One of the biggest benefits offered by big companies today is the retirement savings plan.  Whether your employer offers a 401(k) or another type of retirement savings plan, and whether or not they match your contributions, this benefit is a huge help to anyone who is saving for retirement.

Although there are many advantages to being self-employed, losing this benefit is a definite drawback.  Luckily, there are some retirement savings plans available for the self-employed, as laid out in the thorough article I’ve linked to.

Basically, here are the retirement plans the article covers:

• SEP IRAs – “Simplified Employee Pensions,” this savings plan allows you to make tax-deductible contributions.  Limits are 20 percent of your self-employment income, or $45,000 — higher than the contributions normal employees can make to their IRAs.
• Keogh Plans – Similar to the SEP, but more like a corporate retirement plan.
• Solo 401(k) – Intended for freelancers and others who work “solo,” this plan allows you to save more than a traditional 401(k) would.  Contributions are tax deductible.
• Roth IRA – To be used in addition to one of the above plans, contributions to this plan are NOT tax deductible, but on the flip side that also means that withdrawals won’t be taxed.

Growing old is expensive.  Not only do you have to worry about supporting yourself, but you also have to plan for medical care and related expenses such as stair lifts and lift recliners for your home.  If you are self-employed, don’t make the all-too-common mistake of neglecting your retirement — read this article on retirement options for the self-employed, and start saving for your retirement today!

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