care of every single aspect of wealth management for you. So you don’t have to worry about it.

Your time is valuable, and it’s critical that you’re able to focus on what matters most to you, rather than worrying about your portfolio or future retirement income streams.

There are advisory firms that are great at handling the basics.

However, as a business owner, your needs may be more complex. You may require more than the basics. And you would likely benefit from having seamless tax planning capabilities. In this post, I’ll go over the main aspects of wealth management for business owners.

At 360 Financial, we work with many business owners within our home state of Minnesota. We also work with business owners across the US. To learn more about our financial advisory services for business owners, please schedule a 15-min introduction call.

How Does a Business Financial Advisor Help?

Your personal and business finances may be connected when you’re a small business owner. Below, I’ll cover some of the areas where a good financial advisor for business owners will be invaluable.

Comprehensive Financial Planning

An experienced advisor will provide business owners and their families with personalized plans based on their situation, goals, risk tolerance and unique challenges. You advisor should address all aspects of your financial life.

The should help you with the following key elements of wealth management:

  • retirement planning
  • investment management
  • succession planning
  • risk management
  • tax optimization
  • estate planning
  • legacy planning

A comprehensive approach is instrumental to make smart, informed financial decisions.

Tax Planning and Strategies

Your financial advisor should support you as a business owners with tax planning by staying up-to-date with ever-changing tax laws. Whether you’re considering business entity structures, retirement plans, or succession planning, your advisor should offer valuable insights.

At 360 we have a partnership with a CPA firm which enables clients to access tax planning services alongside a tax advisor and wealth manager, streamlining your financial strategies. While you’re not at all required to work with our CPA firm, it can be helpful to have it all under one roof.

Your financial advisor should work together with your accounting firm to ensure you get the best possible tax planning strategy to minimize your taxes each year.

Insurance Planning

Your financial advisor should play a key role in helping you as a business owner assess risks within your financial life and discuss options to protect your business and family. Overall, your advisor should strive for well-rounded insurance coverage that is customized to your goals, provides risk management and provides financial security for those you care about.

Retirement Planning

At 360 Financial, we start by conducting a comprehensive analysis of your current financial savings and retirement goals to determine if we are on track. Then we can create a customized retirement strategy which uses the appropriate retirement plan based on your situation and employees.

We can assist with the initial retirement plan set-up, monitoring and maximizing your contributions to help build a work-optional lifestyle.

401(k) Plans for Employees

Your financial advisor should guide you through the different types of retirement plans that are available to business owners and help you decide which is best. Navigating whether you should get a Solo 40(k), SEP IRA, SIMPLE IRA, Profit Sharing Plan, Cash Balance Plan, etc can get confusing. Your advisor should help you decide which will align best with your employees and financial goals. At 360 Financial, we assist our business owner clients through the whole process from set-up to monitoring. If the plan needs to be terminated in the future, we’re able to help with that as well.

Help with Succession Planning

For some business owners a succession plan is a once in a lifetime event that you want to make sure is done correctly. From maximizing the value of your business to facilitating a successful transition, you want to make sure there are no mistakes and everything is seamless.

At 360, we can help explore a range of options from Mergers and Acquisitions (M&A) strategies to Family Limited Partnerships (FLP) and Employee Stock Ownership Plans (ESOPs). Whether you’re considering a sale to an external buyer, passing the business to family members, or employees, we can provide a customized strategy based on your vision.

Schedule a 15-minute Call

What Kinds of Business Owners We Help at 360 Financial

Local Brick-and-Mortar Small Business Owners

From sole proprietors to business owners with hundreds or thousands of employees, our team is experienced in a wide range of situations, dedicated to serving your business and family. Our partnership with CPA firm Rapacki + Co. allows us to offer you the option of working with a comprehensive team to help implement tax-efficient strategies through our LifeWealth Process.

Business Owners Planning for Retirement

As a business owners, you’ve worked hard and deserve to have a relaxing retirement. We help you get there by developing a customized LifeWealth Plan based on your financial goals, risk tolerance and vision.

Our financial plans for business owners approaching retirement involves review of their current financial landscape, optimizing retirement savings while working, developing a tax-efficient withdrawal strategy during retirement and assisting with succession planning. Our team of CFP professionals provide experienced knowledge that will access estate and tax considerations as well. 

Independent Financial Advisory Firms Ready for Succession

At 360 Financial, we also specialize assisting financial advisors with books of business monetize their business and transition to retirement. It’s important to know that your clients are in good hands with a team of dedicated professionals held under the fiduciary standard with excellent client service for the coming decades.

