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10 Retirement Planning Tips for the Self-Employed


It's rewarding to have your own business. But how do you save for retirement?  Jupiterimages/Creatas/Thinkstock
It's rewarding to have your own business. But how do you save for retirement? Jupiterimages/Creatas/Thinkstock

"I want to be my own boss." It sounds great, doesn't it? Making your own hours, calling all the shots, and succeeding or failing on your own terms. Those are a few of the compelling reasons why more and more Americans are self-employed.

The Internal Revenue Service (IRS) defines self-employed workers as:

  • Sole proprietors or independent contractors
  • Members of a partnership that carries on a business
  • Other folks who work for themselves, including part-time businesspeople

According to the National Association for the Self-Employed, 77.6 percent of small businesses in the United States are self-employed. And the Bureau of Labor Statistics counted 15.3 million Americans, or 10.9 percent of all workers, as self-employed in 2009 [source: Hipple].

But there are some distinct advantages to working for "The Man," too. A lot of companies offer health care coverage for both employees and their families, paid vacation time, and perhaps most important of all, a retirement plan. As a self-employed worker, you are responsible for finding (and funding) all of your benefits, including planning for retirement.

The good news is that there are several IRS-approved retirement plans for the self-employed. The bad news is that the IRS doesn't do "easy and straightforward," so you will have to do your homework to find the plan that's best for you and your business. Here are some tips, starting with an overview of the top three self-employment retirement options.


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