Information Courtesy of USAA | Date published: May 20, 2021. | 1.5 to 2 Minutes

Retirement is on most people’s mind, especially for those who are self-employed. Take a look at the differences and how to get started.
Self-employment has plenty of advantages, including autonomy, flexibility and job satisfaction.
But there are downsides too. One is that you won’t get a structured retirement plan, which many larger businesses offer employees.
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’s 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.
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.
But when you, as the employer, don’t enjoy those advantages yourself, it’s doubly important to be disciplined in your contributions, Steen adds.
Choosing a retirement plan wisely — and consistently funding it throughout your career — can help ensure you don’t sacrifice your retirement for the satisfaction of being your own boss.