Business Owners Planning for a Sale or Liquidation Event

If you’re preparing for the sale of a business, you’re probably spinning a lot of plates. And you might be worried about the tax consequences. Everyone has to pay tax. But you shouldn’t have to pay more than is required due to an error in tax planning.

Our team of Wealth Managers assist business owners to prepare for a sale or liquidation event for their business. We do this with a professional team of advisors ranging from tax, insurance and legal to help navigate the complexities of a transaction.

Benefits of Working with a Fee-Only Fiduciary Financial Advisor

There are several key benefits working with a fee-only fiduciary advisor such as our experienced, CFP professional team. First, there is trust that your advisor is held under the fiduciary standard which means to always act in client’s best interests. Not every advisor is held to that standard so it’s important to ask. We also provide our transparent fee structure during our first discussions which is a pillar to building trust with our clients.

This promotes clarity on the benefits we can provide your family through our LifeWealth process and investment committee. 

Connect with a Financial Advisor Online or In Person


If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial.

360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch. 

Schedule a 15-minute Call

About the Author

William Grant

Will Grant, CFP

Will Grant enjoys empowering people to make informed decisions and seeing the positive impact his guidance can have on their lives.

Prior to joining 360, he spent seven years serving hundreds of clients at a boutique RIA focused on healthcare executives with equity compensation and then at a large, independent RIA. He earned a Bachelor of Science degree in Finance from Miami University and holds his Series 7 and 63 licenses through LPL Financial and his 65 license through 360 Financial.

Will lives in Minneapolis with his fiancée, Melissa. In his free time, he enjoys competing in triathlons, golfing and is an active member of the Minnesota Leadership Council for the Chick Evans Scholarship Foundation, which he was a recipient of.

Schedule a 15-minute Call with Will

Other Articles and Guides 

Retirement Planning for Self-Employed People

Small Business Retirement Plans

Schedule a Call

At 360 Financial, our clients come first. You deserve personalized attention. You’ll be happier and more confident in your financial future when you have an advisor who always puts your needs and best interest first. Schedule a 15-minute introductory call with a 360 financial advisor to see how we can help with your retirement, succession, tax, and estate planning.

Schedule a 15-minute Call

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Retirement Planning for Self-Employed People

How to Plan for Retirement as a Self-Employed Person

Written by Mike Rogers, Founder and President at 360 Financial

Retirement planning for self-employed people may seem very overwhelming.

When you have a full-time job, your retirement planning is in the form of a 401(k). But when you’re self-employed, the path is less cut and dry. However, with proper financial planning, you can retire just as early as someone with a 401(k).

This article explains how to plan for retirement if you’re self-employed.



  1. How to Plan for Retirement When Self-Employed
  2. Retirement Options for Self-Employed People
  3. What retirement plan works best for someone who is self-employed?
  4. Can a self-employed person have a 401(k)?
  5. How to open a 401(k) without an employer?
  6. IRA for Self-Employed People
  7. Best Retirement Plans For High-Income Self-Employed People
  8. Best Retirement Plans for Self-Employed People with Employees
  9. Best Retirement Plan for S Corp Owners
  10. How Do I Set Up a Self-Employed Retirement Plan?
  11. Key Takeaways
  12. Plan for Retirement at 360 Financial


How to Plan for Retirement When Self-Employed

You don’t have an employer offering a 401(k), but saving for retirement is essential.

You don’t want to work forever, and you won’t be able to keep working as you age. Saving now is key to help you retire, relax, and afford a home care facility in your future. Think of saving for retirement as self-care for your future self. Planning for retirement when you’re self-employed starts with knowing your options.


Retirement Options for Self-Employed People

The freedom of self-employment offers options.

Just like you can choose how to run your business, you also have to choose what retirement account you want to open and whether to work with an advisor, a wealth management team, or do it yourself.


Traditional or Roth IRA:

IRAs are a great option if you’re just starting out and have no employees.

If you just left a full-time job, choose an IRA, because you can roll your old 401K into a Traditional or Roth IRA. Both types of IRAs offer tax benefits. The contribution limit is $6,500 in 2023.


One-Participant 401(k) i.e. Solo 401(k):

This is another great option for self-employed people who have no employees, and these can also cover your spouse.

These plans have the same rules and requirements as any other 401(k) plan. The contribution limit in 2023 is $22,500, but if you’re over 50, you can contribute $30,000.



If you have an established business with no or a few employees, the SEP IRA is a great choice.

If you have employees, you will have to contribute the same percentage for each employee—including yourself. You’ll be treated as an employee in this case. You also have to give contributions to every eligible employee, but the burden of making contributions is entirely on you. In 2023, you can contribute the lesser of $66,000 or up to 25% of compensation or net earnings. You do have a limit of $330,000.



