Freelancer Retirement Planning 101

Written By:
Haley Sacks
(aka Mrs. Dow Jones)

Did you catch that stat from CNBC? 70% of freelancers have zero long-term savings for retirement. Well, fear not – Mrs. Dow Jones is here to drop some knowledge on how you, as a freelancer, can secure your financial future.

Finding Your Number

First things first, figure out your retirement goal. I'm talking about using a retirement calculator to pinpoint how much you need to stop working. Let's set that goal straight.

The Roth IRA – Your Freelancer's Little Black Dress

Max out your Roth IRA. It's like the little black dress of retirement accounts – it suits everyone. Contributions are taxed, but you can withdraw tax-free in retirement. The 2023 limit is $6500, so make the most of it.

HSA Magic

If your health insurance offers an HSA, max out your contributions and invest that money. Triple tax advantage, folks – tax-free input, tax-free growth, and tax-free withdrawals.

Choosing the Right Account

  • Solo 401k: No employees other than a spouse? Go for the Solo 401k. You can contribute up to 66k a year – the highest among freelance retirement accounts.
  • SEP IRA: Have employees? Consider a SEP IRA. Easy setup, contributing up to 66k a year or 25% of your business earnings.
  • SIMPLE IRA: Have employees and want to offer a retirement plan without the 401k hassle? SIMPLE IRA is your answer.

Accountant Consultation

Remember to consult your accountant. The type of corporation you have matters. LLC? S Corp? Let your accountant guide you to the best option.

Petition to Rebrand Retirement Accounts

And here's a little side note – let's petition to rebrand retirement accounts as tax-advantaged ways to reduce your income. Even if you want to work forever, contributing to retirement accounts lowers your taxable income.

Ready to take charge of your retirement as a self-employed pro? Don't forget to follow and stay rich.