Anyone who is self-employed knows that unexpected expenses can pop up. Those unforeseen expenses can slowly bleed business accounts dry, which can put a damper on plans to save for retirement. For many self-employed people, retirement planning is placed on the proverbial back-burner. The stress of paying monthly household bills, as well as business-related expenses, takes precedence.
Retirement planning is very important for the self-employed. People that have a traditional company job, often qualify for benefits after a probationary period. These benefits usually include retirement packages. Self-employed people have to fend for themselves regarding health insurance as well as retirement provisions.
Put aside a set amount of money each month and tuck it away in savings. It sounds tougher than it really is. Most savings accounts accrue interest over time. If you are only able to put fifty dollars a month in savings, that’s six hundred dollars a year. That’s twelve thousand dollars after twenty years! Not to mention all the interest that has accrued in that twenty years.
It goes without say that the more you can put in savings, the better off you will be in the future. The most important thing to remember about having a retirement savings account is to not withdraw from it for any reason. You will be thankful when you reach retirement and have that money to fall back on.
Another good thing to do is watch unnecessary spending now. Think of it as not spoiling yourself now, in order to take care of yourself later. One good way of watching where your money is going is by creating and sticking to a budget.
Good budgeting can also be thought of as a reward for all the years of hard work. Being self-employed requires hard work, creativity and dedication. Don’t let your years of hard work be for nothing come retirement time.
Talk to a Representative at your bank. They can provide you information on Roth IRAs and 401(k) plans. There are pros and cons for both. In the long run, checking into one or the other could prove beneficial.
Talking with a financial planner can get you pointed in the right direction. They can provide valuable information about retirement options for self-employed people. Financial planning isn’t always as easy as it may sound. Having knowledgeable professional help can give you financial peace of mind.
One more suggestion to consider is investing. Do your homework before investing your money into anything! Spend some time researching companies and stock brokers. Watch the trends in the stock market to see which companies hold steady.
Make sure that if you hire a stock broker, they are reputable. You want to be able to trust that broker with your money. The idea of investing is to make money, not lose it. There are plenty of shady characters and companies that are on shaky ground.
The bottom line is start retirement planning now. Don’t wait until it is too late. It doesn’t matter how long you have been in business for yourself, start planning for your financial future now.
Savings accounts, budgeting and investing are all good steps in the right direction toward retirement. One of the best things you can do is speak with a financial professional. He/she can discuss retirement plans, investing options and other options you may not even know exist.