It’s easy to think that self-employed people have less access to retirement benefits than their salaried counterparts. Yet, self-employment has more account options to consider.
Salaried workers may be eligible to participate in their company’s 401(k) retirement savings program. And if neither works, you can always open an IRA or a Roth IRA, but that’s about it.
If you save too much for retirement, you may need more cash in the short term because your funds are locked up in your retirement accounts. Your savings could be reduced if you remove the money before retirement due to penalties or taxes.
Individual retirement accounts, or IRAs, allow you to grow your money tax-free and can significantly boost your retirement assets. Maybe you’ve already set up an IRA for yourself. If you haven’t, you should speak with a financial counselor or conduct your own research to discover how you may get started.
The yearly contribution deadline is normally the same as the tax deadline for the year in question. For example, the 2022 IRA contribution deadline is April 18th, 2023.