How To Create Your Self-Employed Benefits Package
If you are self-employed or work for an independent person, you may already be familiar with the pros and cons of self-employment. When it comes to the advantages of being self-employed, you get unlimited vacation, a lot of extra hours with your family, tax deductions, and the ability to work from any location. These are some of the pros of being your own boss. On the other hand, the biggest con of self-employment is “no benefits in addition to your actual earning.” This pertains to the benefit packages that most employers offer to their full-time employees. This article explains how you can create your self-employed benefits package.
1. Term Life Insurance
A life insurance policy will give you and your loved one’s peace of mind even after an unexpected tragedy; they can live their life debt-free. Many employers offer life insurance coverage, but when you leave that job, you lose the benefits. And when you are self-employed, it is essential to buy a low-cost term life policy to ensure that your family is taken care of after your death.
2. Disability Insurance
Disability insurance coverage is another benefit package that employers generally provide to their employees. Most of the time, self-employed people overlook this, but you should not forget to consider this insurance coverage.
Disability insurance coverage is essential because it protects you and your family from financial problems that might cause you an inability to work due to illness or injury. So, shop for disability insurance that meets your needs and fits your budget.
3. Health Insurance
Health insurance coverage is one of the essential self-employed coverages that you should not ignore even if you are young and healthy. You never know when you’ll get injured or sick, or you might be required to pay extra money for a routine checkup. If you haven’t bought health insurance yet, you should start looking for the best budget-friendly health insurance plans. Remember that while you go shopping for a health coverage plan, consider one with dental and vision insurance. Furthermore, find a high-deductible insurance plan with a Health Savings Account to reduce your premium cost.
4. Retirement Savings
Contributing to a retirement savings account is an essential benefit that you should consider if you’re self-employed. Here are some of the tax-advantaged retirement accounts where you can add to your savings for the future
Individual Retirement Accounts (IRAs): In this account, you can hold investment of assets like precious metals and real estate with tax advantages.
SEP-IRAs: If you are a business owner, this is what you need. This is also a type of IRA where you can save money to help your employees and your retirement.
Solo 401ks: With this account, you can get benefits within the limit of a 401k. You can contribute to a 401k and have access to that contribution after retirement.
Plan a Budget-Friendly Vacation
Self-employment doesn’t mean you have to work for 365 days without deserving time off. Plan a budget-friendly vacation. Set aside money for trips or family vacations and spend only that money when you are on a trip or vacation so that you will not hurt your overall financial budget.
