If you’re self-employed, either full- or part-time, you can start a retirement account to cut your taxes and build financial security—just like someone with a 401(k) at a regular job.
Being self-employed gives you a certain amount of freedom, but it doesn’t give you a pass on saving for retirement. In fact, when you’re the boss, saving for retirement is even more important because you’re on your own. It’s completely up to you to have enough retirement savings to spend when you need it.
You can have a retirement account no matter what type of self-employed worker you call yourself, such as a:
- Freelancer
- Independent contractor
- 1099 worker
- Sole Proprietor
- Solopreneur
- One-Person business
- Side hustler
- Entrepreneur
- Small business owner
In this post, you’ll learn the rules, pros, and cons of four easy retirement account options for any freelancer or self-employed person. Using one or more of them could make the difference between having a comfortable, happy lifestyle in retirement—or just scraping by.
How to Know If You’re Self-Employed
First, let’s define who is self-employed. If you earn income through some kind of trade or business with the intent to make a profit, you’re self-employed. Having that income qualifies you for a variety of retirement accounts.
The gig economy has turned many people into entrepreneurs. You might work a regular day job and also earn income on the side, such as driving for a rideshare service, teaching piano, consulting, writing, creating apps, or walking dogs. If you have both self-employed and employee income, you have even more retirement account options.
If you earn income through some kind of trade or business with the intent to make a profit, you’re self-employed. Having that income qualifies you for a variety of retirement accounts.
Remember that you don’t have to work full-time, be incorporated, or have employees in order to call yourself “self-employed.” But if you are incorporated, you have retirement options as the owner or as an employee of your business.
The opposite of being self-employed is being an employee earning an hourly wage or a salary. So, if your only source of earned income is as a W-2 employee, then you don’t qualify for self-employed retirement accounts. However, you still have multiple options, which I’ll review here.
Tidak ada komentar:
Posting Komentar