Our Blog

Resources to help you set your goals and meet your financial objectives.

Self-employed: Defying and Redefining Retirement

When asked “What does retirement mean to you?” the self-employed, see it as meaning retiring on their own terms, focusing on themselves, and even continuing to work.

Self-employed: Defying and Redefining Retirement

After surveying nearly six thousand American workers, in July 2019 the Transamerica Center for Retirement Studies (TCRS)[1] published a report - Self-Employed: Defying and Redefining Retirement (Select Findings from the 19th Annual Transamerica Retirement Survey of American Workers.)[2] I have many clients that are self-employed who have a different view of retirement compared to the traditional retirement strategy - stop work at 65. The TCRS report describes the self-employed view of retirement as follows:

“Self-employment brings both unique opportunities and challenges for saving, planning, and preparing for retirement. The self-employed often lack a steady paycheck with a regular stream of income. Without retirement benefits offered by an employer, the self-employed typically must take a do-it-yourself approach to retirement savings. At the same time, self-employment also brings greater freedom, the freedom to work -- and retire -- on one’s own terms.[3]

In this article, I highlight three key topics of the report - What is retirement? Some of the key findings of the report, and the report’s 10 recommendations for the self-employed to help them navigate and take advantage of opportunities available to them.

 What Is Retirement?

When asked “What does retirement mean to you?” the self-employed, see it as meaning retiring on their own terms, focusing on themselves, and even continuing to work. Here are some of their responses:

“Retirement to me means being able to cut back or discontinue entirely working secularly, and to have more time to pursue personal interests. In my personal experience, watching my grandmother retire, it meant her spending time doing a volunteer ministry and being able to travel more freely. – Woman, age 23.

To me, it just means continuing on with what I already do as an artist (fine arts & illustration) but more so it means that my husband will be able to retire and we’ll be able to travel and relax and do all the things we want to together because he is no longer tied down to a stressful job. – Woman, age 50.

I’m not sure it means anything, because I don’t plan to do it. If you love what you do, and are physically and mentally capable of doing it, why retire? – Woman, age 60.

Retirement doesn’t mean stop working to me. It means working exclusively on ME projects which might include any number of personal passion projects. – Man, age 35.

It is a word I do not use when referring to myself. I do not plan to retire as I enjoy working too much. As I own my own business, I can set my working hours. Retirement to me would mean having nothing constructive to do. – Woman, age 89.”[4]

Key Highlights - extracts from the survey
  • The self-employed are less likely than employed workers (72 percent) to be looking forward to retirement.
  • The self-employed (21 percent) are more likely than employed workers to dream of continuing to work in the same field, while employed workers are more likely to dream of pursuing an encore career or starting a business (13 percent both).
  • The self-employed and employed workers share similar health and financial-related retirement fears. However, the self-employed tend to be less fearful about retirement, especially as it relates to finances. The most often cited retirement fears include declining health that requires long-term care, outliving savings and investments and availability of social security benefits.
  • Almost Seven in 10 Expect to Retire After Age 65 or Not at All. Sixty-eight percent of the self-employed expect to retire after age 65, including 11 percent who expect to retire between age 66 and 69, 29 percent who expect to retire at age 70 or older, and 28 percent who do not plan to retire. Only 54 percent of employed workers expect to retire after age 65 or do not plan to retire.
  • Six in 10 Plan to Work in Retirement. Sixty-two percent of the self-employed plan to work after they retire, including 15 percent who plan to work full-time and 47 percent who plan to work part-time. Fewer employed workers (55 percent) plan to work after they retire.
  • Reasons for Working in Retirement Are Health and Financial. The most often cited reasons for doing so are to “be active” (59 percent), “keep my brain alert” (56 percent), “enjoy what I do” (54 percent), and “want the income” (54 percent). The self-employed (73 percent) are less likely than employed workers (80 percent) to cite financial reasons for working in retirement.
  • The majority of the self-employed have taken one or more proactive steps to help ensure they can continue working past age 65. Fifty-six percent are staying healthy, followed by 37 percent who are focused on keeping their job skills up to date and 30 percent who are performing well at their current job.

