Working as a freelance writer has many advantages. As a freelancer, you may be able to make your own work schedule, be picky about the projects you work on, and work remotely when you want. But there are also some downsides to being a freelancer, and most of those are related to financial benefits. As a freelancer, you probably don’t have access to a retirement plan with employer contributions, which means you’re responsible for saving for retirement on your own. Fortunately, there are options for those who are solely responsible for investing and saving for their retirement.
Choosing the right method of savings
While freelancers may not be able to take advantage of a traditional retirement savings plan, there are other ways to prepare for life after retiring. A financial planner can be a great source of information to help you decide how much you want to save and how much you can afford to put back each month. They can also help you choose the right types of investments based on your comfort level when it comes to choosing a safe or risky investment strategy.
Types of long-term investment accounts
As a freelancer, a traditional 401(k) is not an option for retirement, but there are other ways to save. An IRA is a good option for many people and these types of savings accounts often have tax benefits where you get a tax break upfront, or you are allowed tax-free withdrawals. Terms of these types of accounts vary widely so it’s important to compare them based on your income, the amount you plan to contribute, and the specific terms of each plan to see which one is the best option. Freelancers may also have the option to invest in a self-employed 401(k) which can be beneficial for those who only employ themselves, or themselves and their spouse.
Investing your money in a long-term account can help you feel comfortable that you can provide for yourself once you retire. Freelance writers may not have the same options for retirement savings as those employed by others, but there are still ways you can save for the future. If you’re concerned about investing for retirement, talking to a financial planner can help you understand your options.