If you’re working a regular 9-to-5 job with good benefits, you probably have access to an employer-sponsored investment account such as a 401(k). While it’s not always a guarantee these days, your employer may also match your contributions to such an account as an added boost. However, if you’re a business owner or a freelancer, you must come up with other ways to plan for retirement. Thankfully, there are some good options out there for freelancers or other self-employed people when it comes to retirement planning.

Get serious about saving

If you’re a freelance employee or a business owner, the buck stops with you when it comes to planning for retirement and finding other benefits for yourself. Retirement planning is your responsibility—so you’d better be serious about it. That means setting money aside strictly for retirement account contributions. Rather than being able to have the money automatically taken out of a regular paycheck, you must make sure to put that money aside on your own. You can send your money to a savings account or some other investment account, but you have to do it.

Get organized

If you’ve decided you are serious about retirement planning, you have to get all of your finances in order. You need to have a clear idea of your average expenses, your sources of income, and how much money you can reasonably set aside for retirement. As a freelancer, you may have to adjust the timing of your payment contributions, but make sure your savings have a place in any budget for the month, the quarter, or the year. When you have a variable income, you need to be flexible enough to manage the ups and downs while still contributing to a retirement plan.

For more tips and advice, check out Teri Cettina’s recent post on how to budget on a freelancer’s variable paycheck.

Retirement account options

When you don’t have an employer-sponsored retirement plan, you might think you’re simply out of luck. However, there are actually a few good plans for freelancers, business owners, and even those whose employers aren’t able to offer ideal options. For example, an individual investment account such as an IRA might be just what you need. You can choose from a traditional or a Roth IRA—pick your plan based on when you want to pay taxes on that retirement money.

A third option is the SEP IRA, which allows you to contribute far greater amounts than you could with a traditional IRA. A SEP IRA can be used in conjunction with a traditional IRA so you can boost your savings until it is time to retire. It is tax-exempt at the start, but the tax bill is due when you remove that money from the account. Other account options include the SIMPLE IRA and the Solo 401(k). Make sure you do your research to get a clearer picture of your options.


Jeff Rose is a certified financial planner and author of the blogs Good Financial Cents and Soldier of Finance.  Learn more about his Roth IRA Movement that has inspired over 140 personal finance to educate young adults on the importance of saving.