- Your retirement savings may not be enough
- A Solo 401(k) plan can help you if you have a side gig or are self-employed
- Saving for retirement should start early
A lot of newsprint lately has been written, talking about how many do not have adequate savings for their retirement. While there are multiple reasons why this is happening, it’s important to take action so that your savings are not left in the dust when it comes to your own retirement.
Retirement Savings and You, Pensions and 401(k)s
Years ago, before Americans began leaving jobs/getting let go in record numbers, a good pension was a selling point for retainment, and for solidifying money to take care of you when you retired. As companies decided their employees deserved less and less, many of these perks went away, pensions included.
This led to the creation of the 401(k) account, so that Americans could still save at a job, and also take that money with them when they moved corporations. Many people who are employees of large companies have an IRA or 401(k) to save for retirement, using an organized plan set up by the corporation that they work for. They have regular deductions taken out of their paychecks, at specific intervals. These account are traditional, and make traditional investments in stocks, bonds, mutual funds, etc. And while there is great value in making certain preparations for retirement are being made, with the current unrest and volatility it may make sense to diversify portfolios to encompass a broader range of options.
Retirement Savings and You and Solo 401(k) Accounts
Additionally, there is a Solo 401(k) which can help solopreneurs and the self-employed. A Solo 401k is a retirement plan specifically created for self-employed individuals without any full time employees other than a spouse. It lets a business owner save for retirement and invest in their future without being part of a larger corporation. For small business owners, LLC holders, contractors and consultants, this can be a huge win when it comes to retirement savings.
While there does not have to be a profit for the business each year, there must be a clear profit motive, demonstrated by the business owners’ intent to increase business income. The amount of available monies able to be invested is across 401k accounts, per person, and not per plan.
You And Your Retirement
Your retirement savings and you make up a personal pair. It’s important to know what your own limitations and successes are when it comes to money. Maybe you make investments and profits like a fiend, and want to continue that into the future. Or maybe you tried your hand at real estate flipping and found it a completely overwhelming disaster. Everyone has different strengths and weaknesses when it comes to money.
If you feel like your 401(k) isn’t enough, what can you do? If you’re lucky enough to have that sidehustle, you can begin your Solo 401(k) and direct your own investments. So if you tried flipping houses and it not only gave you a thrill but also made you a profit, it’s something to consider.