57% of Freelancers Are Worried About Their Financial Future. Here’s What to Do if You’re One of Them
In fact, only 43% of freelancers are confident about their overall financial future, according to an Ipsos Marketing study commissioned by
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1. Start saving immediately
We're told we're supposed to save 15% or more of our income for the future, but that's hard to do when your earnings aren't stable. But if you make a point of setting aside a small amount of money each month, it'll eventually make a huge difference for your nest egg. Check out the following table, which shows how much you might accumulate by socking away just
If You Start Saving
Here's What You'll Have by Age 70 (Assumes an 8% Average Annual Return):
25
30
35
40
45
50
55
TABLE AND CALCULATIONS BY AUTHOR.
As you can see, if you're still relatively young, that
2. Invest your savings wisely
Saving money is only part of establishing a strong nest egg. If you want to set yourself up for a secure future, you'll need to invest your savings in a manner that allows your money to grow. And in this regard, stocks are your friend. Though the stock market is pretty volatile, it has historically delivered higher returns than the bond market, and if you have a relatively lengthy savings window ahead of you (meaning 10 years or more), it pays to go heavy on stocks for better long-term results.
In fact, the 8% return referenced above is actually just below the stock market's average. But if you were to invest in safer vehicles, like bonds, and snag just a 3% average annual return instead of an 8% return, you'd wind up with only
3. Find the right home for your savings
As a freelancer, you have several retirement plan options available to you. First, you can go with a traditional IRA, which will let you contribute up to
If you think you'll manage to save more than
No matter which retirement plan option you choose, the key is to start saving in it as soon as possible and invest your savings in a manner that will fuel your nest egg's growth. Just because you're a freelancer doesn't mean you don't deserve a secure financial future, and if you commit to funding your retirement now, you'll most likely get to enjoy it without stress later on.
The
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "
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