Self-employed? How to save for retirement

Autonomy, flexibility and job satisfaction are all great advantages of being self-employed or running your own business.

But a structured retirement plan is not.

That means you'll need to put one together on your own.

The first step is to ask yourself some basic questions, according to Robert Steen, USAA Director for Retirement Advice.

• What's your goal for the plan? Is it for your own benefit? For employee retention? Do you want it to benefit a few key employees or all employees?
• How much are you able or willing to defer into the plan?
• Are you willing to provide employer contributions or matches?
• How stable are your earnings in order to sustain contributions?
• Will you need to borrow from the plan?
• Is your payroll heavily weighted to just a few highly compensated employees?
• How much complexity, administration and reporting are you willing to endure?

Once you've thought about those questions, seek counsel from your certified public accountant, tax attorney or financial advisor. Since there are several types of small business retirement plans to choose from, a good starting point for guidance is at the IRS: Small Business Retirement Plan Resources.^{See note1}

Each plan has different details, and you'll need to do a little math if you decide to combine them. Seek advice from an expert to make sure you choose the right vehicle for your needs.

For many employees, that promise of matching contributions, or free money, is a powerful incentive to save. Automatic payroll deduction can also be a valuable employer-provided perk.

Choosing a retirement plan wisely can help ensure you don't sacrifice your retirement for the satisfaction of being your own boss. Look for a plan you can fund consistently, and remember the sooner you start, the better.