Self-employed? Start saving for retirement.

If you’re self-employed, retirement may be difficult to plan. When financial experts recommend setting aside 15-20% of your income toward retirement, it may be hard to plan for it because  as an independent contractor or small business owner, you know income is often sporadic. Many factors come into play on a monthly basis impacting your bottom line…clients don’t always pay on time; markets tend to move in cycles; seasonal fluctuations may pinch your company’s cash flow.

You also know bills need to be paid ‒ every month. Once you’ve settled up with suppliers, utility companies, lenders, and everyone else asking for your money, most of your remaining cash may need to be pumped back into the business to keep it up and running. Contributing to a retirement account can seem like a luxury you can’t afford.

You’re not alone. One recent study found that nearly 70% of America’s ten million self-employed workers aren’t saving regularly toward retirement.

Why aren’t you saving for retirement?

Some self-employed business owners expect to finance a secure retirement by selling their company at a profit. But according to the Small Business Administration, 50% of new businesses will fail within the first five years and two-thirds won’t make it to their tenth anniversary. Even if your company survives, the best-laid plans don’t always work out, and there’s no guarantee the proceeds from a sale will be sufficient to fund your retirement.

Look into possible options that fit your needs

Fortunately, several tax-advantaged retirement plan options are available. Some of these plans, such as the Simplified Employee Pension Plan, are easy to establish, and all offer tax-deferred savings and up-front tax breaks. Talk to an advisor and discuss what plan will work best for you, the key is to start saving now.

Report Changes to the Healthcare Marketplace as They Happen

The IRS reminds people who have insurance coverage through the Health Insurance Marketplace , that they are required to report changes to the Marketplace when they happen, like changes to your household income or family size, because they may affect  eligibility for the advance payments of the premium tax credits.

Changes in circumstances that you should report to the Marketplace include, but are not limited to:

  • increases or decreases in your household income, including lump sum payments like a lump sum payment of Social Security benefits
  • marriage or divorce
  • the birth or adoption of a child
  • starting a job with health insurance
  • gaining or losing your eligibility for other health care coverage
  • changing your residence

For the full list of changes you should report, visit HealthCare.gov.

Reporting changes will help you avoid getting too much or too little advance payment of the premium tax credit.  Getting too much means you may owe additional money or get a smaller refund when you file your taxes. Getting too little could mean missing premium assistance to reduce your monthly premiums.  Therefore, it is important that you report changes in circumstances that may have occurred since you signed up for your plan.