Have you started planning your retirement?
Retirement planning is especially important for home internet business owners. You don’t work for anyone else, which means it’s up to you to make sure your retirement will be a secure one.
With research by TD Ameritrade showing that a shocking 28% of self-employed people aren’t saving for retirement at all, the time to start is now.
Here are five tips to get you started with retirement planning….
Be Honest About Your Retirement Needs
Be honest with yourself about your retirement needs.
Even if retirement is years away for you, it’s never too early to start looking at what you will need to live comfortably when you retire.
• What will your monthly outgoings be?
• What kind of saving or retirement plans will you have?
• What Social Security or other income will you have?
• What kind of lifestyle do you want to lead?
• Would you be willing to change location for the sake of living more cheaply?
Your ideal retirement will look different at different stages of your life, but the time to start planning is now.
You can always adjust your retirement plan and revise your calculations as time passes.
Look Into Retirement Plans for the Self-Employed
As a home internet business owner, you won’t be able to rely on an employer to make contributions or run a retirement plan for you. The earlier you start with your retirement plan, the better.
The three main options for self-employed people are:
• Solo 401K – Similar to a traditional 401K, but designed especially for sole traders, a solo 401K allows you to make both employee and employer contributions, raising the amount you can save;
• SEP IRA – An SEP (simplified employee pension) IRA allows you to make employer contributions for all employees in your firm, including making contributions just for yourself if you’re a solo entrepreneur;
• Simple IRA – A simple (Savings Incentive Match Plan for Employees) IRA is very similar to a SEP, except that employees can contribute as well as employers. It’s also suitable for sole traders.
Do Your Research
Whether you’re comparing the three options outlined above or looking into other savings and investments, do plenty of research to make sure you choose the best option for you and your business.
As well as researching online or through books, consider calling in an experienced financial advisor for a consultation. The investment will be worth it in the long-term, as you use their advice to make the best decision for your financial future.
Get in the Saving Habit
As the article “Planning for Retirement Through Life’s Changes” says, the sooner you get on track with retirement planning, the better off you’ll be. That includes getting into the savings habit as early as you can.
In addition to your retirement plan, savings can make all the difference in your retirement years.
Research different savings accounts so you can choose the one that will give you the biggest yield when the time to retire rolls around.
Explore Additional Income Avenues
Retirement plans and savings are the backbone of a secure retirement, but don’t forget to look into other income avenues.
For example, could you start investing now?
Do some thorough research first and see if investing is the way to go for you.
You might also consider whether you’d be willing to work part time after you retire, to keep your bank account topped up.
It’s never too early to start planning your retirement.
Start now and you’ll reap the rewards when the time comes to hang up your self-employed hat.
Photo credit: BigStockPhoto.com
About the Author: Tristan Anwyn writes on a variety of topics including social media, how to build customer relationships, content marketing and how to prepare for retirement.