Unfettered by employers that can profoundly influence when and how they will retire, the self-employed have a strong vision of retiring on their own terms. Many intend to work beyond traditional retirement age, while others have no intention of ever retiring. They are more likely to do so for healthy aging-related reasons than financial reasons. However, many can be more proactive about taking steps that can help them continue working.

10 Recommendations for the Self-Employed

  1. Create a budget that includes income, living expenses, paying off debt, and financial goals such as building short-term savings and long-term retirement savings.
  1. Start saving early and get into the habit of saving consistently over time. If confronted with an irregular paycheck, save more during boom years and less during lean years.
  1. Learn about tax-advantaged retirement savings opportunities for the self-employed, including Traditional and Roth IRAs, SEP IRAs, SIMPLE IRAs, and Individual 401(k)s. If age 50 or older, learn about Catch-Up Contributions to 401(k)s, 403(b)s, and IRAs.
  1. Automate savings. One of the proven advantages of employer-sponsored retirement benefits is the convenience of payroll deduction. Set up an automatic funds transfer, for example, from a checking account to a savings or retirement account.
  1. Protect yourself from financial shocks that could disrupt your current situation and future retirement, by building emergency savings and considering insurance coverage (e.g., major medical, disability, life insurance, liability).
  1. Utilize government-sponsored retirement programs designed to help the self-employed save for retirement, such as making contributions to Social Security. Equally important is keeping up to date on paying your taxes.
  1. Develop a written retirement strategy that includes a budget and estimates retirement savings and income needs and addresses a broad range of factors. It should also include an exit strategy for one’s business and contingency plans if forced into retirement sooner than planned.
  1. Consider seeking help from a professional financial advisor. Retirement planning can be especially complicated for the self-employed. The self-employed are more likely than employed workers to have a wide variety of expected sources of retirement income. Some of these, such as investment property or the sale of a business, may be more difficult to convert into retirement income than more liquid assets, such as savings and investments held at a financial services firm or retirement plan provider.
  1. Take proactive steps to help ensure the ability to continue working and retire on your own terms. Keep your job skills up to date. Invest in training and skills development for yourself and those you employ. Meet new people and grow your network.
  1. Take good care of yourself and safeguard your health. Consider the long-term health implications when making lifestyle decisions today. Find appropriate healthcare coverage.

Next Step

The self-employed have a more proactive and less fearfull attitude towards retirement. They are aware of the key issues surrounding retirement, such as their health and adequate finances. At Boerum Hill Financial Advisors we want you to be able to retire with the confidence that you will have enough income to maintain your dignity and independence in retirement. We understand that funding retirement for the self-employed can be more complicated than the “regular” employee. If you want to partner with an advisor that can help you to get on the right track for retirement and build your confidence about the financial decisions you face especially retirement, I would be happy to sit down with you, at no obligation, and answer any questions you may have. Furthermore, if you have a Facebook account one of the best ways for this message to get to others is by simply “sharing” the post by using the Facebook icon below.

[1] The Transamerica Center for Retirement Studies (TCRS) is a division of Transamerica Institute®, a nonprofit, private foundation. TCRS is dedicated to conducting research and educating the American public on trends, issues, and opportunities related to saving, planning for, and achieving financial security in retirement.

[2] https://transamericacenter.org/docs/default-source/retirement-survey-of-workers/tcrs2019_sr_self-employed-retirement.pdf

[3] Ibid page 22

[4] Ibid page 11


  • Phone:
    (516) 695-1610
  • E-Mail:
    This email address is being protected from spambots. You need JavaScript enabled to view it.

Copyright © 2018 Boerum Hill Financial Advisors, LLC | Powered by AdvisorFlex