Retirement Planning For Self-Employed People
Planning for retirement can be very difficult when you're self-employed and your income tends to fluctuate from month to month and year to year.
It's hard to know how much money you can afford to invest in your retirement each month, because you often feel like you don't have any extra money available once all the bills are paid. You are probably cautious with your money because your income isn't ever guaranteed, so you want to be sure you have reserves in case your business slows down for a period of time. You know that you need to put money away for your retirement but how? It doesn't have to be stressful. |
One thing to remember is that it's important to start financial planning for your retirement as soon as possible. Even if you can't contribute a lot of money each month, through the power of compounding, the more time your money sits in investments, the larger the balance will grow.
So even putting a small amount away each month will help greatly.
Most people think of Registered Retirement Savings Plans (RRSP's) when they think about retirement planning.
RRSP's are a great tool to grow your money for when you retire, but they aren't the only tool.
The money invested in RRSP's can't be withdrawn without paying tax. This can be scary for self-employed people because it means that they can't easily retrieve that money if they need it for unexpected expenses.
An alternative to consider in this case would be a Tax Free Savings Account (TFSA). The money contributed into a TFSA can be invested just like an RRSP, but the funds can be withdrawn at anytime without having to pay tax on it.
Of course, there are details to the RRSP and TFSA programs that you'll need to discuss with our team before you decide if it's right for you, but this is just one of many strategies that can work well with self-employed individuals.
Our Financial Planners are ready to chat with you about your options anytime.
The sooner you get started, the sooner you can retire!
So even putting a small amount away each month will help greatly.
Most people think of Registered Retirement Savings Plans (RRSP's) when they think about retirement planning.
RRSP's are a great tool to grow your money for when you retire, but they aren't the only tool.
The money invested in RRSP's can't be withdrawn without paying tax. This can be scary for self-employed people because it means that they can't easily retrieve that money if they need it for unexpected expenses.
An alternative to consider in this case would be a Tax Free Savings Account (TFSA). The money contributed into a TFSA can be invested just like an RRSP, but the funds can be withdrawn at anytime without having to pay tax on it.
Of course, there are details to the RRSP and TFSA programs that you'll need to discuss with our team before you decide if it's right for you, but this is just one of many strategies that can work well with self-employed individuals.
Our Financial Planners are ready to chat with you about your options anytime.
The sooner you get started, the sooner you can retire!