A report by Career Builder found that there are around 10 million self-employed jobs in the U.S. Of those who are self-employed, 30 percent of them are at least 55 years of age, approaching time for retirement. In addition to having heavy tax burdens, self-employed people are generally more likely to have the responsibility of seeking out a retirement plan on their own accord. Without the option to participate in company 401(k) plans, they have the task of locating an option that suits their individual needs. Here are a few tips to help guide through the process.
1. Get an Early Start
It’s easy to get caught up in the day to day and put off something like obtaining a retirement account. Each year that passes by that you put off opening up your retirement account is less earnings you accumulate in interest, and the numbers add up quicker than you may think. As an example, say that you earn $50,000 per year and you place $2,000 (four percent) annually into an IRA beginning at age 30. At age 65, you have accumulated around $315k (before taxes) with $70k in contributions. If you began that exact same IRA just 5 years earlier, your payout increases to over $450k with $80k in contributions.