If you have a large business with up to 100 employees, we recommend the SIMPLE IRA.

This retirement plan allows employees to contribute as well. This is an easy account to open, but you make mandatory contributions to employee accounts. This may be costly if you have a lot of employees. You can contribute up to $15,500 in 2023.


Profit-Sharing Plan:

If you have a lot of employees, we recommend a Profit-Sharing Plan.

This allows you to contribute what you want to employees. However, only you will contribute to this plan, not your employees. If you have a profit-sharing plan, you can also have other retirement plans.


Money Purchase Plan:

Another option is the Money Purchase Plan.

This is a good option if you have a lot of employees. This plan allows you to grow big accounts, but you do have contribution requirements you have to follow. You’ll have to contribute certain percentages of employee’s salaries, but this may mean highly compensated employees get a lot more.

As you can see, you have a variety of options when it comes to planning for retirement. We recommend researching your options, and focusing on what type of plan is best for you at this stage in your career. You can always open a different type of account down the road.

If you do decide to work on your personal financial plan alone, here’s what you can expect.


What retirement plan works best for someone who is self-employed?

There’s no one-size-fits-all for self-employed retirement planning and wealth management.

It truly depends on you and your business.

Generally, if you have no or few employees, we recommend:

  • A Traditional or Roth IRA
  • One-Participant 401(k) i.e. Solo 401(k)

If you have a business with employees to consider, choose from:

  • Profit-Sharing Plan
  • Money Purchase Plan

Again, it all depends on your circumstance. If the choice isn’t clear as you research these options, you can always work with a financial planner or advisor to help you.


Female entrepreneur planning her retirement.
There’s no one-size-fits-all for self-employed retirement planning and wealth management.


Can a self-employed person have a 401(k)?

Yes. Although you won’t have an employer-sponsored 401(k), you can still have a 401(k).


How can I open a 401(k) without an employer?

Open up a One-Participant 401(k) i.e. Solo 401(k). You can also share this account with your spouse. It will work similarly to any other 401(k).


IRA for Self-Employed People

An IRA is a popular choice among self-employed people.

You’ll enjoy tax benefits with every type of IRA, but what tax benefits you will reap depends on what type you choose. For example, with a Roth IRA, you reap tax benefits when you withdraw the money in your retirement. With a Traditional IRA, you’ll get the tax breaks when you put it in.

Overall, IRAs are great because they have less restrictions when you want to take the money out early. You’ll also have less restrictions when you retire. Also, if you’re a disciplined saver, you’ll often be able to have more money in retirement than other types of accounts.

If you have a few employees, you can open up a SEP IRA. If you have more employees, open up a SIMPLE IRA.


Well-Positioned Retirement Plans For High-Income Self Employed People

If you earn more money, we highly recommend a SEP IRA.

With this type of account, your annual contribution cannot exceed the lesser of 25% of your total compensation or $66,000 in 2023. Obviously, you can contribute a lot more per year than someone with a Traditional or Roth IRA—they can only contribute $6,500 in 2023.

If you have employees, we recommend the Profit-Sharing Plan. This is because you can contribute what you want to your employees, and that doesn’t have to be equal to yourself. If you want to save a great amount for yourself, you have more freedom to do so with this plan.


Retirement Plans Better Suited for Self-Employed People with Employees

If you have employees, certain types of plans won’t be ideal for you.

Here are the options we recommend choosing from:

  • Profit-Sharing Plan
  • Money Purchase Plan

All of these retirement accounts will help you save for your own retirement, along with your employees.


Best Retirement Plan for S Corp Owners

If you have an S Corp, we recommend choosing between:

  • Traditional or Roth IRA
  • One-Participant 401(k) i.e. Solo 401(k)


How Do I Set Up a Self-Employed Retirement Plan?

Choose what type of account you want, then you’ll open an account with a brokerage like Vanguard or Ameritrade.

If you’re not sure what type of account to do or you want help throughout the process, work with a financial planner or advisor. They will help you with tax planning.


Key Takeaways:

  • You can plan for retirement as a self-employed person.
  • You have options, but getting started as early as possible is key.
  • The plan that is best for you depends on your current circumstance.
  • If you need expert advice and guidance, work with a financial advisor.


About the Author

Mike Rogers

Mike Rogers is the founder and president of Minnesota-based financial advisory firm 360 Financial. As the founder, Mike’s priority is that 360 Financial always serves the clients with empathy, integrity, and honesty. This unique, client-centric approach allows the firm to help clients decipher between the things they can control and what truly matters.

In other words, Mike understands that money is not the end-all-be-all; instead, it’s the “how” that fuels the “why” to the question: “What’s important to you?”

Learn more about Mike.


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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.