The latest statistics confirm that traditional offices are on the way out. In fact, there are already 15 million freelancers in India. The only country that currently has more freelancers is the United States. Across the globe, these numbers are projected to rise as traditional forms of employment (e.g. consistent paycheck, one employer) begin to dwindle.
While the laptop lifestyle has many significant benefits, it also has several big obstacles. One hurdle that contract employees are learning to face is saving for retirement. In conventional roles, many employers match retirement contributions and offer free advice from financial advisers, making it easier to save for the future. If you are a freelancer who is looking to successfully save for retirement, the following strategies can be helpful.
Answer important questions about your retirement
Creating a plan for your retirement starts with knowing the answers to some crucial questions. Even though you are likely doing work that you are passionate about, there will come a time where you may need to reduce your workload. Depending on your circumstances, there may even come a day where you are required to stop doing what you do today. Even if you don’t want to retire, it is crucial to plan for the future. Ask yourself at what age you could see yourself reducing your workload, what you’d like to do in the future personally (e.g. travel, pay for the education of your children or grandchildren), and how much you need to live off of. Having some kind of answer to each of these questions will allow you to plan properly for these goals.
Work with a financial planner to determine which options are best for you
Since every person has a unique financial situation, there is no such thing as a one-size-fits-all retirement savings recommendation. That’s why it is important to work with a financial professional to help determine your next steps based on your goals. From your current spending habits to opening a personal retirement plan, a trained financial adviser will be able to make solid recommendations for your future. These individuals can also adjust their advice in the event that your plans for the future change.
Automate your savings
If you are someone who has a difficult time saving for the future, it is best to automate your savings. This is especially true for your retirement savings. If your plan or savings account provides the option, opt for automatic deductions to be taken out of your checking account on a weekly, bi-weekly, or monthly basis. Rather than making the decision to save, or to put your money into your latest freelancing project, you can ensure that you stay on track with your retirement goals.
While there aren’t as many perks to investing for retirement as a freelancer, it is still critical to plan for the future. By writing down your goals, working with a financial adviser, and automating your savings, you will be able to protect your future financials.