Planning for Retirement while Self Employed

In today’s economy, planning for retirement is the most important subject to tackle early on, especially when working for one’s self. However if you are employed and you don’t have a retirement plan, you’re not alone. According to Icon, 81 million United States Residents do not currently have a retirement plan. Moreover, 36% of the workforce have never had a retirement plan. So, it’s time to stop feeling guilty or insecure if you do not have a retirement plan.

The remedy is simple and something you can do in a few days or few minutes depending on which option fits your needs. Now is probably the right time to mention that I am not now, nor have I ever been a financial advisor. However, I do work for myself and have been self-employed since 2002, so I do have some experience in what works for me.

There is really one question you’ll need to ask yourself to get started: Are you the type of person who prefers that other people handle your finances, or are you the type of person who would prefer to handle them on your own?

For those of you who would prefer to allow someone else to handle their retirement account, check out this post on Nerdwallet which will walk you through the steps you need to start an IRA (Individual Retirement Account) for yourself that a reputable agency will manage for you.

If you are the second type of person, you’re in good company and I’d love to share how I started saving for my retirement in my 20s and what tools I use now.

Before Apps were a thing, I found myself running a small business with the desire to set aside money for retirement early. I started out by setting aside $5.00 a week to a personal savings account and let it sit there collecting interest. Maybe not the best way to go about doing it, but it was something that worked for me at the time. The point to this is that you are setting aside what you can afford and it’s a great plan as long as you set aside something.

To get the most out of an IRA, like tax-free income and percentage matching and higher yields, there are some great Apps geared toward financial security. Not only can you set aside your money, but you can get percentages matched and invest it at the same time all by yourself. And that’s the route I use.

Robinhood makes all of this super simple and trust me, it’s not just for those trying to get-rich-quick by investing in the latest cryptocurrency. Robinhood is a surprisingly sound, user-friendly, way to invest money and they recently rolled out a new feature where users can invest in an IRA account. Setting up an account is quick and easy either by using their website or by downloading the app to your phone and going from there.

All you have to do is join Robinhood, set up a retirement account, and set a certain amount (can be as low as $1.00) to transfer to your retirement account each week, two weeks, month, or however often you feel comfortable. All you need is your bank information, the same information you need for direct deposits.

Robinhood will match 1% of all of the money you invest up to $6,500.00 which is the current amount you can put in each year of UNTAXED income. That’s right: you don’t pay taxes on IRA investments up to $6,500 a year (this price changes with inflation, but it’s always going up, not down).

Once you have a Retirement account and funds to invest, you can answer a questionnaire designed by Robinhood that will automatically invest in the best options based on your current needs. You can update this periodically, set up recurring investments based on your profile, or invest in options yourself. If you’re like me, you might do a bit of both.

If you want to bypass the questionnaire and find options to invest in yourself, make sure to do some research to help diversify your portfolio. There are plenty of great resources online that can help guide you to which stocks are the best to invest in.

Now that you know how to set up a Retirement account for yourself, you can get started now! If you use the link below, you’ll even get free stock! Plus you’ll be helping me out, too, as I will also get a free stock for everyone who signs up using my button and, let’s face it, another important part of working for yourself is finding ways to earn residual income which I’ll talk about in my next post!

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