You’re self-employed and retirement is looming. How can you make sure you have enough money to live on?

1 Assess your current situation

The first step is to take stock of your current financial situation and your expected retirement needs. How much do you earn from your sustainable design business and other sources of income? How much do you spend on your living expenses, taxes, insurance, and business costs? How much do you save and invest for your future? How much do you need to live comfortably in retirement, considering your desired lifestyle, health, and longevity? You can use online tools or consult a financial planner to help you estimate your retirement income gap and how much you need to save to close it.

2 Choose the right retirement plan

As a self-employed person, you have numerous options for saving for retirement in a tax-advantaged way. A SEP IRA enables contributions of up to 25% of net self-employment income or $58,000 in 2021, whichever is less. Alternatively, a Solo 401(k) allows employee contributions of up to $19,500 plus up to 25% of net self-employment income as an employer, totaling $58,000. Additionally, a SIMPLE IRA allows employee contributions of up to $13,500 plus either a 2% fixed or 3% matching contribution as an employer. Finally, a Roth IRA permits contributions of up to $6,000 ($7,000 if 50 or older) with after-tax dollars and offers tax-free growth and withdrawals in retirement. Each plan has its own rules, benefits, and limitations; therefore it is important to compare them and select the one that best suits your situation and goals. You can also combine different plans or switch between them as your business develops.

3 Diversify your income streams

Boosting retirement savings and reducing risk can be done by diversifying income streams. As a sustainable design expert, you can leverage your skills and knowledge to create passive or semi-passive income sources, such as writing a book or blog on sustainable design topics and selling them online, creating digital products like templates, guides, or software and offering them as downloads or subscriptions, licensing designs or patents to other companies or organizations and earning royalties or fees, or consulting or coaching other sustainable design professionals or businesses and charging for your advice or services. These income streams can help you generate extra cash flow, build your brand, and expand your network while also giving you more flexibility and control over your time and work.

4 Plan for the unexpected

As a self-employed person, you also need to plan for the unexpected events that can derail your retirement plans, such as illness, injury, disability, or legal issues. You should have an emergency fund that covers at least six months of your essential expenses, as well as adequate insurance coverage that protects your health, income, and assets. You should also have a contingency plan that outlines how you will handle potential scenarios, such as losing a major client, facing a lawsuit, or having to exit your business. You should also review and update your estate plan, including your will, trust, power of attorney, and beneficiary designations, to ensure that your wishes are respected and your loved ones are taken care of.

5 Enjoy your retirement

Finally, you should enjoy your retirement as a reward for your hard work and dedication to sustainable design. You can use your time, money, and skills to pursue your hobbies, passions, and causes, or to explore new opportunities and challenges. You can also stay connected and engaged with your peers, clients, and community, or mentor the next generation of sustainable designers. You can also continue to work on your own terms, if you want to, as long as it brings you satisfaction and fulfillment. The key is to find the balance that works for you and allows you to live your retirement dreams.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?