According to a survey by the Freelancer’s Union, 57.3 million Americans, 36% of the workforce, were self-employed in 2017. Self-employed workers do not receive employer-sponsored benefits unless they become self-employed. into employers and hire full-time workers. , making employers and employees eligible for sponsored benefits.

Otherwise, self-employed workers receive no paid sick, holiday or vacation leave and no employer co-sponsored health insurance or retirement benefits. Along with the self-employed, there are millions who work part-time in a traditional job and also don’t receive employer-sponsored benefits.

Consider retirement, one of two benefits that workers can self-fund (along with health insurance). If finances allow you to set aside money to live on when you’re too old to work, you’d be wise to do so.

Examine your spending patterns. What are you spending on items you want, but don’t need? I don’t recommend that you deny yourself all perks, we deserve little luxuries from time to time, but perhaps some expenses could be cut and those funds redirected to savings.

Budgeting for a limited income is hard. Even full-time workers have insufficient funds for their retirement accounts, despite matching contributions. Salaries have been stagnant for 30 years and living expenses are only increasing. Many cannot accumulate savings. Some apply what they can save to buy a home, rather than retire. They take a different view of long-term financial planning.

According to the Economic Policy Institute, the median retirement savings for Americans ages 55 to 61 was $163,577 in 2017. Social Security payments help, but on average cover only 40% of monthly expenses. As of December 31, 2017, the average monthly payment for retirees age 62 is $1,112; retirees age 66 receive $1,383; and at age 66, retirees receive $1,578.

The retirement landscape in the US is one of impending national emergency and national embarrassment. The corporate governance laws enacted during the Reagan, Clinton, and Bush (Jr.) administrations brought us globalization and the transfer of high-paying jobs to other countries, and in doing so created the crisis. The ability of many citizens to earn a comfortable living through employment in jobs that pay benefits has been destroyed.

The computer age hasn’t done you any favors, either. So now you can play Snapchat on your Android while on break from your $12/hour job. There is technology that has advanced in many fields. But are those advances worth the livelihood of millions? That is a question for ethicists.

If possible, start a retirement account. Here are two options for Solopreneurs and part-time employees:

myRA is an initial retirement account created by the Treasury Department. There is no charge to open an account and you decide how much to contribute each month. Automatic withdrawal contributions can be made through your bank account or paycheck.

If you change jobs, your myRA account is not affected. If you withdraw money from the account, there is no financial penalty. myRA is funded by after tax entry. The maximum annual myRA contribution is $5,500 and $6,500 for those age 50 and older. The maximum amount that can be held in myRA is $15,000. Once the $15,000 limit is reached (or sooner, for that matter), the balance can be transferred to a traditional retirement account. https://myra.gov

Self-Employed 401(k) Profit Sharing Plan (Only 401[k]) is financed with before taxes dollars You can make contributions both as an employer (because you are self-employed) or as an employee (because you are employed by your sole proprietorship or a one-person LLC entity). Using your employer hat, a contribution can be up to 25% of annual net profit, or $33,000 ($39,000 if you’re 50 or older) per year. A second contribution of a maximum of $18,000 per year ($24,000 per year for those age 50 and older) can be made while wearing your employee hat.

Better yet, your spouse can be hired as an employee under this plan and he/she can contribute the same way you do, which means your spouse can also contribute up to $53,000 ($59,000 if age 50 or older) per year . Open your Solo 401(k) account by December 31 and make a tax-deductible contribution this year.

Thank you for reading,

kim