Being self-employed may give you more freedom over your schedule and day to day work, but it also means you’re solely responsible for your own retirement savings. Since you don’t have an employer setting up a retirement plan for you, it’s up to you to create your own path. The good news is that there are several ways to save for the future that can be tailored to your needs.
Even though everyone’s situation is different, here are some steps that can help you start planning.
Saving for Retirement on Your Own
If you’re self-employed, your retirement plan will likely start with personal savings. You can open special accounts that are made for people who work for themselves. These accounts allow you to set money aside each year and may offer tax benefits, depending on how they’re set up.
Some accounts are simple, while others give you more flexibility to save larger amounts. Choosing the right one may depend on how much you earn, whether you have employees, and how involved you want to be in managing the plan.
Estimating What You’ll Need
A good first step is to think about your basic living expenses—like housing, food, healthcare, and transportation. Then, try to figure out where your retirement income might come from.
This could include:
- Money you’ve saved or invested over time
- Income from part-time work or consulting
- Social Security
- Possibly, income from selling your business
It’s important to be realistic and flexible, as your income or plans may change over time.
Thinking About Your Business
If you own a business, you’ll also need to think about what happens to it when you retire. Some people choose to close their business, others pass it down to family, or sell it to someone else. You might also decide to keep working part-time or shift into a smaller role as you step back. Planning ahead can help make this transition smoother and give you more financial options.
Getting ready for retirement when you’re self-employed takes planning, but you don’t have to figure it all out on your own. If you’re thinking about what comes next, contact Vantage Point to start the conversation.
Investment advisory services are offered through Vantage Point Financial, a registered investment adviser. Registration with any regulatory body does not imply any particular level of skill. This material is provided for informational purposes only and should not be construed as investment, tax, or legal advice. Working with a financial planner does not ensure financial success or prevent loss .All investments involve risk, including the possible loss of principal. Past performance does not guarantee future results. The scenarios presented are hypothetical and are intended for illustrative purposes only. They do not reflect actual client results and are not guarantees of future outcomes. Individual results will vary. Certain financial strategies may offer tax advantages, but outcomes depend on individual circumstances and are subject to change due to tax laws and other external factors. Vantage Point Financial does not provide legal or tax advice. Consult a tax professional. Retirement outcomes depend on a variety of factors, including individual savings behavior, market performance, health events, and other considerations. Certain statements herein may reflect the firm’s current views, expectations, or beliefs, which are subject to change without notice. For additional information about our services, fees, and disclosures, please refer to our Form ADV Part 2A, available at https://vantagepoint-financial.com or upon request at no cost.
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