Being Your Own Boss May Seem Like a Dream Come True But Self-Employed Workers All Over The Country Have This Serious Financial Problem
Working for an employer and working for one’s self both have their own set of perks and downsides. However, the latter might be put at a financial disadvantage in the future by certain habits they’re neglecting to practice today.
Not Saving Enough
According to a report from the Transamerica Center for Retirement Studies (TCRS), a lot of self-employed people are not saving enough money now to live comfortably once they retire. Only a little more than half of those surveyed said they consistently set aside money for their eventual retirement with about 30% saving only from ‘time to time’. Even more concerning is that 15% of these people admitted that they don’t save at all.
Meanwhile, it was found that the median household savings for retirement for self-employed people stand at just $71,000. According to data from the Bureau of Labor Statistics, households run by someone 65 and older spend around $45,756 in a year alone. The TCRS study surveyed 6,000 Americans, 800 of whom are self-employed.
While even regularly employed people still face somewhat similar problems, they do have the fallback of having a workplace 401(k) plan. Fortunately, people who work for themselves can have something like this by setting up an Individual Retirement Account (IRA) and put money into that as well.
A Portrait of the Self-Employed Population
The TCRS’ report also shed light on the American self-employed population. Apparently, the segment represents a variety of work arrangements and demographic characteristics. What more, their reasons for being self-employed are also varied.
Six out of 10 of them are men and a little over half are age 50 or older. Meanwhile, less than half of the people who work for themselves are college graduates. It’s worth noting though that almost 30% did attend college or trade school.
Aside from not saving enough, self-employed people also make the mistake of expecting to retire later than what is actually happening in real life. About 70% of this segment of workers plan on retiring at 65 years old or not retire altogether.
However, four out of ten American workers actually find themselves retiring earlier than they anticipated because of unforeseen reasons. Some of the most common causes of unexpected early retirement are disability or health problems and experiencing changes and downsizing at work. All these said self-employed people aren’t prepared to handle these added risks. According to TCRS, not even have of them have life insurance and only 23% have disability insurance to protect themselves from the consequences of being unable to work due to a disability.
More in Pocket Change
New McLaren Sports Series Hybrid Seen in Production Bodywork
Although the camouflage is quite heavy, one can clearly see that the new McLaren prototype is going to follow the tract...April 22, 2020
A Noob’s Duide to Investing in a Bear Market
If you looked closely at the stock movements these days, there is a question that you might ask. The bear market...April 21, 2020
Want to Save More During the Crisis? These Are the Expenses You Should Give up ASAP
Due to the aftermath of the coronavirus pandemic, the economy has reportedly gone into a recession. That, paired with the sudden...April 21, 2020
Is The CARES Act Making Everyone Happy? Here’s What Many Have to Say
Almost 3 million people who own their own houses have benefitted from a program that has been designed to provide assistance...April 21, 2020
How are Italian Brands Coping with the Impact of Coronavirus and What are Their Plans?
During the initial lockdown period, the Italian designing industry was conducting business as usual as the office workers were conducting meetings...April 16, 2020
How Italian Design Brands Are Handling The Devastating Effects Of Coronavirus
The ongoing coronavirus pandemic has ravaged countries all across the globe and has severely affected Italy. With a reported 168,941 confirmed...April 15, 2020
Reese Witherspoon Finally Sold Off Her Pacific Palisades Home for $17M
American actress, producer, and entrepreneur Reese Witherspoon and her husband, Jim Toth, have finally found a buyer for their elegant Pacific...April 14, 2020
How will the Post COVID-19 Environment Affect the Baby Boomers Financially?
Everyone is hoping that soon the economy will be back on track, and COVID-19 will be curbed. Although the hope is...April 14, 2020
What Americans Can Expect From The Pandemic Unemployment Assistance Program
The United States government recently passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This act increased the unemployment insurance...April 8, 2020