4 Important Retirement Considerations for the Self-Employed
Posted on: 03 September 2014 by Lindsay Edwards
Everyone dreams of not having to work some day, even the work-obsessed self-employed look forward to a time when the alarm clock doesn’t command them to duty at 7am Monday-Friday.
It sounds so easy. But people who are self-employed may find it a bit more challenging, because they don’t have an employer helping plan their retirement. That’s why it’s important for those who work for themselves to start thinking about retirement and finding out about their options as soon as possible. To help you get started, here are 4 important retirement considerations for self-employed workers.
Type of Pension Plan
Just like those who work for companies, the self-employed have a number of options when it comes to retirement plans. You are entitled to the basic state pension, which is currently set at £113.10 per week. However, the amount you will receive might not be enough, according to a recent article on Randstad Business. Do some research and speak to a professional on the type of pension plan you will need to achieve your retirement goals.
How Much Will You Need to Retire?
Before you can start a retirement fund, you should think about how much you need to retire and how many years you will need it for. Calculating how much you’ll need for retirement is a must, because it will guide you in how to shape your retirement plan. How aggressive or conservative your investment strategy needs to be is among the most important factors to consider.
Start-up and Investment Cost of Retirement Plan
Some retirement plans are expensive to start. Not only that, but some plans require a regular investment. Analyse your earnings to see if you can afford the plan(s) that you have your eye on. Everyone has to do this, but it is even more important you analyse this since you are taking care of your own income.
Longevity of Chosen Plan
When can you cash in the plan? Some plans charge a fee if you make an early withdrawal. Make sure you get the details on when you can withdraw from your plan.
Retirement for the self-employed can be a very daunting prospect. There is more work to do and usually even more to consider. However, if you take the time to talk to professionals and do your research, you should have nothing to fear.