Self-employed individuals have the freedom to to work when and where they desire and do what they have always wanted to pursue. One disadvantage of self-employment over its traditional counterpart is the lack of employer-sponsored savings programs like 401(k)s or 403(b)s.
In order to be adequately prepared for retirement, entrepreneurs must take it upon themselves to have a funds in traditional savings and individual retirement accounts and stocks and bonds. This does not seem to be the case for most self-employed individuals, according to a survey conducted by TD Ameritrade, The online brokerage firm found that 40 percent of the self-employed were not saving enough, while another 28 percent had no money stored away at all.
In an interview with USA TODAY, Michael Piershale, president of Illinois-based Piershale Financial Group, said that small business owners often are not knowledgeable about their options for saving.
"Often they invest all their profit back in their business," Piershale told the publication. "They look at it as an alternative to a company retirement plan that might be invested in stocks or bonds. But the big danger is if your business goes under, you would have only Social Security."
He also suggested that entrepreneurs do the following to ensure that they have enough for retirement:
- Consider the advantages of investing in the stock market
- Find a systematic way to save
- Reduce debt
- Seek help from a financial advisor if you need it.
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Categories: Stock News