Retirement Saving For Freelancers

Retirement Saving For Freelancers

Whether you’re a freelance writer, designer, musician, or some other self-employed professional, it’s a good idea to put some money away for your future self. Planning for retirement can be daunting, but with the right tools and a good plan, it’s much simpler than you’d think. If you think it’s too late to start this simple process, you’re wrong. Like the Chinese proverb says, “The best time to plant a tree was 20 years ago. The second best time is now.” Here’s how you can start saving today...

1. Use The Right Tool

I’ve started using a simple app called Betterment for all of my long term saving needs. This type of app is called a robo-broker. It’s basically a program that automatically allocates your investments into different stocks and bonds, which earn you interest and dividends over time. Betterment chooses the best allocations for each account type. For instance, I have a savings account that I plan to use for my student loans in a couple years and an IRA that I plan to withdraw at retirement age. Betterment chooses what percentage of stocks and bonds arere best for my future plans, so I don’t have to worry about it.

Setup is easy, and the first six months are completely free. After that, the charges for use are the cheapest in the industry, and there’s a great referral program to help you earn free usage of Betterment.

2. Make Saving a Habit

According to Joshua Fields Millburn at theminimalists.com, habitual deposits into your IRA are the key to long-term wealth.

“It sounds too good to be true, but the math proves otherwise: a 25-year-old who sets aside only $23 per week will retire with more than a million dollars if the money is invested properly.”

Betterment helps you invest your money properly, and they even make it easy to setup auto-deposits so that you don’t have to even lift a finger to invest in your future. Even if you’re over 25, the investment calculator on Betterment’s website allows you to adjust your auto-deposit to the right number to reach your retirement goals.

3. Let It Be

It’s important to not watch your investment account to closely. If the market drops, that’s a horrible time to get afraid and pull out of the market. That’s how you lose money. Millburn offers even more insight on steady market growth.

The stock market has proven to be the best way to grow your retirement savings: over the last 25 years, including 2008’s steep decline and subsequent Great Recession, the market has averaged a rate of return of nearly 11%. Even when you account for 1929’s Great Depression, the market has averaged greater than 9% growth over the past 100 years”

While it’s tempting to constantly check on how your money is doing, you have to remember that the stock market has proven its ability to not only recover but steadily grow over time. If you don’t believe me, that’s fine, but these screenshots of my earnings show otherwise. 

So, what are you waiting for?

Streaks - Building Creative Habits

Streaks - Building Creative Habits

Write Better: 3 Tips for Anyone

Write Better: 3 Tips for Anyone

0