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So you’re living the dream. You finally ditched the 9 to 5 job and have arrived in the heady land of the self-employed. You’re making your schedule around what works for you. You finally have the ability to structure your time so you can do what’s important and makes you happy. But do you know how to make that dream last?
Healthcare- the Dos and Don’ts
With most full-time jobs your employer will provide some kind of health insurance benefits. However, when you’re self employed you are the employer. So what should you know when shopping for health insurance? There are a number of health insurance policies available for the self-employed, but there are a few things you need to double check before making your final decision. Things like co-pays, the amount of your deductible, prescription costs, and pre existing condition clauses all factor into how good a plan is going to be for you. If it all seems too overwhelming there are websites that can help you figure out the best coverage for you.
The Retirement Fund
The 401k is the standard if you’ve got a full-time job with an employer; however, if you’re self-employed that’s often not an option. Fortunately there are a number of ways to save for your retirement without paying into the mighty 401k. The most common type of personal investment for retirement is the IRA, or individual retirement account. Although there are limits on how much you can pay into this type of account every year, it’s still a good place to start. If you’re planning on funding your retirement entirely on your own though, investing in stocks, bonds, and mutual funds in a diversified manner can also be a great idea.
Once you’ve got a plan for saving, it’s just as important to create a rough budget for how you might spend your money in retirement. Unexpected expenses can quickly add up, so thinking ahead about potential needs is crucial. For example, health care costs tend to rise as we age, and you may need to factor in services like a home care agency Harrisburg (or another local area) if you require assistance with daily living in the future. Similarly, home maintenance expenses-like replacing a roof or upgrading accessibility features-can sometimes come out of nowhere. By mapping out potential costs like these ahead of time, you’ll have a better idea of what your savings need to cover and can adjust your plan accordingly.
Taxes
Tax season is fun for almost no one, but it doesn’t have to be panic inducing either. Good bookkeeping is key here. The self-employed often have money coming in from many different sources, so organization with the paperwork will save you a ton of stress and headaches come April. There are plenty of software options that not only help you keep track of where the money’s coming from, but also to make sure that you set aside enough to cover taxes. One of the key benefits of tax software is its ability to simplify complex tax calculations by automating tasks like deductions, credits, and income reporting.
Managing taxes on your own can be overwhelming, especially with ever-changing tax laws and regulations. Consulting a financial advisor and tax consultant can simplify the process by helping you understand your tax obligations and identify potential deductions or credits you may have missed. These professionals can assist with tax planning, ensuring you file accurately while minimizing your tax liabilities.
Keep on Going
Whatever you decide to do about the specifics of keeping your dream alive, the most important thing is to have a plan and to stick to it. There are enough options out there for health care coverage, retirement savings and taxes that, with a little research, you should be able to come up with a plan that is just right for you so that you can keep living your own dream come true.
