Being self-employed brings freedom to build your own business or career path. For many, working for others just isn't an option. Of course, the downside of being the boss is the inherent responsibility to oversee every aspect of your operation seven days a week.
Start With a Written Retirement Strategy
An experienced planner will also be helpful when the time comes to convert from financial planning to retirement planning. This is the point when assets are needed to produce retirement income for the client.
Three Options for Self-Employed Individuals
Individual 401(k) – In 2023, individuals under the age of 50 are allowed to contribute the lesser of 25% of their compensation or $22,500.
SEP-IRA – In 2023, individuals under the age of 50 are allowed to contribute the lesser of 25% of their compensation or $66,000.
Roth-IRA – In 2023, contributions are limited to $6,500 for individuals under age-50. An additional $1,000 is available for those over age 50. Roth-IRAs also have income restrictions, beginning at $138,000 for single filers and $228,000 for joint filers. For more details please email me.
Roth-IRAs offer an additional advantage as well. A Roth is unique because it allows for emergency withdrawals without penalties on contribution amounts. Some view this feature as a backup emergency fund.
The Bottom Line on Retirement
Being self-employed allows for many effective options to save for retirement. When paired with an experienced advisor, who offers unbiased individualized investment advice, realizing your retirement goals can be easier than one might think.
If you’re not currently working with an advisor, or if you’ve lost contact with your current one, let’s start a conversation. Contact me at [email protected] or by calling (615) 469-7348.