3 tips to save for retirement all self-employed people must know

September 23, 2014

When you work for yourself, retirement planning for your later years is essential. To help, here are three money-saving tips all self-employed people must know.
Do you like your independent employment lifestyle? Are you the happiest you’ve ever been running your own bakery? You can still build a secure fund for your later years with thesethree tips to save for retirement every self-employed person must know.

1. Meet with a retirement planning adviser

You can set up your own retirement plan. If you already prepare your own taxes and keep detailed business records, you are ready to plan for your future financial health, too. But if you aren't sure which retirement plans are right for you, meet with a trusted adviser for more information.

3 tips to save for retirement all self-employed people must know

2. Pay into the Canada Pension Plan

If you are self-employed, you must pay into the Canada Pension Plan each year your net income is more than $3,500 until you are 70. Your contributions—minimum or maximum—give you CPP pension credits, just as if you were working for an employer.

3. Make regular contributions

You don’t need a huge stock portfolio to save for retirement. If you aren’t earning much, you can still have a safe, comfortable retirement that fits your lifestyle. Save a little for retirement each month to maximize your savings. Use these guidelines to help you:

  • $500 a year for 40 years in a registered retirement savings plan (RRSP) yields up to $77,000.
  • Tax-tree savings accounts (TFSA) are more accessible to lower-income savers.
  • $1,000 a year in a high-interest savings account can double in 30 years.

Do you run a storefront business and have employees? Do you work part-time from home? Do you have loans to pay off ? How old are you and how is your health? The answers to these questions may affect how you choose the best way to save for retirement. A certified financial adviser who knows your business, lifestyle and goals can help you choose your best options. Meet with one to discuss which available retirement plans for self-employed entrepreneurs will work best for you.

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