As an opera singer and freelance writer, I know self-employed. Everything from health insurance to paying taxes is a little more complicated for those of us who choose to work for ourselves. One trend I've noticed among many of my self-employed friends is that they haven't given much thought to retirement savings, life insurance or estate planning. Unfortunately, without employer-sponsored plans in place to help us, we need to be even more diligent in making sure our affairs are in order.
Life Insurance
Luckily life insurance isn't too hard to get when you're young, but it can become more difficult as you age. Most people have at least minimal coverage through their employer, but self-employed people don't have that luxury. If you're self-employed and have dependents (or plan to have dependents sometime in the future), go get yourself a term-life policy while you're young. The premiums won't be expensive and your loved ones will be taken care of in the event of your untimely demise.
Retirement Savings
If you don't save some money throughout your working life, you won't have an estate to plan. This is one of the biggest problems self-employed people face, after finding health insurance. Traditionally employed people generally have access to a company-sponsored 401k, which allows them to set thousands of tax-deferred dollars aside every year. However, what many self-employed people don't know is that we too can have 401k plans - we just have to set them up ourselves. Self-employed or Solo 401ks are gaining popularity and they are an excellent retirement planning tool for freelancers. We can also take advantage of Roth or Traditional IRAs, but Solo 401ks allow us to save much more.
Life Insurance
Luckily life insurance isn't too hard to get when you're young, but it can become more difficult as you age. Most people have at least minimal coverage through their employer, but self-employed people don't have that luxury. If you're self-employed and have dependents (or plan to have dependents sometime in the future), go get yourself a term-life policy while you're young. The premiums won't be expensive and your loved ones will be taken care of in the event of your untimely demise.
Retirement Savings
If you don't save some money throughout your working life, you won't have an estate to plan. This is one of the biggest problems self-employed people face, after finding health insurance. Traditionally employed people generally have access to a company-sponsored 401k, which allows them to set thousands of tax-deferred dollars aside every year. However, what many self-employed people don't know is that we too can have 401k plans - we just have to set them up ourselves. Self-employed or Solo 401ks are gaining popularity and they are an excellent retirement planning tool for freelancers. We can also take advantage of Roth or Traditional IRAs, but Solo 401ks allow us to save much more.
- Self-employed people need to make their own arrangements for retirement and life insurance.
- Estate planning for freelancers is no more complicated than for traditionally employed workers.
- Small business owners face special estate planning challenges and should seek professional advice.
|
|