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When I originally thought of this post I was planning on using the following title: How Freelancers Can Create Their Own Benefits Package. Then, I changed my mind because I realized that the advice in this post would be of service to people who were and weren’t freelancing.
Not Every Employer Has Your Back
When I decided to transition to working for myself I realized that I wasn’t just changing how I was working, but losing access to benefits. I was leaving behind: heavily subsidized insurance, my retirement match, and paid vacation. The thing is, I was working 60-80 hours a week and my income wasn’t growing in the way that I thought it should. I was exhausted and I was depressed. So I struck out on my own. I have to be honest and say that I had fantastic benefits at my previous job. But, I am convinced that in the long-run I will earn more per month working for myself but that doesn’t address the fact that I still have to be a heck of a lot more proactive regarding managing my current and future life.
It’s All About the Benefits
After I left my old job in addition to figuring out what it means to work for myself I also had to figure out: how to save for retirement, health insurance, dental insurance, car insurance, home insurance, vacation, and more.
Each year I’m getting a little bit closer to retirement and my future-self who I imagine to be a: speaker, public personality, wife, mom, and all around bad-ass wants to eat organic food, while traveling the world and quietly building a real estate empire. I can’t wait on saving for the future and I have to prioritize my future now.
Saving for my retirement is one of the places where I am spending a lot of my time and attention. My future self and YOUR future self deserve that type of care.
Who Are You Now? And Who Is Your Future Self?
Right now I am a freelancer who is working towards a bigger goal. As I work towards that goal I also have to work towards my future one dollar at a time. I started freelancing because of my blogging experience, if you would like to start a blog check out the following post.
If you are currently working at a business that does not offer you retirement benefits such as a Roth IRA or a Traditional IRA don’t worry-you can start working towards your future today. Think about who your future self will be. What is the life that you imagine for your future…you?
If you’re wondering what a Roth IRA or a Traditional IRA are they are basically the following: individual retirement accounts. The Roth IRA is cool because you fund that account with after tax income. When you retire you won’t have to pay taxes on the money as you withdraw it after the age of 59 1/2. You can invest around 5,500 a year. Check your income to see if you’re eligible for a Roth IRA.
A Traditional IRA is basically a individual retirement account that is contributed to with income that hasn’t been taxed yet. You will pay taxes as you withdraw the money when you become eligible.
If You Are A: cashier, sales person, barista, student, part-time employee, freelancer, brand ambassador, vagabond, or online entrepreneur you can start saving for your future TODAY. Basically, if you are a person whose place of employment doesn’t off you a retirement savings plan there are options for you. Saving for the future is not just for the rich and happily the internet has created opportunities for you to save by cutting out the “middle man (job).”
In my case I decided to open up my new Roth IRA and Wealth Building accounts through Betterment. Betterment
is an online brokerage company with a very simple user interface that allows people with varying ranges of income or lack of access to retirement via their work to save for their futures. The great thing about Betterment is that you can begin saving with as little as $25 dollars a month.
All Investing Has Risk
I don’t have all of my money “eggs” in one basket. I already have a retirement account and I have set up other savings accounts as well. Saving your money in a Roth IRA or Traditional IRA is a long-term project. Even though you can set up an account with Betterment it’s imperative that you stay engaged in the process and check on your accounts.
Spend time reading on investing for your future, what to look out for, and what to anticipate. Ignorance is not an excuse. It’s important for you to be proactive and learn as much as you can about the investing process. Open a Betterment account now.
Save for your future, even if it’s $25 a month. The younger you are the more your money will grow over time. You owe it to your future you to be proactive and not reactive with your future. I really wish someone had told be this when I was in my twenties. If Betterment isn’t for you then please find another online or bricks and mortar broker to begin preparing for your future.
Finally
Retirement can cause your income to decrease dramatically, requiring you to take out a loan against the value of your home. A reverse mortgage is one such loan type. If you choose to obtain one you will have no monthly obligation to pay it back. Instead, your reverse mortgage lender will provide you with money for an extended period. You can use that money to help yourself or your family to live more comfortably. However, obtaining such a loan means that the home may not be left to your family as an inheritance unless they choose to pay the loan balance if you die while the loan still has an outstanding balance.
You do have a number of retirement options to explore. Take the time to do your research and see what is a good fit for you personally.
Do You Need To Create Your Own Benefits Package?
What’s Stopping You?
How did I get into freelancing for myself? I started a blog, I changed my life, and imagined more for myself. It hasn’t been easy but I’m making it happen. If you’re interested in starting a blog check out my post on How To Start A Blog, Change Your Life, and Find Your Tribes. I use Bluehost and if you click on my affiliate link you can host your blog for $3.49 a month. See How You Can Set Up a WordPress Blog in 15 Minutes Please note: I may receive some compensation if you use purchase a package through this link
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I’m agree with the entire post
I’m just trying to get people to save as much as they can for retirement!
I was terrible at saving for retirement during freelancing. I just recently moved all my stuff to vanguard though and at the very least I won’t be getting hit with non-essential fees that was going to my financial non-advisor. I’d hate to add up how much money I lost over the years from that
That’s a road not worth visiting. I am making a big shift for 2016 in terms of working towards the goal that I told you about and just being a lot more focused about what’s important. My hope is to get back to the amount I was saving by March. I’m not sure how that will go…we shall see. Fees are a b$tch for retirement savings. Pisses me off!
I have money automatically deposited in a retirement fund out of my pay every month. To be honest until I started that, it was hard for me to start saving up for retirement. Now I look back….I’m so glad I did it.
At my old job we had no choice-we were automatically signed up for a retirement account. Thank God for that!!I have a lot of money saved because that task was taken out of my hands which is why I love these online savings tools.
Being self-employed, it is hard for me to dedicate funds to retirement planning because I tend to use the funds to grow. But I’m learning to invest even a few hundred dollars a month and slowly grow that!
It’s a tricky balance. I’ve definitely put in some money to get my business to grow. I am looking at investing in a course sometime this Spring. I’ve just gotten very worried about people focusing on now and not “later.” One of my initiatives via The Shop My Closet Project is to get as many people to sign up as possible for a retirement account.