Independent Contractors, Solopreneurs, and Freelancers Need To Create A Successful Retirement Portfolio Now

Weekly Sunday Thoughts: May 17, 2020, 9:11 PM EDT

This week I want to discuss why it is crucial for independent contractors, solopreneurs, and freelancers to start thinking about building a retirement portfolio sooner. The joy of youth is magical. When one is young, the world seems to be this golden kingdom that will never end. It has been decades, but I certainly did not think too hard about growing older or even getting old when I was younger. I thought I would have fun being carefree, living life on the edge, and being reckless forever. As time sits in and one begins to understand that time does not stand still for anyone, then one quickly realizes that having a solid plan of action when one gets old is necessary and a critical and essential component of building a successful portfolio.

Fomichenko (n.d.) explains it best by citing how independent contractors, solopreneurs, and freelancers come with their own set of challenges and benefits. More importantly, these specific groups are representing nearly 54 million Americans who fall under one of those groups. According to a recent study conducted by the Freelancers Union and Upwork, more Americans are entering into these careers. Fomichenko (n.d.) outlines how with the freedom of being one’s boss, the biggest and sweetest rewards come from the fact that 60% of these freelancers are making more money than their traditional employment income.

Being one’s boss has its rewards, but it also presents its unique challenges. Building an excellent retirement portfolio is one of the biggest challenges faced by these groups. The advantage of having a company one works for already having a 401-retirement plan set up is out of the window. The statement means that independent contractors, solopreneurs, and freelancers must do all the leg work of building a successful retirement portfolio. Fomichenko (n.d) expounds on why these groups have a hard time developing a retirement portfolio. This scenario includes unpredictable income, not having a steady stream flow of monies coming in daily, to unfavorable retirement plans. The bottom line is that solo retirement plans tend to be too expensive. In contrast, many independent contractors, solopreneurs, and freelancers said solo retirement plans for freelancers do not offer any good perks or incentives when one finally retires.

Based on my research, I think that the best retirement plan to start with is through Roth Contributions. Fomichenko (n.d) breaks down the key benefits of choosing this retirement plan.  It is the fact that for any individual who is planning to make after-tax contributions, a Roth Solo 401k plan gives the investor the option of allowing after-tax contributions. The investor can contribute up to $24,000 to your Roth savings plan.  Imagine if one can save a set amount of money in their retirement plan for the next 10 to 25 years, that investors would have a nice cushion for when he or she decides to retire. The added benefit is the awesomeness of paying the taxes upfront, which allows for the investor’s distributions to be taxed-free, provided the investor abides by all the IRS regulations.

– Isaac Davis, Jr., MBA, HIFE CCP, The Small Business Guru


Fomichenko, D. (n.d.). How freelancers in america are keeping up with their retirement preparation. Retrieved from

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