Saving for Retirement When Working from Home
Are you self-employed? If you are or even if you are a home based worker who is employed as a contractor for another company, you may be disappointed to learn that you are, essentially, on your own when it comes to retirement. Those who work from home are responsible for saving and setting up their own retirement accounts. Unfortunately, this leaves many men and women regretting their decision to work from home. Planning for retirement when working from home or when self-employed may seem like a long and hopeless process, but it doesn’t have to be. Even though you do not have a “traditional,” nine to five day job, you can still save and start preparing for your retirement. In fact, now is the best time to get started.
One of the first steps you will need to take involves determining how much money you will need for retirement. This can be difficult to do, but at least a rough estimate is advised. To estimate how much money you will need for retirement, examine your needs and goals. Where do you envision yourself in the future? Where do you want to live? What activities do you see yourself enjoying? It is important for you to answer these questions, as there is no way for you to meet your retirement goals if you don’t have any. Another way that you can go about planning and saving for your retirement, when working from home or when self-employed, is by creating a monthly budget.
Unfortunately, not all home based workers are raking in the money. Some moms work at home part-time and some offer services, such as web design and freelance writing, that are not needed on a regular schedule. If you are one of those individuals, a budget is a must have. Monthly budgets are advised, as our expenses tend to vary from month to month. When creating a budget, take your average monthly earnings and just start subtracting your expenses. If you are married, you will also want to include your husband or wife’s expenses as well. There is no reason why the two of you can’t help each other with creating a retirement savings plan. After all of the necessities have been added to your budget, such as your rent, mortgage, car loan, car insurance, food, gasoline, and utility bills, how much money is left? Take a percentage of that money or a set dollar amount each month and set it aside for your retirement years. Speaking of saving your money, many home based workers want to run on down to their local banks and open up a savings account. This is okay, but it, honestly, isn’t the best approach to take.
Instead, look for those that you can benefit from opening, like those that are considered tax-deferred accounts or programs. Individual Retirement Accounts (IRAs) are recommended, but SEP-IRA accounts are designed specifically for small business owners and the self-employed. It is also a wise idea to seek professional help. This help can come from a professional accountant or a professional financial advisor. It is best if you seek this professional help around the age of 40. This gives you enough time to make changes if your financial advisor thinks you do not have enough money for retirement saved. In fact, many home based workers and self-employed individuals wonder what happens when they don’t have enough money saved for retirement. If the time for you to retire arrives and you don’t believe that you can financially survive until you pass away, don’t quit working. Do not use this as a part of your plan, however. You should plan and save for your retirement with the goal you will stop working.
If you find yourself short on money, consider working part-time to make up the difference. If and when the time comes, you can also make additional changes, such as moving into a smaller home or relocating to a more affordable city or town. PPPPP Word Count 663 .