Saving for retirement is an important step in everybody’s life. Unfortunately, it is a step that is often overlooked by most freelancers. No matter where you are in your freelancing journey – whether you are just starting out or are a career veteran, you can start saving for retirement and building your nest egg, NOW. By following tips below, you can ensure that you will have enough money saved for retirement.
The first step is to get started. If you go through an online or contracting company, and the company offers a retirement plan, enroll in it immediately and start saving. If you are self-employed, enroll in a program at your local bank or choose an online Discover account that will allow you to set aside part of your earnings toward retirement. The general rule of thumb is that you should set aside ten percent of your earnings toward retirement. Depending on your needs and the length of time you have to save before you retire, you may be able to save more than ten percent.
Pay Down Debt
Reducing your short term debt can positively affect your credit score which will help you save more for retirement. Aggressively pay down debt by throwing any additional funds that are not earmarked for retirement at your debt. The popular snowball method touted by financial gurus like Dave Ramsey uses this principle to quickly reduce debt. When debt is paid off, use your freed up funds to add to your retirement savings. If you have a credit card or a store line of credit, pay it quickly to free up your retirement funds.
Earn Additional Income
Depending on your age and how long you have until retirement, you may have some catching up to do when it comes to savings. Earning just a few hundred extra dollars a month will go a long way in contributing to your retirement savings. Bring in extra cash by adding alternate skills to your freelance portfolio – example, if you are a writer, then pick up skills like ebook formatting or conversion to kindle format etc, and offer “package” services to your customers. Similarly, you can try to combine design skills with website setup services, writing + copywriting, social media + SEO etc. Even small amounts of money add up over time, and you will see your savings grow month after month.
Start Early and Save Less
The younger you are when you start saving for retirement, the less you have to save. While most teens don’t think about retirement, the high school years are a great time to start saving. Teach your teenagers about the value of investing for the future, and they will see their money go far.
When it comes to saving for retirement, the key is to just get started. Open a retirement account today, so that you can enjoy the retirement you would like when you are of age.