Retirement challenges for the self-employed
More Americans than ever are running their own businesses, but most don't think they're saving enough for retirement.
An online survey by the National Association of the Self-Employed found that 57% of those who participated said they were not confident about their retirement savings. While half of the more than 400 respondents said they save for retirement, nearly 20 percent do not or are not able to. Furthermore, 28% have no retirement savings, and nearly the same number have less than $15,000. I wouldn't call an online survey on a website an accurate way to gauge the financial condition of millions of small business owners, but I believe the results do indicate that this is an issue for many of self-employed people.
What's the problem? Certainly, the difficulties with getting a new business off the ground are a factor. Many will not turn a profit for a few years, if ever, so keeping the company afloat, investing revenue in growing the business, and paying bottom-line costs and the owner's living expenses take priority. There are retirement accounts for small businesses which correspond to "normal" workplace accounts -- SEP IRA, Simple IRA, etc. -- but what's the point of opening this type of account if there is zero extra cash to put into it?
The NASE website, incidentally, has resources for people who are running their own businesses, ranging from advice on health insurance and taxes to shipping discounts. Find out more on NASE's benefits page.
The My Personal Finance Journey blog also has a related post about self-employed 401(k) brokerage accounts.
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